Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Inevitability of Financial Bubbles

Stock-Markets / Liquidity Bubble Jul 02, 2014 - 02:12 PM GMT

By: BATR

Stock-Markets

Financial instruments are inventions of gnomes from investment houses and exchanges. There is nothing intrinsic about profitability or guarantee that over time such transactions will be rewarding. Much like the games played at a casino, the baccarat banks that run the betting sport and wheel of fortune, are running the odds in their favor. If only the payoff was similar to the gambling den probability, the consistency of indulgence might be worth the risk. However, the systemic incentivisations within the markets themselves are designed to reflect little of economic proportion to actual trading results. Just look how the financial firms compensate their traders to substantiate that the underlying security of the "so called" investment, which bears little resemblance to quoted pricing.


When the New York Times reports that, Central Bankers Issue Strong Warning on Asset Bubbles, insiders have long ago known the news.
"Investors, desperate to earn returns when official interest rates are at or near record lows, have been driving up the prices of stocks and other assets with little regard for risk, the Bank for International Settlements in Basel, Switzerland, said in its annual report published on Sunday.

The overall, somewhat gloomy message from the central bankers was that the world is drunk on easy money and has already forgotten the lessons of recent years."

Even more to the point is an article in Zero Hedge, BIS Slams "Market Euphoria", Finds "Puzzling Disconnect" Between Economy And Market.

"There are many reasons to read the full report cover to cover, but perhaps the most prominent one is that, once again, the Bank of International Settlements has merely compiled a book report of all Zero Hedge posts not only over the past year, but since our inception.

Just because every single previous central-bank inflated bubble has always burst, resulting in tears for most (if not those who precipitated the crash and managed to load up on liquidating hard assets at firesale prices) this time will be different."

Of course knowing and taking advantage of this difference is the subject of nearly all financial newsletters. Most attempt to forecast the timing of this "mother of all bubbles". What to do to survive the aftermath fallout is an entirely different question. However, the sinister forces of international finance have no such problem, since they operate the money flow spigot and have virtually turned the investment game upside down under a zero interest rate environment.

Jesse Colombo argues, Why Bubbles Need To Be Warned About As Early As Possible.

"Even though other post-2009 bubbles such as China and U.S. higher education have not popped yet and the precise timing of their popping is unknowable (aside from knowing that it is too close for comfort), anyone with a modicum of critical thinking skills knows how they will end. Total outstanding U.S. student loans have quadrupled to $1.2 trillion in the past decade, while China’s total domestic credit more than doubled to $23 trillion from $9 trillion in 2008. The belief that it is wrong to have been warning about these bubbles even though they may not pop for several more years is simply ludicrous."

Notwithstanding, the imminent risk and busting of these examples, the really big one, known only to the inside track of central bankers and their respective ownership financial institutions, is yet to be revealed.
In the article, Accepting The Inevitability of Disaster, author Dr. Bayer cites a book, "The Ascent of Money" by Niall Ferguson with pointing out perhaps the most salient financial factoid of all:

"Yet the most important lesson of financial history is that sooner or later every bubble bursts; sooner or later the bearish sellers outnumber the bullish buyers; sooner or later greed flips into fear."

While technically, this theory may provide countless cases, missing is the ultimate fact that the forces behind the enormous flow of instant capital creation, from the infusion of additional and unlimited reserves, is the true power that operates and overwhelms disjointed overextended markets.

Busts happen because they are meant to occur. Bubbles are allowed to inflate because as Alain Sherter describes in Money Watch, that in the gilded ghettos of Wall Street it's "true that bubbles are rooted in the structure of financial systems. You know, things like monetary and tax policy, or, say, the sudden confluence of investment and commercial banking . . . For every historical outbreak of speculative fervor, there were people predicting it, and sometimes profiting when things finally blew."

The phrase that the savvy investor will 'Buy When There's Blood In The Streets', is attributive to Baron Nathan Rothschild, but this practice originated in the deep recesses of ancient history. The ability to incite and cause panics that trigger selloffs in financial instruments is the surest way to manipulate markets for guarantee gains. Now that the financial markets have entered the

US Government Debt Monetization Watch, the path towards the inevitable is set. It is crucial to acknowledge that central bank repurchase of public debt has all the marking of a designed disaster.

The bubble that looms over the international markets bears a distinct label, made in the USA. Even so, the when, where and what will initiate the next great depression crisis will be decided by the same banksters and globalist finance speculators, who deal off the bottom from their deck of marked cards.

The inept and excessive political policies that cause a catastrophic culture of deficit spending are set in motion by the very elements that profit from their control over debt created money. As long as the prime motive of financial gain, from busting financial bubbles is their goal, the cycle would simply repeat itself, using a different market as ground zero.

However, the stakes are raised and the end of the prevailing betting house is ripe for an ultra facelift, since the common public is broke. Worldwide default towers above all financial markets as inevitable. Popping a few more bubbles will just set the stage for a total global financial reset.

James Hall - July 2, 2014

Source: http://batr.org/negotium/070214.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2014 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules