Here come "Da Pain" ?

[Mega]

http://www.fuw.ch/article/james-bian...-game-changer/

[jk]

Re: Here come "Da Pain" ?

bianco predicts inflation but i couldn't find where he explained why.

[Mega]

Re: Here come "Da Pain" ?

From a "Friend"

> BTW Smart people are now screaming INFLATION very soon..........your
> thoughts?

Mega - hell YES, in the biggest font size you can imagine.

Mega, the reason we have Zero Interest rates (or actually negative
interest rates) is because the US government (and hence Every Other
Government) can buy bonds at an absurdly low Interest rate on those
bonds.

The US government's Ten Year Bond issuance costs US$97 per bond and
the Interest Rates have gone from under 1% to around 2.5% since June
of 2016. Mega, The US Federal Reserve has to pass that interest rate
rise on eventually. The thing that you and I both know that will
trigger inflation soon is the Interest Rates going up.

The US Federal Reserve has to pass that Interest Rate Rise on the
Commercial Banks in the US (and hence the Rest Of The World, since
most country's banks borrow heaps of money from the US, as you know).

When Interest Rates rise, prices have to rise because shopkeepers (or
rather the mega corporations that own supermarkets or hypermarkets)
see their own costs of borrowing go up and they have to fund that.

I'm surprised you do not know this.

The March 15th deadline for that Funding Deal that Obama and John
Beohner signed in 2015 means that the US government cannot purchase
bonds on the bond market, nor borrow any more money that US$20
trillion (Barack Obama actually took overall borrowings to slightly
over US$21 trillion) and cannot collect taxes. It also means that they
cannot continue to buy US government bonds, because they won;t have
the spare cash to do that.

Which means bond prices fall. Right now, the US ten year Treasury bond
is about US$97 per bond. This is massively over-valued.

It is massively over-valued because Obamacare (the Affordable Care
Act) is buying heaps of bonds (US ten year Treasury bonds,
especially). It is taking funds (heaps of it - about US$60 billion a
month) from the US Social Security Fund, which tax-payers built up
over generations and is now being looted.

When that Funding Bill ends on March 15th, the purchases of US
government bonds by the US Government will cease.

Hence the price of the US government bonds will drop, causing the
entire bond market to fall. But worse than that, the US Treasury Bond
Interest rate will rise, well above 3%.

When that Interest rate rises, the US Federal Reserve has to pass it
on to the banking system, and thus they have to raise interest rates
further. This means that the US banking system will pass on those
Interest Rate Rises to Everyone Else on the planet because the Rest Of
The World borrows so much money from the US banking system.

That means every shop, commercial outlet, sales point or even Internet
Seller has to raise their prices to pay for their own borrowings, and
thus the Interest Rate Cycle looks increasingly the means whereby the
much-delayed Inflation Spike will be set off.

Of course, you can expect the Interest Rate Pain to produce Personal
Bankruptcies is a flood, and commercial bankruptcies shortly
afterwards, which will - in turn - produce bank bankruptcies like
never before.

And the Interest Rate Derivative Debt Defaults on Wall St - worth
US$400 trillion last time I checked - are triggered when the US ten
year Treasury Bond Interest Rate reaches above 3.25%.

That means, as you well know, the Wall St Banks have to pay out US$400
trillion to whoever their counter-parties are.

MEGA, THEY DO NOT HAVE US$400 TRILLION to pay to anyone.

But it gets even worse. The Funny Money that Barack Obama gave to Wall
St (US$9.9 trillion + the money the Federal Reserve printed... at
least US$4.5 trillion) which flooded across to China, because Chinese
Interest Rates were well above US interest rates... that money will
now come flooding back.

This will massively push up US inflation all on it's own.

Think of this: the US economy is said to be worth about US$15
trillion. It probably is worth a lot less, but officially it's worth
US$15 trillion. The amount of money in circulation in the US is
allegedly about US$3.3 trillion:

http://www.tradingeconomics.com/unit...oney-supply-m1

The shadow banking system is probably well above that.

But if all that US$9.9 trillion that Barack Obama gave to Wall St and
then they moved to China ... plus the US$4.5 trillion the US Federal
Reserve printed for a Grand Total of US$14.4 trillion, say US$15
trillion comes flooding back, they have US$3.3 trillion (M1 money) +
US$15 trillion looking for something to buy.

