Commodity Trade Mantra

Posts Tagged ‘Asset Bubbles’

Asset Bubbles Created by Central Banks Setup a Perfect Storm for Gold

Unless central banks are willing to initiate ultimate protocols, the inevitable result will be a bursting of all these asset bubbles and an explosion for gold that will make its $1940 high in 2011 look like pocket change. Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven.

Doubling Down on Inflation

The benefits of inflation are supposed to be compounded by rising stock & real estate prices, creating a wealth effect for the owners of those assets which subsequently trickles down to the rest of the economy. In other words, seed the economy with money & inflation & watch it grow. But why has growth yet been a no show?

We're Relying on Phantom Wealth to Fund Our Retirement

That Social Security, Medicare & pension funds invested in stocks & bonds can fund the retirement of 65 million people is a misleading fantasy. Phantom wealth cannot possibly fund unprecedented retirement & healthcare promises. Only real wealth can do that; central bank liquidity & asset bubbles it inflates are not real wealth.

We Must End this Addiction to Debt as the Engine of Growth

Growth is back – after a fashion – but debt levels are rising again, productivity growth in advanced economies is close to post- war lows, capital spending is becalmed, inroads into deep fiscal and current account deficits are proceeding only at glacial pace. Is this a sustainable economic model?

What are Negative Interest Rates and how do they work?

The ECB has cut its headline interest rate to a new record low of 0.15%, and also imposed negative interest rates of -0.1% on Eurozone banks with the hope that this will encourage the banks to stop hoarding money, and instead lend more to each other, to consumers, and to businesses, in turn boosting the broader economy.

Still Think the Fed Isn't Fueling Inflation? Check Out This Chart

One camp reckons the reason why inflation is muted is that the Fed largesse has flowed into asset bubbles rather than goods and services, and proponents of this view make a good point: since little of the Fed largesse has trickled down to the to bottom 99.5%, it can’t exerting much pressure on consumer prices.

Why Gold and Silver Could Outperform Every Other Asset Class in 2014

What will set off an explosive rally in gold and silver remains to be seen but there are plenty of potential triggers including war in the Ukraine or South Korea, as well as the significant financial risk of collapsing asset bubbles engineered by the extremely loose monetary policies of the world’s central banks.

The New Fed Chair - Janet Yellen's Impossible Task

Janet Yellen is supposed to accomplish what simply cannot be done, namely ‘unmake’ the mistakes she and her predecessor have jointly committed (let us not forget, she was vice chair and never once dissented with the decision to implement an extremely loose policy).

Will The Fed's Massive Money Creation End In Inflation Or Depression?

The Fed’s massive money creation could go either way, which is potentially confusing. Till it stokes demand, it could lead to inflation. If it increases an already heavy debt burden, it could lead to recession, joblessness, and depression. Or it could lead first to the one and then to the other.

Wishing For Inflation? The Last Gasp Before Hyperinflation

Contrary to popular assumption, the Fed will get its constant wish for inflation, along with every other central bank armed with an unbacked currency – But far from the inflation of flawed theory, what they will get is a stampeding heard of rhinoceros.

Deflation Is Coming And It’s Not What You Think

Deflation is coming but not in the way most people think about it – at least not at first. The deflation that’s coming first is coming to financial assets. That’s what I worry about – I worry about asset bubble deflation.

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