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CHART: Why This Time It IS Different

CHART: Why This Time It IS Different

See how violently interest rates are exploding upwards

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Dreamstime

WARNING: The Markets Are Suddenly Looking Very Sick

Why this may be the long-awaited turning point downwards
Friday, October 5, 2018, 12:59 PM

As you probably know, our model here for tracking and staying ahead of the next financial crisis is to watch for trouble to move from “the outside in.”  This means that the weaker elements in the system always fail first.

Therefore, we prioritize watching junk debt more than investment grade debt, investment grade debt more then US Treasurys (the supposedly safest bonds in the world).  We watch Italy closer than Germany, and Turkey closer than Italy.

The weakest elements always go first.

And when the central bank created credit-liquidity cycles come to an end, this is especially true.

And when the weakest players topple, the contagion up the quality chain usually starts happening fast.

Very fast.

This is why we've long been advising a prudent and careful strategy of money management over these past several years, as painful as that’s been while the party has been raging higher. 

And while we’re not anxious to be vindicated (because there will be a lot of misery in the world when these credit bubbles finally burst), we’re confident that we will be.

Has that time begun? Is it finally time to call it, and pronounce this long-lived credit cycle dead?

Well... we’ve thought so before and been wrong, so let us be the first to temper our remarks here. If the extraordinary efforts of the central authorities have taught us anything over the years, it’s to be cautious and humble when it comes to marking “market calls.”

Since we don’t have a crystal ball, let's share the data that’s been accumulating on our desktop these past few months that has us thinking that the long-awaited market correction may have indeed arrived this week. This evidence suggests that the crumbling decay in the markets has just recently passed several critical marks, and that a major breakdown to the downside may be unfolding before our eyes.

And while we’ve not (yet) ready to issue an official “Alert” to all of our readers, this is for sure a serious warning.

Let's start by looking at these critical charts... » Read more

Blog

Dreamstime

Bad Money

Our debt-based fiat money system poses an existential threat
Friday, September 14, 2018, 6:51 PM

We’re all going to have to be a lot more resilient in the future.  The long emergency, as Jim Kunstler put it, is now upon us.  It comes from every direction, and the trick is going to be remaining alert, oriented and positive.

If ever there was a wake-up call from the natural world it was this year’s weather events combined with the storms from last year.  » Read more

Insider

MR.LIGHTMAN1975/Shutterstock

Off The Cuff: Why The Market Has To Crash

Too much bad debt
Monday, September 3, 2018, 2:25 PM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • Tax-Cut Sugar-High
    • Corporate earning shoot the moon, but wages are little changed
  • Emerging Markets Deja-Vu
    • Crisis always follows borrowing too much debt from foreign creditors
  • Our Captive Political System
    • The democratic dream has long been suffocated by those who control DC
  • A Gold Suprise?
    • Historical precendent strong suggests gold will rebound sharply soon

As the markets hang at record highs (yet again), Chris and Mish revisit the data -- are these levels justified by the data?

A fresh look makes it very hard to defend them. And while there are lots of reasons to support that conclusion, the core one is the same as it was prior to the 2008 crash: Too Much Bad Debt.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content. » Read more

Insider

Shutterstock

Off The Cuff: The Real Emerging Market Danger Lies In Asia

The debt bubbles there can gut-punch the world economy
Wednesday, August 22, 2018, 11:38 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Commodity Carnage
    • Not just due to a strong dollar
  • Argentina Is Faltering
    • Its currency is collapsing (yet again)
  • More Trouble In Turkey
    • Threatening the EU banks who loaned it billions
  • The Real Threat
    • Asia is where the real damage will occur

Recorded last week, Wolf Ricther explains why the real Emerging Market contagion risk lies not in Turkey, or Venezuela or Argentina or Brasil -- but in Asia.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content. » Read more

Blog

Satansgoalie

America The Insolvent

A reckoning is due. One the elites are already readying for.
Friday, July 20, 2018, 12:37 PM

We don’t have much time left to get prepared.

