‘The Great Financial Writeoff’

[errolanderson]

Agrivillers take note: Negative debt globally has exploded in 2019 . . . . As of August 2nd, global negative debt exceeded $14.5 trillion. This is a recent jump of $650 billion over one (1) month. Negative debt now makes up about 26 percent of total global sovereign bonds.

Also, U.S. and Cdn long term treasuries appear headed toward 0 percent. Negative debt now centred in Europe and Japan. Bond market crisis appears looming.

This is the beginning of the Great Financial writeoff (IMO) heading into 2020 and beyond. And central bankers are now powerless to stop . . . .

[SASKFARMER]

Or is that the plan all along start again at zero.

Except the minions.

[errolanderson]

Or is that the plan all along start again at zero.

Except the minions.

Saskfarmer . . . There is now a black hole engulfing world bond markets. There will be financial failures. And cutting rates now is quite ineffective (IMO). Central banks have run out of ammo and can no longer kick-the-can down the road.

The Keynesian hangover is now well underway . . . .

[Ache4Acres]

Saskfarmer . . . There is now a black hole engulfing world bond markets. There will be financial failures. And cutting rates now is quite ineffective (IMO). Central banks have run out of ammo and can no longer kick-the-can down the road.

The Keynesian hangover is now well underway . . . .

Errol

Swiss have had negative rates for a couple years, japan has had zero for a decade...why so sudden and alarmist now?

There is nothing stopping this from going on for another decade or more. The only time we really collapse is if the people wake up to the fact that money all is fake and they lose faith in the dollar as money. In reality that may never happen in our lifetime. People are brainwashed heavily by the easy access to media and propaganda (more than ever). With the usa and Canada being the cleanest dirty shirts....we are going to get a lot stronger before we get weaker.

[malleefarmer]

So does actually cause inflation or hype inflation eventually.

The basics of Keynesian model is govt spending? Create more jobs private and public.

Either borrow money for the jobs or raise taxes or just print money, once economy comes good cut back on the govt spending?

Which won’t happen so it’s a halfway house somewhere between capitalism and socialism

[SASKFARMER]

I have a question. Didn't Brazil and other countries get massive right downs or how are they growing when theoretically they were broke. African countries etc. Add who can ever pay off these debts.

Massive debt all over the world to who?

Like ontario will ever be able to pay it off.

[biglentil]

So does actually cause inflation or hype inflation eventually.

Its like a tire with a leak, monetary stimulus is like adding air to try and keep it inflated. You won't see hyperinflation until the tire blows, at that point no amount of air will work. Lehman Bros failure in 2008 popped the tire and interbank credit markets seized and the machine came to a stop, but with massive bailouts (a patch) and massive amounts of stimulus (air) the monetary system was saved. The Fed was supposed to pull air from the tire (QT) return rates to 4% but failed they just added air last week with the 1st rate cut since 2008. Is the tire in worse shape than the market knows? Lower rates add air but debt adds weight to the machine, and the machine is already over weight.

For example:
Even though Venezuela has the largest oil reserves in the world outside of Saudi Arabia the tire is hooped and no amount of air will inflate it (hyperinflation). The belief that a nations assets somehow back the currency is nonsense. Unless a currency is actually redeemable for hard assets its just pretty ink with a claim on thin air. Once the confidence in the tires ability to hold air is gone, that confidence is extremely difficult to regain.

[errolanderson]

Errol

Swiss have had negative rates for a couple years, japan has had zero for a decade...why so sudden and alarmist now?

There is nothing stopping this from going on for another decade or more. The only time we really collapse is if the people wake up to the fact that money all is fake and they lose faith in the dollar as money. In reality that may never happen in our lifetime. People are brainwashed heavily by the easy access to media and propaganda (more than ever). With the usa and Canada being the cleanest dirty shirts....we are going to get a lot stronger before we get weaker.

Ache, the acceleration of global negative debt has exploded over the past nine (9) months. Since October, 2018, global negative bond yields has jumped 150 percent. In Germany, the entire yield curve is now negative. Even a 30-year bond yield turned negative this past week.

And this trend is apt to remain in high gear into 2020 which heightens the failure of bond markets (IMO). My apologies for sounding alarmist, but some markets could go into hell ‘n a hand basket . . . .

[sumdumguy]

Errol, you must be really rich by now. If you are so damn convinced the sky is falling, short the bond market. Short everything- go for it!

[bucket]

Another crisis.....who is Trudeau going to write the cheque to this time....

While Trudeau says the economy is good. ....he seems to be spending like it's not....

And when does he quit sending money out of the country.....

[Rareearth]

Much appreciate your insight and comments Errol.

It’s easy to point out problems, the wise know the solutions, and the smart do something about it.

I am curious as to your solutions, and what if scenarios, with implications and opportunities,
- short the Bond markets
- buy real assets, land - many have done that and now it’s unsustainable
- housing many are predicting it to burst, yet people have to live some where
- commodities grains, funds were pouring money in as it was safe, tradeable, liquid etc seems the funds found stock market again
- will we see return by the funds into grain markets, more so and longer than before?
- stock markets, why can’t they go higher? And if they crash or fall into long steady, slow decline where will the money go?
- metals, gold? Investment or just every day commodities used in manufacturing
- crypto’s, threat or opportunity, face book thinks opportunity, and they have been right more than most the last 10 years


I’m interested in the cause and effects, risks and opportunities for my farming business.

[errolanderson]

Errol, you must be really rich by now. If you are so damn convinced the sky is falling, short the bond market. Short everything- go for it!

Again, my apologies for touching-a-nerve, but markets are always right, not opinion . . . .

Markets are now in the process of telling investors the true health of financial markets. Central bankers have failed miserably, talking up inflation until recently and pretending economies are healthy enough for rate hikes. QE has been a failure fixing nothing while producing producing far more capital than available investments. This created the U.S. stock market bubble. Simply, a parking lot for money struggling to find a home.

It’s not my intent to stir the pot, it’s my intent to offer opinion ‘outside’ of the political and banking sector that is directly tied to the health of ag business. If this motive is an insult to Agvillers, then it is time to leave this forum.