1. Same story, different day...........year ie more of the same fiat floods the world
    Dismiss Notice
  2. There are no markets
    Dismiss Notice
  3. Week of 6/24/2017 Closing prices & Chg Over Last Wk---- Gold $1256.40 Silver $16.64 Oil $43.01 USD $96.94
  4. "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"
    Dismiss Notice

We Are Heading Full Steam Into The Biggest Credit-Default

Discussion in 'Topical Discussions (In Depth)' started by Scorpio, Nov 26, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

    Joined:
    Mar 25, 2010
    Messages:
    23,833
    Likes Received:
    25,504
    Trophy Points:
    113
    for entertainment only,
    PS is notorious for spouting bullshit over the years,

    he is a marketer/huckster/extraordinaire





    We Are Heading Full Steam Into The Biggest Credit-Default Cycle In Our Nation’s History

    by IWB · Published November 21, 2017 · Updated November 25, 2017

    From Porter Stansberry in Stansberry Digest:

    This week, my famously bullish colleague Steve Sjuggerud mentioned a word of caution for the first time in many, many years…

    In today’s Digest, I (Porter) will point out a second – and in my view, even more worrisome – sign that this aging bull market is definitely running out of steam.

    But as always, before we get to the “meat and potatoes” of this week’s missive… just a few simple reminders.


    I write these weekly letters personally. I’ve done so since 1999 when I founded Stansberry Research from my kitchen table. You see, after bombarding you with e-mail advertisements all week and tweaking your emotional (fear and greed) buttons to sell subscriptions, I feel a tremendous obligation to provide you with the information I’d most want if our roles were reversed.

    Sadly, that frequently means telling you something you don’t want to hear and are likely to ignore. Often enough, telling folks the difficult truth about financial circumstances causes them to cancel their subscriptions, or as I like to say, “part as friends.”

    And I have a feeling that might happen today.

    You see, we’re entering into an incredibly dangerous phase of this bull market. Ironically, that also means most people will find stocks simply irresistible. But trust me, friends… it’s time to start selling.

    Let me show you why…

    Many, many obvious signs point to a gigantic financial bubble…


    • The prices of cryptocurrencies are soaring…
    • Stocks are trading at record levels…
    • Corporate bonds are paying record-low yields…
    • Art is selling for $450 million
    • Consumer debt is at a new all-time high less than 10 years after the biggest consumer-lending collapse in 50 years…
    What’s powering this bubble?

    It’s sovereign debt. Major governments around the world have gone mad with debt.

    I won’t bore you with the details (I promise). But consider this…

    For a period of almost 20 years – between 1979 and 1998 – the 10-year average growth rate in U.S. federal debt was more than 100%. That first big “spurt” of U.S. debt growth peaked in 1991 (with a 10-year increase in federal debt of 228%) that saw total federal debt per person in the U.S. grow from $3,700 to $20,000 by 1998.

    As I’m sure you’ll recall, the period between the early 1980s and the 1990s was generally fantastic for the stock market and for investors. At the beginning of a massive credit boom, everything seems great. That’s because when credit growth far exceeds savings, it allows an economy to consume far more than it’s producing.

    This “pulls forward” consumption, magnifies economic growth, and increases spending and usually wages, too. It’s a boom!

    But by 1998, so much consumption had been pulled forward that not enough global aggregate demand was left. A huge bust emerged, which hit commodities and emerging markets. Russia defaulted. Eventually, these problems caused the tech and telecom bubbles to burst, and the U.S. saw a severe bear market. Tech stocks fell about 80% from their peak.

    We’re about to see a similar bust.

    Over almost the entire last decade, we’ve seen another huge increase to government debt…

    Since 2009, U.S. government debt has again more than doubled on a rolling 10-year basis, peaking at 137% in 2012. By the end of this year, total federal debt per person in America will reach $62,000. That’s nearly $250,000 for a family of four.

    And that’s just the federal debt that we’ve created in this generation.