Yes, it’s rare for things to suddenly fall apart overnight -- so if you're playing the odds, we probably have a few years left before the status quo as we know it begins to break down. Maybe until 2020; possibly to 2023. But not much longer after that.

The trends are just too severe. And they're building up steam. » Read more

Blog

A Hard Rain's a-Gonna Fall

The prospects for the rest of the year are awful
Friday, June 15, 2018, 6:55 PM

As the Federal Reserve kicked off its second round of quantitative easing in aftermath of the Great Financial Crisis, hedge fund manager David Tepper predicted that nearly all assets would rise tremendously in response. 

History proved Tepper right: financial and other risk assets have shot the moon. Equities have long since rocketed past their pre-crisis highs, bonds continued rising as interest rates stayed at historic lows, and many real estate markets are now back in bubble territory. 

And everyone learned to love the 'Fed put' and stop worrying.

But as King Louis XV and Bob Dylan both warned us, what's coming next will change everything. » Read more

Insider

Wikimedia

Off The Cuff: Why Governments Prefer A Currency Crisis To A Debt Crisis

Nothing's as destructive as cascasding debt defaults
Friday, June 1, 2018, 6:09 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Panic in Europe
    • Italy is threatening to destabilize the EU
  • Central Banks Have Wrecked The Market Mechanisms
    • And tapering will reveal the damage done
  • What's Better? A Debt Crisis Or A Currency Crisis?
    • It seems governments vastly prefer the latter
  • Is Deutche Bank Threatening To Start A Banking Crisis?
    • Maybe. And it would set the world aflame.

With the action happening in Europe this week, from the Italian debt panic, to the new Spain PM, to Deustche Bank's worsening prospects, Wolf Richter comes on the program to make sense of the developments in real-time.

Notably, Wolf explains why the world's central banks will work with their home governments to destroy their currencies rather than start defaulting on their debts. This is path he expects the future to take:

A debt crisis is devastating, and it's devastating selectively. A currency crisis is kind of more democratic. It hits everybody. But a debt crisis, it hits the people that are recipients of government aid the most. And that's the problem in Greece and other countries, they had to go on austerity. Little bitty pensions were cut and things like that happened to save a few pennies here and there. And when it's a currency crisis, everybody gets hit and it spreads across. And I think they understand that Japan is uniquely equipped to deal with a currency crisis because it has this large trade surplus and because it sits on a pile of foreign exchange reserves. So that won't really blow up the Japanese economy where as a debt crisis would completely implode the economy, and it would wreak havoc among the people from pensioners and aid recipients and the healthcare system and everything would just collapse. And they decided that's not going to happen.

So that's how I think we need to look at what's happening in Japan. They made a decision to prevent a debt crisis. and if they get a currency crisis, fine, they'll manage that. Italy doesn't have that option. Italy doesn't have its own currency, and it can't do that, so it can get a debt crisis. And that's what happened to Greece, and that's what happened to other countries. When they get a debt crisis it's really nasty. I hope Italy can avoid this thing, but debt crises are just the worst, absolutely the worst. But if a government needs to do anything, it's avoid a debt crisis.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Blog

kienyke.com

Time To Choose

Will you be an agent of depletion or regeneration?
Friday, May 11, 2018, 10:13 PM

There’s a vast revolution underway. And it’s time to pick sides.

Your choice couldn't be more critically important. Quite possibly, the entire fate of the human species hangs in the balance.

It's time to decide: Will you be an agent of depletion or regeneration? » Read more

Podcast

Nomi Prins: Collusion!

How central bankers rigged the world
Tuesday, May 8, 2018, 4:19 PM

Nomi Prins, Wall Street veteran turned financial industry reformist returns to the podcast this week to explain the findings within her new book Collusion: How Central Bankers Rigged The World.

Nomi has put together a timeline of exactly when and how the central banks have plundered the wealth of the masses since 2008, either directly or indirectly through the loss of purchasing power of the currencies they control. » Read more