Sheldon Filger-blogger for GlobalEconomicCrisis.com

An unprecedented wave of policy measures has enabled distortions that  are wreaking havoc in the global economy, creating accelerating dangers of a cataclysmic event. This can be in the form of a market crash, contagion from imploding asset bubbles or rise in fears of inflation leading to irrational money flows. A combination of all these forces in synchronicity can be the single event leading to a global depression.

The major factor in the global economy at present is the unprecedented wave of liquidity being unleashed by policy makers. That fact alone is what has driven the sharp rise in equity prices since the initial collapse in the wake of Covid-induced economic shutdowns. There is no other explanation for the massive rise in equity prices, even while the real economy is stagnant after a sharp decline  in the wake of the coronavirus pandemic. The divide between Main Street and Wall Street alongside the sharp rise in equities has never been wider. It is only due to the money printing of central banks and record levels of public debt caused by the fiscal policies of sovereigns that has brought about this phenomenon.

Alongside the sharp rise in equity prices has been the explosive price rise in Bitcoin. The emergence of crypto or digital currencies in general, and Bitcoin in particular, has brought about the most expansive speculative bubble in the modern financial era. Bitcoin is completely opaque; nobody even knows the true identity of the person who created this cyber currency. Yet, even Tesla among other companies has begun to invest substantially in this digital currency as a means of mitigating risk factors.

Meanwhile, bond yields have begun to rise, an indication of growing fears of inflation. That, and the continuing deluge of liquidity from the policymakers, has created perhaps the most distorted and unstable financial environments since the  period that preceded the Great Depression of the 1930s.

Sheldon Filger-blogger for GlobalEconomicCrisis.com

When Covid-19 first impacted major economies last Spring, stock markets throughout the world plunged  by double-digits in a period of only 3-weeks. Yet, not only have these losses all been recouped; less than a year later equities have reached record levels, led by the Dow Jones index. In addition, other speculative investments such as the cyber currency Bitcoin have soared to dizzying highs. Yet, amid this financial exuberance veteran investors are displaying growing concern for the future. The  Financial Times has characterized their concern as seeing  “a bubble to rival anything  seen in the past century.”

Simply put , there is a disconnect between the equity markets and  the real economy, which is in dire straits in virtually every country. The sole reason for the escalation in equity prices is the unprecedented money printing by central banks, combined with equally unparalleled deficit spending by sovereigns. It is only this monetary and financial sugar high which is driving soaring equity prices.

When the first hint occurs that the pump-priming may be receding, however, the investors will run for the exists. What is likely to occur is a global stock market crash of calamitous proportions which, like the 1929   crash on Wall Street, will usher in a period of deep economic depression.

The Dow Jones Industrial Index was the one shining light in President Donald Trump’s unconventional administration. No matter how perplexing his tweets were, there was no denying that Wall Street investors loved his pro-business posture. That is until now.

The massacre that occurred on Wall Street on Black Monday, February 5, 2018 was the largest one -day loss on  the New York Stock exchange. This comes after a bad week on Wall Street, meaning all of the gains trumpeted by Trump have been erased. Of course, there will be pundits claiming that this is just a temporary correction. But is it?

After a decade of money printing and near zero interest rates undertaken by central banks around the world, but especially by America’s Federal Reserve, inflation  fears are returning with a vengeance

It must be recalled that a major reason the world supposedly escaped a massive economic depression following the global economic crisis of 2008 has been  money printing by central banks and massive borrowing by sovereigns. This borrowing binge continues to the present day.  Up till now, zero interest rates have enabled major sovereign borrowers, especially the United States, to service its growing government debt. However, should interest rates return to anything approaching normal historical levels, then many countries, the USA being in the lead, face the prospect of a massive insolvency crisis. Fear of this approaching fiscal Armageddon may be what is animating the growing  fear among Wall Street investors.

Black Monday may very well be  a sign of much worse to come.

Wall Street has incurred 2-days of brutal losses. Friday’s drop of more than 530 points follows Thursdays’ decline by more than 300 points on the Dow Jones index. The NYSE collapse parallels that of major bourses across the world.

The sudden crash in stock prices will undoubtedly send the various plunge protection teams of the world’s major central banks into action, seeking to reverse the sharp losses. In spite of what the central bankers do, they cannot much longer hide the fact that the world barely recovered from the global economic crisis that emerged in 2008, and the likelihood of a return to the Great Recession has grown exponentially, with the accumulation of bad economic news, especially from China.

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In a plea deal with the U.S. Justice Department, five of the largest mega banks have agreed to plead guilty to currency manipulation and rigging interest rates. These are serious crimes of a felony nature, however, not a single banking executive will see the inside of a prison. In a continuation of Obama administration policy, large fines that may impress the public are imposed, though it must be stated that the financial penalties are a fraction of the profits those banks received through their interest rate and currency manipulations, let alone public bailouts and Federal Reserve injections of liquidity at near zero interest rates. Meanwhile, no bankers face individual criminal indictments.

The five banks are: Citicorp, JPMorgan Chase, Barclays, The Royal Bank of Scotland and UBS AG.

Democratic Senator Elizabeth Warren, who has become the terror of Wall Street, had this to say about the plea deal agreed to by the Department of Justice: “It’s business as usual, and it stinks. The big banks have been caught red-handed conspiring to manipulate financial markets, and several have even admitted in court that they’re felons, but not a single trader is being held individually accountable, and regulators are stumbling over themselves to exempt the banks from the legally required consequences of their criminal behavior. That’s not accountability for Wall Street.”