Well, that is a grand total of (say) US$18 trillion. If you compare
that to the present figure for inflation (2.5%) and then add US$18
trillion to the mix, you get a minimum inflation over a year of 13.6%.

Digging much deeper, the ratio between US$3.3 trillion and the US$18
trillion about to be unleashed upon the US economy is about 545.45% -
which is what I actually expect the US inflation rate to spike to.

Yes, 545.45% inflation in the US, or thereabout that figure.

That's the minimum, spread over most asset classes, but with some
asset classes deflating, the maximum value for (say) food inflation in
the US will be much higher. Worse yet is what happens to imports into
the US, because when this stuff starts, the US dollar will drop like a
stone.

Remember: the US imports huge amounts of Oil from Canada (that
pipeline that the protesters are all against comes from Canada), from
Saudi Arabia and from Mexico. When the US dollar starts to Tank It,
the cost of importing both crude oil and Refined Product will
skyrocket.

That means that fuel price inflation will not be 13.6%, but rather
more like the 545% mentioned above. This means that US fuel prices
(say, gasoline) will double every 2 1/2 months.

Gasoline (petrol to you and me) is about US$2.30 per US gallon right
now, so that price will double every 2 1/2 months:
$5.75 after 2/12 months
$14.37 after 5 months
$35.94 after 7.5 months
$69.00 after 10 months
$160.90 per US gallon for gasoline after 12.5 months.

Needless to say, there will not be a US economy at that fuel price.
Also, those price-rises will go up quick, but also come down quick.
But the vast (economic and financial) damage will have been done. The
world really will dump the US dollar as a way to avoid the massive
inflation the US will be feeding through to every country on the
planet, adding vastly to America's woes.

All thanks to Barack Obama, John Boenher, George Dubbya, Bill Clinton,
George H Bush (the First George Bush), the Neo Cons under Reagan,
Jimmy Carter, Gerald Ford and Richard Nixon.

[Mega]

Re: Here come "Da Pain" ?

[Mega]

Re: Here come "Da Pain" ?

My best guess would be they have to go to the IMF & get SDR's...............then the IMF sez "Ok, here some SDR's we will take 50% 0f your debt onto our balance sheet............but you BASTARDS will now have to pay intrest abig time"................then "Da pain" comes.

[Mega]

Re: Here come "Da Pain" ?

[Techdread]

Re: Here come "Da Pain" ?

Are you saying Trump will not be able to get the debt ceiling raised again?

https://en.wikipedia.org/wiki/Histor...s_debt_ceiling

[Mega]

Re: Here come "Da Pain" ?

He IS

[jk]

Re: Here come "Da Pain" ?

the treasury isn't purchasing bonds. the "u.s. gov't" isn't purchasing bonds. the federal reserve - an "independent" agency- is maintaining its bond inventories and if it so wishes can expand its balance sheet further.

and i still haven't seen an explanation of what is going to trigger the [official and market-acknowledged] inflation that bianco predicts.

people have been predicting the return of inflation for many years. eventually they will be right. IF trump passes big spending bills and doesn't pay for them, then we could see inflation. but even if he succeeds in doing that, no simple matter, it will take years for the spending to occur.

[Southernguy]

Re: Here come "Da Pain" ?

Yes Sir. And I understand Congress can rise the debt ceiling at it's will.

[Southernguy]

Re: Here come "Da Pain" ?

8th. anniversary today of the current bull market.
Time to short?

[jr429]

Re: Here come "Da Pain" ?

When that Interest rate rises, the US Federal Reserve has to pass it
on to the banking system, and thus they have to raise interest rates
further. This means that the US banking system will pass on those
Interest Rate Rises to Everyone Else on the planet because the Rest Of
The World borrows so much money from the US banking system.

That means every shop, commercial outlet, sales point or even Internet
Seller has to raise their prices to pay for their own borrowings, and
thus the Interest Rate Cycle looks increasingly the means whereby the
much-delayed Inflation Spike will be set off.

The opposite side and the other view of this is that when the cost of borrowing goes up consumers consume less - thus resulting in asset prices deflating. This is already occurring in the used (and starting with new) car market and potentially housing as borrowing costs rise.