Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ransomware Attack, Debt - You’d Think We’d Be A Little More Worried…

Interest-Rates / Global Debt Crisis 2017 May 16, 2017 - 05:55 AM GMT

By: John_Rubino

Interest-Rates

By now everyone with an Internet connection is aware of the “ransomware” attack that shut down hundreds of thousands of computers over the weekend.

The fact that the onslaught is just beginning — as the military-grade hacking tools developed by the NSA and recently leaked are weaponized by hackers and released into the wild — should, you’d think, be worrisome.


Most people are probably also aware that North Korea, which claims to have nuclear weapons, just tested a missile capable of carrying a payload to the capital cities of its neighbors. See Putin says world shouldn’t threaten North Korea, after latest missile landed near Russia.

And yet here we are on Monday morning with global stock markets hitting new highs, as if the world is a stable, well-managed, nearly risk-free place. It’s easy to understand cybersecurity and defense stocks doing well today. But banks and home builders? Seems like their world is anything but benign.

So what’s happening? The same thing that’s been happening for many years. The world’s governments are reacting to uncertainty with massive infusions of newly-created currency. Below, for instance, is the European Central Bank’s balance sheet – a proxy for how many new euros it has created and dumped into the economy. Note that the line went parabolic in 2014 and shows no sign of flattening. Fully one trillion new euros hit the market in 2016 and have to go somewhere. For the 1%, it’s apparently easy to relax and buy Apple and Google when that much cash keeps flowing in.

And Europe is frugal compared to China, where total credit growth (public and private combined) is on track to approach $3.5 trillion this year. That would be a record year for even the US. For a developing country like China it’s ridiculous.

Speaking of the US, here’s Credit Bubble Bulletin’s Doug Noland on what we’re up to:

I expect U.S. system Credit growth to surpass $2.2 TN this year, roughly broken down by the government sector ($850bn), Business ($750bn), Household Mortgage ($350bn) and Consumer Credit ($250bn). Another big federal deficit is expected, with the perception of a blank checkbook ensuring that deficits inflate until the markets decide otherwise. Rising home prices coupled with low mortgage rates ensure a 2017 expansion of mortgage borrowings. Loose financial conditions and record debt issuance would seem to ensure another big year of Business debt growth. And while there appears to be some tightening in subprime auto and Credit cards, I would be surprised to see Consumer Credit expand by much less than 2016. As such, the relatively stable outlook for U.S. Credit growth certainly supports the global liquidity and market backdrop.

None of this is surprising. The tens of trillions of dollars borrowed in the recent past were largely misspent, so to prevent a crisis of epic proportions, ever-greater amounts of credit have to be created and disseminated. Inflate or die, as the saying goes.

To call this a classic Ponzi scheme is by now too obvious to be worth explaining. No society has ever created this much debt, and seen so much of it become non-performing. Which is the same thing as saying no society has ever set itself up for such a sudden, dramatic change in sentiment when something big finally goes wrong.

By John Rubino

dollarcollapse.com

Copyright 2017 © John Rubino - 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.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in