Hillary Clinton is running for President of the United States  in 2016. See the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude

In the past few days the equity markets, in particular the Dow Jones index, have displayed wild gyrations. One day stocks fall sharply, followed by a near equal climb the following day, only to shortly afterwards swing down sharply again. The sentiment-driven swings on the world’s bourses display extreme nervousness  by investors. Increasingly, they are beginning to catch on that the “recovery” was no secular recovery following the  global economic and financial crisis of 2008, but a short-lived stabilization. Now, reality is catching up fast.

For the past few months, there have been indications of stagnation in the world’s fourth largest economy, Germany, which has been the sole force holding together the debt-ridden Eurozone. Now comes the August figures on German exports: a decline of 5.8 percent (http://www.dw.de/german-exports-take-a-deep-dive-in-august/a-17983575), the worst contraction in Germany’s critical export sector since January of 2009, at the worst point of the global economic crisis.

The German export contraction is merely a hint of what is happening globally. Trade growth is slowing, inhibiting the ability of sovereigns to finance their massive structural deficits and cope with record high levels of unemployment. The geopolitical situation is very bad and getting worse, pointing to further erosion in economic confidence. It may be that the global economy is only one major crisis away from another catastrophe, as in 2008. And the sources of that next crisis are everywhere around us: the Islamic State war in the heart of the Middle East; looming tension with Iran over the nuclear issue; border tensions between India and Pakistan;  a territorial dispute in the Far East that pits China against Japan and Vietnam. Then there is the Ukraine crisis, pitting Russia against most of Europe and the United States. On top of the geopolitical flashpoints, there is now the emerging global health crisis involving the Ebola virus. Any one of these flash points can trigger a “Black Swan” event that could plunge all major economies into a severe recession.

While all those negative indicators envelope our world, central banks across the globe are giving increasing signs that sooner rather than later the policy of essentially zero-interest rates will have to be reversed, as the distorting effects  of artificially low rates cannot be maintained in perpetuity. Yet, it has been largely those low rates, in combination with the unleashing of a flood of liquidity, that are largely responsible for the limited economic growth that has occurred since 2008, along with the recovery of the world’s stock markets from their worst losses  incurred during the onset of the crisis.

The mood swings on Wall Street and elsewhere appear to be the tracing of a fiscal and economic electrocardiograph, delineating that not all is well with the global economy, and the warning signals are flashing red. Underlying and reinforcing those fears is the knowledge within the financial community that sovereigns expended so much of their capital in coping with the last worldwide economic crisis, there is little left for policymakers to react with when the next big financial and economic tsunami  strikes the global economy.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude

The Dysfunctional  American political establishment, already presiding over a very real fiscal crisis due to an economy totally dependent on structural mega-deficits, has most recently added a self-created fiscal crisis, with one third of all federal government workers laid off due to a government shutdown, and debt default for the U.S. Treasury rapidly approaching. At almost the last possible moment, it appears that Congress will approve a Senate-led compromise, which would allow the American government to, in effect, reopen for business, alongside an extension of the debt ceiling, currently set to reach the maximum allowable figure at present on October 17.

According to details thus far being reported, it appears that the deal likely to be approved by the U.S. Congress will allow the government to reopen through February 7, 2014 and debt default avoided  for now by extending the borrowing limit, currently set at $16.7 trillion limit, through January 17, 2014. In other words, nothing is really resolved; all that is agreed on is to kick the proverbial can down the road for a few more weeks, when the next politically-manufactured fiscal crisis will occur. Wall Street, however, only thinks of the short-term, which is why the Dow Jones is soaring once more at this example of legislative  “craftsmanship” by America’s inept politicians.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

YouTube

Hillary Clinton Nude

Hillary Clinton Nude

YouTube

HILLARY CLINTON NUDE

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

The recent conclave of the Fed’s FOMC (Federal Open Market Committee)  that met and rendered a decision  has sent the Dow Jones index soaring to record levels. The Fed, under the chairmanship of Ben Bernanke, is continuing its asset buying program, calibrated at $85 billion per month, as a monetary stimulus to goose and prop up the American economy, still on life support five years after the implosion of Lehman Brothers, previous claims of “green shoots” and economic recovery notwithstanding.

Wall Street is obviously delighted. The claim that the expansion of the Fed’s balance sheet by $2.5 trillion since 2008 is not inflationary is untrue. Inflation there has been, but it is primarily confined to the equity markets, where a new asset bubble is being cultivated by Ben Bernanke and company, to the pleasure of Wall Street, which scored big through the FOMC decision on maintaining the $85 billion per month asset buying program.

The FOMC’s vote was almost unanimous in favor of continuing the money printing frenzy at the Fed-but not quite. There was one lone dissenter who voted against the continuation of the asset buying program; Esther L. George, President of the Kansas City Federal Reserve Bank.  According to the Fed’s official release, “Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”

It would appear that Ms. George is the sole rational member of the FOMC, with the ability to look beyond the horizon and recognize that the massive economic and financial imbalances being created by the Fed spell catastrophe in the future. Could that be the authentic reason why Larry Summers withdrew his name from consideration as the replacement for soon-to-retire Fed Chairman Bernanke?

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

YouTube

Hillary Clinton Nude

Hillary Clinton Nude

YouTube

HILLARY CLINTON NUDE

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Streetgo in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

To view the YouTube music video for “Wall Street Kills,” click image below: