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sky_walker616 125 posts  |  Last Activity: Apr 24, 2015 1:40 PM Member since: Jan 20, 2005
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  • sky_walker616 sky_walker616 Apr 24, 2015 1:40 PM Flag

    Part II.
    (3) 2015 - ???
    The US and Global economies were rescued from almost "total collapse" of 2008 financial crisis by the unprecedented "easy money" policies adopted by various central banks, including Federal Reserve, ECB, etc. People all over the world know now that the reserve currency is not just fiat but "make believe" -- Central Banks can print, or borrow from the "thin air", unlimited amount of money. ( That is probably "In God We Trust" is printed on all US Dollar bills) All these monetary and fiscal measures have only served to postpone the onset of the "implosion" phase of this current credit cycle. Several financial industry Titans have commented that the credit expansion in US economy has reached the "saturation point", where each addition unit of new credit/debt can no longer justify the risk of extending such credit/debt. The next to come is likely the contraction phase ( or implosion phase) of the cycle.

    It will be hard to predict the exact outcome of this "implosion", as we have so many unknowns in our financial economic systems: loosely regulated hedge funds, investment pools; financial derivative markets; the extreme dislocation of risk and award; and the last but not the least, the complacency stemmed from multi-decade of boom and perceived prosperity.

  • Part I.
    The following are three most recent periods where the US economy experienced "implosion" phase of a multi-decade credit cycle.

    (1) 1929 - 1939
    Some significant geopolitical events that have direct or indirect impact on the timing of the implosion phase of the multi-decade cycle. ( It is important to bear in mind that, although these extraneous events seemed to have been the CAUSE of the onset of the "implosion", they could be manipulated to coincide with it so that people would not blame the economic malaise on the credit contraction dictated by the kinetic mechanism that is inherent in the financial economy. )
    (a) The Great Depression started in Oct 1929, as the stock market on Wall Street crashed. Worldwide nominal GDP fell by 15% from 1929 to 1932.
    (b) In 1933, many banks had closed. The gold convertibility was suspended.
    (c) From 1937-38, a "deep recession" in the depression.
    (d) The US started to recover after the onset of the WW2 in Europe.

    (2) 1971 - 1981
    (a) The collapse of the Bretton Woods I System in August 1971, as the US unilaterally terminated convertibility of the US Dollar to gold. The result was a depreciation of the dollar and other industrialized nations' currencies. Because oil was priced in dollars, oil producer's real income decreased.
    (b) The Oil Crisis in October 1973. OPEC raised the posted price of oil by 70%, to %5.11 a barrel. Over time, the price rose to as high as $12 by 1974, creating a massive extraneous shock to the US and world economy.
    (c)Nominal yield on 10-year US Treasury Note rose from about 6% in 1971 to more than 15% in 1981. After that, the yield started a multil-decade decline to as low as 1.5% in 2014.

  • sky_walker616 sky_walker616 Apr 24, 2015 9:49 AM Flag

    Part II.
    (3) 2015 - ???
    The US and Global economies were rescued from almost "total collapse" of 2008 financial crisis by the unprecedented "easy money" policies adopted by various central banks, including Federal Reserve, ECB, etc. People all over the world know now that the reserve currency is not just fiat but "make believe" -- Central Banks can print, or borrow from the "thin air", unlimited amount of money. ( That is probably "In God We Trust" is printed on all US Dollar bills) All these monetary and fiscal measures have only served to postpone the onset of the "implosion" phase of this current credit cycle. Several financial industry Titans have commented that the credit expansion in US economy has reached the "saturation point", where each addition unit of new credit/debt can no longer justify the risk of extending such credit/debt. The next to come is likely the contraction phase ( or implosion phase) of the cycle.

    It will be hard to predict the exact outcome of this "implosion", as we have so many unknowns in our financial economic systems: loosely regulated hedge funds, investment pools; financial derivative markets; the extreme dislocation of risk and award; and the last but not the least, the complacency stemmed from multi-decades of boom and perceived prosperity.

  • Part I.
    The following are three most recent periods where the US economy experienced "implosion" phase of a multi-decade credit cycle.

    (1) 1929 - 1939
    Some significant geopolitical events that have direct or indirect impact on the timing of the implosion phase of the multi-decade cycle. ( It is important to bear in mind that, although these extraneous events seemed to have been the CAUSE of the onset of the "implosion", they could be manipulated to coincide with it so that people would not blame the economic malaise on the credit contraction dictated by the kinetic mechanism that is inherent in the financial economy. )
    (a) The Great Depression started in Oct 1929, as the stock market on Wall Street crashed. Worldwide nominal GDP fell by 15% from 1929 to 1932.
    (b) In 1933, many banks had closed. The gold convertibility was suspended.
    (c) From 1937-38, a "deep recession" in the depression.
    (d) The US started to recover after the onset of the WW2 in Europe.

    (2) 1971 - 1981
    (a) The collapse of the Bretton Woods I System in August 1971, as the US unilaterally terminated convertibility of the US Dollar to gold. The result was a depreciation of the dollar and other industrialized nations' currencies. Because oil was priced in dollars, oil producer's real income decreased.
    (b) The Oil Crisis in October 1973. OPEC raised the posted price of oil by 70%, to %5.11 a barrel. Over time, the price rose to as high as $12 by 1974, creating a massive extraneous shock to the US and world economy.
    (c)Nominal yield on 10-year US Treasury Note rose from about 6% in 1971 to more than 15% in 1981. After that, the yield started a multil-decade decline to as low as 1.5% in 2014.

  • I wonder why there is no coverage or in-depth analysis on this serious issue on financial media. Maybe the wall street professionals are quietly load up massive bets before the "break-out" of the news.

    It does not take a genius to see that Greek "DEFAULT" is certain, as it has even problem to pay the interest and periodic repayment of principals that it owes to EU and IMF.

  • sky_walker616 sky_walker616 Apr 22, 2015 9:54 AM Flag

    Climb ! Climb! The Stock Fairy!
    You want the Center Bank to hike the rate, don't you??

  • sky_walker616 sky_walker616 Apr 22, 2015 9:52 AM Flag

    Take a look of the following two periods and then you might figure out what is go come:

    (1) 1929-1939
    (2) 1971-1981

  • sky_walker616 sky_walker616 Apr 22, 2015 9:51 AM Flag

    If the stock market stay flat or even goes down, then the Q2 GDP growth will be again below 2.0%, if not lower. Will Federal Reserve raise the fund rate then?

    It could unless it gets the assurance from the stock markets that the latter will continue to climb.

    No matter what happen, you know that we are at very dangerous stage of this "make believe" game.

  • sky_walker616 sky_walker616 Apr 21, 2015 9:27 AM Flag

    The GDP growth is sluggish. The central bank needs more wealth effect of the stock price appreciation to allow them to conduct even on rate hike later in 2015.

    It is always possible that the talk of "rate hike" is just a smoke screen to get more unsuspecting investors to buy into the "pay fixed" side of the Interest Rate Swap contracts.

  • sky_walker616 sky_walker616 Apr 21, 2015 9:24 AM Flag

    The stock market has to find way to continue to climb. Otherwise, people would no longer the "magic power" of those Wizards at the Federal Reserve.

  • US might see "deep recession" within two years, as warned by financial industry titans Bill Gross and Ray Dalio. It will be inevitable no matter what Federal Reserve does next as the implosion phase of multi-decade credit cycle sets in, dictated by the inherent kinetic mechanism of the financial economic system.

    Ruling elite in UK/US wants to provoke Russian into WW3, in part to shift blame of the impending slow-motion collapse of its financial economic system. ( The collapse could be sudden if the unregulated financial derivative market crashes.)
    70% of US economy is consumer spending: spending on goods and services. The former is quite straightforward. The latter includes medical spending, legal spending, financial services, tax services etc. That is probably why 50% marriage end up in divorce; the federal tax code has hundreds of thousands of pages; the colonoscopy, among numerous other medical services, is recommended every two years; there are various saving account schemes to encourage savers to invest in stock markets , etc...
    The high cost of Universal Healthcare program plus making tens of millions of undocumented immigrants eligible for generous federal and state social welfare programs helped a lot to boost GDP growth in the short-term. ( I have to envy the Elites' great ability in piece-meal growth engineering. But I wonder what is in the pipeline after all the tricks are running out.)
    According to FT report recently that Germany has issued five-year bond with negative interest. People tend to forget that the foundation of the modern finance is built on the "time value of the money" and capital being a scarce resource. The negative interest rate indicates the beginning of the unraveling of the modern financial economic system. Such trend, if protracted, will lead to profound social changes.
    So they are just waiting for Russia to have the first shot. If not, then false flag operation might be perpetrated to crash the stock market and start the WW3.

