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Trading Lessons

WMD - Weapons of Mass Destruction

Stock-Markets / Financial Crisis 2016 Feb 09, 2016 - 05:13 PM GMT

By: DeviantInvestor

Stock-Markets

“WMD” also is “Wasteful Monetary Devastation.”

WASTEFUL:  We all know that governments spend money in wasteful ways and compensate with higher taxes, deficits, huge debt, “printed currencies” and inflation.  “Bridges to nowhere,” various wars, and “giveaways” benefit a few at the expense of many.

MONETARY:  Printing and digitally creating many trillions of dollars, euros, yen, or pounds may temporarily bail out banks and governments but in the big picture they destroy capital and weaken the economies of the nations which are deluding themselves.


DEVASTATION:  Overwhelm governments, corporations, and individuals with debt, cut interest rates, devastate pension returns, punish savers, trash economies, blow more unsustainable bubbles, drink another bottle of delusion, and announce, “mission accomplished.”

From John Rubino regarding negative interest rates in Europe and now Japan:

“This is a resounding admission of failure.  Over the past seven years the world’s central banks have cut interest rates to levels not seen since the Great Depression and flooded their banking systems with newly-created currency, while national governments have borrowed unprecedented sums (in the US case doubling the federal debt).  Yet here we are in the early stages of a global deflationary collapse.  Commodity prices have followed interest rates to historic lows, while growth is anemic and may soon be nonexistent.”

Flooding banking systems with newly created currencies and massively increasing debt are wasteful uses of monetary resources.  The consequences of such nonsense are devastated global economies – as they fall deeper into a global deflationary collapse.

Commodity indexes are at 40 year lows, the Baltic Dry Index is at an all-time low, and over $5 Trillion in government debt yields “negative interest” (crazy) and debt is spiraling out of control – global debt exceeds $200 Trillion (even crazier).

The above craziness suggests a massive failure by central banks and western governments, not global economic health.

I repeat:  WMD also indicates Wasteful Monetary Devastation.

Do you trust?

  • Bonds issued by insolvent governments which can only repay their debts by issuing new and ever larger debt instruments.
  • Politicians who promise to spend more as they increase already unpayable debt.
  • Bankers who profit personally at the expense of individuals, pension plans, insurance companies, and savers.
  • Paper currencies backed by the full faith and credit of sovereign governments which are rapidly destroying both the faith of their citizens and their credit ratings.  By the way, unbacked paper money always fails.

Or

Gold and silver which have no counter-party risk, no risk of default (physical metal, not the paper stuff), and a very long history as a store of value.

WMD – Wasteful Monetary Devastation will destroy unbacked paper currencies, the global bond market, and economies dependent upon financial engineering and paper pushing.

The Derivative Bubble – AKA the Weapons of Mass Financial Destruction – will make the coming global deflationary collapse, and the central bank “money printing” reaction, even more devastating.

Gary Christenson

GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail

© 2016 Copyright Deviant Investor - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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