    On a per-capita basis, federal debt has more than tripled since 2000. You might have noticed that wages and the economy haven’t tripled…

    OK, no more data, I promise…

    Since this boom began in 2009, almost nobody has paid any attention to this massive increase in federal debt. You haven’t heard a word about our deficits from our politicians. Nobody cares. Why? Because since 2009, these debts haven’t caused our country’s borrowing costs to rise.

    Even though total federal debt outstanding has increased by 126% since 2008, our borrowing costs have fallen. We’re still paying about the same amount in interest on this debt as we did back in the early 1990s, when our national debt was only 22% of the size of today’s burden.

    The thing that matters to policymakers is how much the debt costs to maintain, not how much it costs to repay. That’s why you haven’t heard anything about it.

    Nobody is paying any attention to what’s about to happen next…

    As you know, the Federal Reserve has allowed the government to take on these massive debts by buying huge amounts of the debt that has been issued, and by manipulating interest rates lower so that borrowing costs were affordable.

    That’s causing big dislocations in the rest of the financial system. Low interest rates are mostly responsible for stocks soaring. (Price-to-earnings multiples expand as interest rates fall.)

    The Fed’s manipulation of interest rates also explains how and why consumer lending has reached all-time highs. As interest rates fell, lenders were forced to buy riskier and riskier loan portfolios to earn enough yield to match funding requirements for insurance portfolios and pensions.

    Article Continues Below
    The ongoing debt explosion is finally reaching its peak…

    Lots of those consumer loans are starting to go bad. We first saw default rates creeping up in subprime auto loans (as we warned they would).

    Now, credit-card default rates are moving higher, too. Soon, the mirage of student lending is going to completely fall apart. That’s when we’ll see fireworks across the credit spectrum. But that’s not all…

    Just as defaults are rising, the Fed has begun to raise rates.

    Look at what that’s going to do to the U.S. government’s funding costs over the next few years, according to projections from the Congressional Budget Office. Interest payments will nearly double, going from 6% to 11% of the federal budget…

    [​IMG]

    These rising costs are going to have a profound effect on the current widespread political belief that “deficits don’t matter,” just as soaring default rates on consumer lending are going to lead to much tougher lending standards on cars, colleges, and credit cards. All of that consumption that we’ve enjoyed on credit for the last decade is going to come back to haunt us. All of us.

    If I’m right…

    If the credit boom is over and the default cycle has begun, we should see plenty of warning signs in the months to come.

    First, the stock market “lions” we saw back in late 2015 will re-emerge. Transportation stocks will begin to disappoint as new orders for manufacturing decline. (That’s what Steve pointed out in the warning I referenced earlier.)

    You should also see the yield curve invert early next year. That’s extremely dangerous for financial stocks.

    The Fed is raising short-term interest rates. But long-term interest rates aren’t rising much. That’s because they’re based on the economy’s long-term growth potential. With such large debt burdens, we’re unlikely to see 3% growth going forward. We haven’t sustained rates of growth at that level since before President Obama. An inverted yield curve is a “get out” warning for financial stocks, so keep your eyes on the “spread” between two-year sovereign debt and 10-year sovereign debt…

    [​IMG]

    As you can see, the spread has been decreasing since 2013… and could turn negative by early next year. I believe that’s inevitable if the Fed continues to raise rates.

    That’s a big red flag for this bull market…

    This historic bull market has largely been the creation of low interest rates and buoyant credit markets.

    “Happily,” these tightening financial conditions and rising borrowing costs are arriving just in time for a huge wave of corporate high-yield bond maturities in 2018 and 2021. More than $1 trillion worth of speculative bonds is coming due before the end of 2021. There’s no way the majority of these loans can be repaid or refinanced.

    A particular worry is the debt related to retail/malls, high-cost energy production, and legacy media and entertainment.

    As I’ve long predicted, the end of this credit cycle will see the greatest legal transfer of wealth in history as equity holders are wiped out when these bonds default. We haven’t hit our big home run yet with our Stansberry’s Big Tradestrategy… But it’s coming.

    So, my friends, just a simple warning…

    We are heading full steam into the biggest credit-default cycle in our nation’s history…

    [​IMG]

    Do you think we’re prepared as a nation to ride out this storm? No way. Get ready for some real political fireworks.

    Do you think the “marginalized” members of our society are angry today, crying over statues, bitching about who gets to play quarterback, and rioting over a few police shootings? Just wait until their food stamps won’t cash… until doctors stop showing up for Medicare work… until their pensions collapse… and until the police strike over unpaid wages.

    Oh, yes… it’s all coming. And maybe a “Debt Jubilee,” too.

    Whoops, I’m sorry. Not bullish enough for you? Too bad.

    One last thing…

    I’ve followed Grant Williams for more than a decade. He’s a world-class economist based in Singapore. He has been warning about many of the same credit-related problems I’ve been writing about.

    He presented at our Stansberry Alliance Conference in September. I asked him for a significant personal favor: to be allowed to share his incredible presentation with you. He agreed. You’ll find the video to his presentation below. I hope you’ll take a few minutes and listen to his knowledgeable, contrarian view.

    [​IMG]

    http://investmentwatchblog.com/we-a...-credit-default-cycle-in-our-nations-history/
     
  2. michael59

    michael59 heads up-butts down Site Supporter ++ Platinum Bling

    Joined:
    Apr 1, 2014
    Messages:
    6,503
    Likes Received:
    2,969
    Trophy Points:
    113
    Gender:
    Male
    Occupation:
    20 years logging
    Location:
    on the low side of corporate Oregon
    these must be T-notes?

    saying the same thing as above?

    So? the interest is the profit one makes I take it. Personally I think the ten year is short term for inheritance ready while the two year is for personal enjoyment of the day.

    What I am getting out of this is when these two meet then there is no reason to go with the ten as the two year is so high in gain and when they adjust the ten year for it to sell then this will effect the thirty year note and all this from interest rates as they apply to you and me? Some how this does not compute but then I have always had a problem with this aspect this government vs. people debt of lending. As for stocks? I just try to spit on the news paper and which/where ever that loogie lands then that is the stock to pick.

    One thing Stansberry has right is those rising interest rates as we come off of the no interest. Seems every time they raise the rate they charge after a lull the market just goes poop and the newly elected office holder of the president gets to fix it. Or does he really fix things?

    I am thinking we are heading for the "Barn Yard Treatment," you know=where they hang you by your eye lids and punch you in the nuts till you blink, seems to happen every time. But I do question the outstanding T-notes that are held by the house of Saud and China. These seem to not be factored in so I am thinking Stansberry is only releasing half of what they know.
     
  3. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

    Joined:
    Oct 15, 2012
    Messages:
    8,681
    Likes Received:
    9,862
    Trophy Points:
    113
    Gender:
    Male
    Location:
    Ten-Oh-Cee
    Who's really gone mad, .govs or the institutions & investors that are "demanding" new .gov debt issuances to be employed as reserves and/or financial assets??? Duh, .govs rely upon market demand their debt, not the other way around....

    PS is mostly peddling bs! JMO
     
  4. michael59

    michael59 heads up-butts down Site Supporter ++ Platinum Bling

    Joined:
    Apr 1, 2014
    Messages:
    6,503
    Likes Received:
    2,969
    Trophy Points:
    113
    Gender:
    Male
    Occupation:
    20 years logging
    Location:
    on the low side of corporate Oregon
    Kind of what I was getting at. My problem is private as in people debt vs. gov debt.

    The way I see it is they cannot pay it, never could and with the percentage of .gov employees vs us in the private sector who along with them pay taxs this debt will never be rectified.

    But remember them words "Debt? Why I love debt." But when there is no demand because of the rate of gain dictates a why bother attitude then .govs will be laid off while agency's are restructured which will flush many of those mortgages onto the market along with the workforce into a already constricted yet growing market of jobs. Question is "can the growth sustain the flush?" I am thinking it cannot, sure in years it can but some one else will pull the plug and change the bath water and then we are right back where we started from; again.