  • US might see "deep recession" within two years, as warned by financial industry titans Bill Gross and Ray Dalio. It will be inevitable no matter what Federal Reserve does next as the implosion phase of multi-decade credit cycle sets in, dictated by the inherent kinetic mechanism of the financial economic system.

    Ruling elite in UK/US wants to provoke Russian into WW3, in part to shift blame of the impending slow-motion collapse of its financial economic system. ( The collapse could be sudden if the unregulated financial derivative market crashes.)
    70% of US economy is consumer spending: spending on goods and services. The former is quite straightforward. The latter includes medical spending, legal spending, financial services, tax services etc. That is probably why 50% marriage end up in divorce; the federal tax code has hundreds of thousands of pages; the colonoscopy, among numerous other medical services, is recommended every two years; there are various saving account schemes to encourage savers to invest in stock markets , etc...
    The high cost of Universal Healthcare program plus making tens of millions of undocumented immigrants eligible for generous federal and state social welfare programs helped a lot to boost GDP growth in the short-term. ( I have to envy the Elites' great ability in piece-meal growth engineering. But I wonder what is in the pipeline after all the tricks are running out.)
    According to FT report recently that Germany has issued five-year bond with negative interest. People tend to forget that the foundation of the modern finance is built on the "time value of the money" and capital being a scarce resource. The negative interest rate indicates the beginning of the unraveling of the modern financial economic system. Such trend, if protracted, will lead to profound social changes.
    So they are just waiting for Russia to have the first shot. If not, then false flag operation might be perpetrated to crash the stock market and start the WW3

  • sky_walker616 sky_walker616 Apr 16, 2015 5:15 PM Flag

    The butterfly will come, at the right moment. :-))

  • sky_walker616 sky_walker616 Apr 16, 2015 9:51 AM Flag

    Millions of people who suffered economically and financially were convince that their predicament was due to their personal failure, and that "creative destruction" is good. Even Alan Greenspan acknowledged that the "destruction" part of the "creative destruction" is real, and when you are the receiver of it, the suffering is 100%.

  • sky_walker616 sky_walker616 Apr 16, 2015 8:01 AM Flag

    People might ask why we are not aware of all these sufferings?
    Only because the reported economic numbers are in aggregate. If the stock market mints ten new millionaires, then their gain could obscure the economic suffering of thousands of average people.

  • sky_walker616 sky_walker616 Apr 15, 2015 4:01 PM Flag

    According to Fed's survey, 1/3 of American are still under more or less financial stress in 2014, five years after the financial crisis.

    In the upcoming "deep recession", expect more suffering people and hence more "butterflies".

  • sky_walker616 sky_walker616 Apr 15, 2015 2:12 PM Flag

    It looks like that the stock market will deliver to the Federal Reserve the 10-15% runup in stock prices and then the latter will deliver the first rate hike in six years.

    It is obviously a "quid pro quo" market now.

  • Mr. Draghi was apparently shaken by the unexpected "attack" in today's ECB monetary keynote. Later in the Q/A session, his response to the question from EU Youth about the solution to the Youth Unemployment problem is --- the employed workers should work less hours so that more people can be employed. Apparently the scared Draghi is telling the truth straightly from his mind.

    What come next? Your income will not depend on how many hours you have worked.

    Is this a new idea? No. Karl Marx proposed that more than one Century ago.

  • Mr. Draghi was apparently shaken by the unexpected "attack" during his keynote speech on ECB monetary policy today. Later in the Q/A session, his response to the question from EU Youth about the solution to the Youth Unemployment problem is --- the employed workers should work less hours so that more people can be employed.

    What come next? Your income will not depend on how many hours you have worked.

    Is this a new idea? No. Karl Marx proposed that more than one Century ago.

    Given the prospect of "deep recession" within two years, the ruling Elite might seriously consider such previously unimaginable social policies. And the implementation of them might require an extraordinary situation, like WW3.

  • sky_walker616 sky_walker616 Apr 14, 2015 6:23 PM Flag

    Interestingly, Federal Reserve is a private organization, not part of US government.
    Who give the right for it to determine who lives and who dies?

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