Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Best Time / Month to Buy a Used Car From a UK Dealer - 16th Dec 17
Relief Rally in Gold Mining Stocks - 16th Dec 17
Amid Bad Fundamentals, Gold Sector Rally May Have Begun - 16th Dec 17
Gold Bullish on US Fed Interest Rate Hike - 16th Dec 17
The LORAX Explains What Happened to Sheffield's Street Trees 2017 - 16th Dec 17
Bitcoin Trading Alert: Bitcoin Pauses – Will Appreciation Follow? - 16th Dec 17
SanDisk Ultra 128gb 100mbs Micro SD Card for Smartphone's Speed Test - 15th Dec 17
Inflation is Spiking Globally… Bond Bubble Bursts in 3… 2… - 15th Dec 17
Sheffield's 'Real' LORAX Defending the Trees From the Labour City Council Patrol Units - 15th Dec 17
Stock Market Decline Signals are Near - 15th Dec 17
Santa Is Putting Christmas On The Blockchain And Saving Billions - 14th Dec 17
The Unprotected, the Protected, the Vulnerably Protected Classes—Which Are You? - 14th Dec 17
Gold’s Upside Target - 14th Dec 17
Year-end US Interest Rate Hike Again Proves To Be Launchpad For Gold Price - 14th Dec 17
2 Charts That Might Define the Fed’s Jerome Powell Era - 13th Dec 17
UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - 13th Dec 17
Stock Market Elliott Wave Forecasts - Is the World coming to the end? - 13th Dec 17
A Method Traders Can Use to Confirm an Elliott Wave Count - 13th Dec 17
Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - 13th Dec 17
A Former Wall Street Veteran: Good Traders Are Born, Not Trained - 12th Dec 17
Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts to Continue? - 12th Dec 17
Masters of Economic and Political Illusion – in Taxes, Debt, Government, and Markets - 12th Dec 17
Approved Used Land Rover Main Dealer Real Customer Buying Guide - Hunters, Chester - 12th Dec 17
Gold Price 100% Bullish Signal - 12th Dec 17
Epic Stock Market & Fixed Income Bubble Will Not End Well - 12th Dec 17
Bitcoin can be stolen. Although Can’t be hacked - 11th Dec 17
Have Stocks Reached A Permanently Rigged Plateau? - 11th Dec 17
Trying To Beat The System Is A Fatally Flawed Investment Strategy - 11th Dec 17
Is This The Beginning Of The Next Silver Rush? - 11th Dec 17
The Dow Gold Ratio - 11th Dec 17
Evidence of a Stock Market Top Mounting - 10th Dec 17
Bitcoin Doesn’t Exist – Forks and Mad Max - 10th Dec 17

Market Oracle FREE Newsletter

Traders Workshop

Food Stamps, Subprime and Hyperinflation

Stock-Markets / HyperInflation Jan 01, 2015 - 12:42 PM GMT

By: Dr_Jeff_Lewis

Stock-Markets

The next generation will look back at the current period with utter astonishment. The archives will be riddled with debates and all manner of euphemisms for what led to the collapse of the world’s first and last fiat reserve currency. 

It is a process well underway.  Take a look at two seemingly unrelated, though current, economic-financial trends:  Food stamps and subprime. 

The case of spending compared with risk. Food assistance is but a tiny tributary broken off from a massive river of denial. 


Subprime represents the nadir of ‘risk-on’ fueled monetary euphoria. Spending that comes from money that does not exist. Why, when the next bubble bursts, they will need to step in even more. 

Of course, it’s not exactly an efficient form of spending:

As The Daily Signal reports:

(http://dailysignal.com/2014/12/22/how-much-was-misspent-on-food-stamps-in-2014/?utm_source=twitter&utm_medium=social)

This year the U.S. Department of Agriculture misspent $2.4 billion on food stamps, according to a November report from the USDA Office of Inspector General.”

“Misspending” means the USDA gave a household either more or less food stamp benefits than it should have received. Historical data shows most misspending results in overpayments.(What’s even more incredible is the dollars misspent on food stamps equates to at least 10% of the dollar value of available above ground silver). 

One of many potential triggers - enough white noise to agitate the Ponzi - is back. 
This can’t end well. 

 Why Everyone Is About To Rush Into Subprime Mortgage Debt (Again)

If there is one thing the investing public has 'learned' in the last few years, it is 'no matter how bad the fundamentals, if it's been working, buy more of it'. And so, it is with almost certain confidence that we should expect a resurgent flood of yield-chasing muppetry into no more egregious idiocy than the subprime-mortgage-debt market.

As Bloomberg reports, the subprime slime-backed securities that were created in the years before the financial crisis in 2008 (which marked the last time they were issued) have gained almost 12% this year, or six times more than junk-rated corporate debt, according to Barclays. As one money 'manager' proclaims, "a lot of the uncertainty around the asset class has been taken away." Indeed, home prices will never go down ever again, right? 

Of course this time is different, right? Not so much…

Of course, we have some deflationary pressures. 

Baby Boomers will start turning 70 at the rate of 10,000 a day for the next 18 years. The vast majority are massively under funded for retirement. This trend represents massive liabilities that cannot be paid for with growth that doesn't exist. 

It is nearly impossible to manage official liabilities with current tax revenue. Annual deficits will explode, no matter how hard they try to hide the numbers. 

How will the gap be met by money printing, to the point of no return?  Once the world sees this for what it is - when the bond market begins to fall, all control be lost.

Once we pass the Rubicon. 

The point where deficit spending is fully printed. Or the majority of government of spending is conjured. Then we see the final stages of collapse. It could happen fast. 

We now have a triple bubble - housing, equities, and treasuries. And within the housing subprime is back with a vengeance. Within equities, a mini-subprime is even unfolding within the energy complex. And treasuries continue to outperform as the U.S. continues to be the cleanest dirty shirt. 

Housing shows indications of slowing. Despite low interest rates, lending is for a tiny percentage of the market. 

Financial repression encourages (forces) banks to seek out the shadows for interest arbitrage for another ‘good’ than the interests of yield-starved shareholders. And now that the final wave of hedge investment − cash only deals - have disappeared, down comes the price.  

And a mini oil subprime crisis is sending waves resonating into the greater credit and derivative markets - pushing world producers closer to the edge. This is mirrored by the shadow derivative engine - always leaking its everlasting coolant, sustained on hope and the promise of endless credit. 

Politically, too big to fail/too big to bail is a done deal. In the minds of most, the Fed’s intervention either worked or they didn't do enough. 

The canaries are contained and have a low base from which to climb. 

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 2005-2018 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

Catching a Falling Financial Knife