    Me? I am just going from past recessions and such.
     
    solarion, searcher and BarnacleBob like this.
  5. Po'boy

    Po'boy Midas Member Midas Member Site Supporter

    Joined:
    Apr 6, 2010
    Messages:
    4,146
    Likes Received:
    1,961
    Trophy Points:
    113
    A house of cards built on sand.

    No gold standard no MAGA.
     
    Mujahideen and Aurumag like this.
  6. gliddenralston

    gliddenralston Gold Member Gold Chaser

    Joined:
    Apr 1, 2010
    Messages:
    1,179
    Likes Received:
    954
    Trophy Points:
    113
    sooner/later, he'll be right, then he'll be a genius!!
     
    the_shootist likes this.
  7. Alton

    Alton Gold Member Gold Chaser

    Joined:
    Apr 1, 2010
    Messages:
    2,464
    Likes Received:
    3,885
    Trophy Points:
    113
    Location:
    Michiana
    I don't know Porter Stansberry from Adam. Not a follower and barely a very occasional reader. His name is familiar and that's all I've got. That said he is right in the broad overview but his details are off the mark. This is NO time to be viewing today's economic landscape through a pre-2007 lens.

    Totally disregarding his claims alluding to timing which, at this point is not only quite wrong but, in fact, irrelevant as his allusions to other financial instruments and markets also swing wide of the mark. Anybody can pick enough dates/time frames and market circumstances to ultimately be right...no genius involved at all. Kind of like cold call sales, you're merely playing a numbers game.

    The only useful thing offered by PS here is that it will all end in a collapse. And no, not even DJ Trump and his MAGAvision can save the markets or the country. Failure is irrevocably "baked into the cake". At best DJ Trump and MAGAvision can soften and/or delay the inevitable... in a taking aspirin for a broken arm sort of way. There are other and better ways to prep for the ultimate collapse.
     
    Last edited: Nov 29, 2017
    the_shootist and Son of Gloin like this.
  8. Area51

    Area51 Silver Miner Seeker

    Joined:
    Oct 23, 2012
    Messages:
    800
    Likes Received:
    476
    Trophy Points:
    63
    Predicting the collapse of the US economy is like predicting the death of your neighbour - - it's inevitable and the only question is "when" not "if".

    There's absolutely nothing anyone can do to avoid - - the "best" that can be hoped for it to delay the inevitable.

    But it's a mathematical impossibility to continue servicing an ever expanding debt load. Cannot be done.
     
    Po'boy likes this.
  9. Son of Gloin

    Son of Gloin Gold Member Gold Chaser Site Supporter ++

    Joined:
    Apr 6, 2010
    Messages:
    2,689
    Likes Received:
    4,486
    Trophy Points:
    113
    Gender:
    Male
    Occupation:
    Delivery boy.
    Location:
    USA
    MAGAvision...✔ Alton
     
  10. Buck

    Buck Fabian Society Gold Chaser

    Joined:
    Apr 13, 2011
    Messages:
    2,524
    Likes Received:
    1,964
    Trophy Points:
    113
    Gender:
    Male
    what did the Clinton Cabal have in store for us when this occurred on her watch?

    This is all a set-up to make her look like a leader and what would she and her croonies have done to us when this all corrected?
     
  11. Po'boy

    Po'boy Midas Member Midas Member Site Supporter

    Joined:
    Apr 6, 2010
    Messages:
    4,146
    Likes Received:
    1,961
    Trophy Points:
    113
    Ugh Clinton pushed for fiat money?

    Repeal of glass steal I had heard yes, still haven't heard capt. save us talk about re-instating it though.

    Seems all this voting for saviors just makes bankers better off.

    Team a or b bankers win.

    Why is that?
     
  12. Po'boy

    Po'boy Midas Member Midas Member Site Supporter

    Joined:
    Apr 6, 2010
    Messages:
    4,146
    Likes Received:
    1,961
    Trophy Points:
    113
    I believe Bill was on duty when glass-steagle was killed, although I doubt the current banker tool in chief will do anything to have it reinstated.
     

Share This Page