though you are not sure what, given the global stock indices are continues to make new highs.
What you have mentioned are only credit bubble at microeconomic level. But at macro level, you need to look at the massive but unregulated "financial derivative market".
Nobody really know how large the market is. Some figures put it at north of $100 trillion in notional value of the contracts.
(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. ( I always wonder why no Wall Street analyst has looked into such pattern.)
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.
If the Wall Street professionals have loaded up massive amount of short positions, you can bet that the "ring fence" will not work.
The financial market is "make believe".
Given the fact that no financial media wants to focus on this, I have to say that the Wall Street professional are quietly loading up short positions, just in case the "ring fence" does not work.
The bailout by IMF and EU did not boost Greek's GDP and Financial situation enough to pay back the massive amount of loans. Now, it has even problem making periodic interest payment and repayment of loans.
That implies a big "DEFAULT" word. But many maybe too blind to see it, as the financial news media have not yet choose to focus on this serious issue. Maybe the wall street professional need time to load up on the proper bet around the almost certain "DEFAULT" of Greece.
Greek has trouble even to pay off the tranches of IMF loans due. I think that the only option is default, and start to work with BRICS.
Think about, if you have too much debt and could not pay the periodic repayment of principal, then the best option is to default, as long as you can secure the resources to continue to live.
The stock market needs all the excuse it could find to continue to go up. I guess that "heaven" is not very far away from here.
In order for the rate hike to happen, the stock market has to find all the excuse to go up.
All these beautiful economic theories are working as long as we are in the expansion phase of a multi-decade credit cycle. When we reached the implosion phase of the credit cycle, all these theories will lose their magic.
According to Bill Gross and Ray Dalio, we have reached the "saturation point" of a credit cycle. It is like a rubber band stretching to its limit: it can only contract to preserve its integrity. No matter what Federal Reserve does next, the inevitable will have to come, as dictated by the law of physics.
Minsk II deal appears to have failed. Why? What are the incentives for Russia to push for WW3?
Bill Gross was highly successful over long period of time. He sees truth clearly and he speaks truth as he sees them, in his Investment Outlook.
He probably has realized long time ago that the Wall Street game is "make believe".
The Minsk II deal appeared to have failed. It is quite obvious now that US does not want the conflict in Ukraine to stop and would likely use it as a stating ground to provoke WW3.
It is reassuring to hear from Mr. Putin directly in his four-hour long Live Q&A on Thursday that he see no WW3. Then who would have to be the next Hitler? The head of ISIL? :-))
The AIIB is more a symbol. It symbolize to the people all over the world that the era of "Bretton Weeds System" is going to end. It might take a few decades, but the trend has been set.
Four days later, one mail man landed on the West Lawn of Capital Hill in his Gyrocopter.
What is coming next? Billions of butterflies swamp Capitol Hill?? :-))
By the way, can anybody tell me where I can purchase the "thin Prosthetic finger" for Apple Watch Gold??
Bill Gross was the founder of PIMCO. He was forced out because he does not following the rhetoric of Federal Reserve. He has called Federal Reserve bluff on hiking the fed fund rate many times during the past two years.
Because PIMCO manages a few trillion dollars of client asset, and Wall Street could not tolerate somebody tells the truth as he sees it.
I think that he lost his mind by believing that he could do all that and would still remain in PIMCO.
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 experience "deep recession" within two years, as indirectly warned by financial industry titans such as Bill Gross and Ray Dalio.
Since the ruling could not tell the truth: the financial economic system resembles a PONZI scheme and will inevitably collapse. Then they need to start the WW3 and blame the resulted suffering on the losers of the war.
and ECB Chairman Mr. Draghi was visibly shaken.
Manifesto of the ECB Protestor
We own our own lives --
and in the face of the overwhelmingly powerful external
environment of the ECB's monetary police,
sometimes it's hard to remember.
We own our own lives --
and they're not the chips in the ECB's gambling game,
not to be played with, not to be sold, not to be devastated.
We own our own lives!
- will be the outcry of those who face repression,
when we begin to see our poverty not as personal defeat
or unchangeable destiny.
Today I'm just a butterfly sending you a sentence, but be afraid more are coming.
We will take back the power over our own lives.
The ECB's debt is not yet paid.
One of the take-away from this Manifesto is that the financial and economic difficulties that millions of people are suffering should no longer be considered as their personal failture. In part, it is the failure of the system. This system is like a gigantic beast that roam around the land with "creative destruction" in the name of profit maximization. Now it has realized that the END is near as the kinectic mechanism of multi-decade credit cycle sets in.
Many of us do not realize there are so many fellow citizens are suffering economically and financially, It is 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.