Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Financial Markets Russian Roulette, Central Banks, and Gold

Stock-Markets / Financial Markets 2017 Mar 24, 2017 - 03:16 PM GMT

By: DeviantInvestor

Stock-Markets

Grab your ultra-reliable 357 magnum revolver and load the cylinder with six, not one, rounds of ammunition. Point the gun at your head if you are a member of the struggling middle-class. Imagine pulling the trigger and hoping …

Do you feel lucky?

The Six Loads of Ammunition for your 357 revolver are:


#1: Central banks and commercial banks exert a huge influence over all aspects of our financial lives. Paper currencies issued by central banks, digital currency units, credit card debt, pension funds, retirement accounts, checking accounts, Quantitative Easing, bond monetization, congress, regulators, Presidents, and the list goes on. Their game, their rules, your losses, and more of the same.

#2: Derivatives are used to “manage” markets, exercise control via futures markets over prices for physical and paper assets, increase leverage and enhance profits for the banks. Each derivative includes a commission – it is not a “zero-sum” game. Banks and CEO bonuses win.

#3: Debt, debt, and much more debt. Deficit spending increases debt, and governments run deficits. Interest is paid by individuals, corporations, and governments. Global debt of $200 trillion will require inflation, hyper-inflation or default. How long can government expenditures increase much more rapidly than revenues? Answer: As long as our current “Ponzi” finance can continue. How long can a Ponzi scheme last? Answer: Not forever. A default or hyper-inflation will occur, sooner rather than later. Fiat currencies will devalue.

#4: Near zero interest rates, negative interest rates, and financial repression. If central banks lower the interest paid on bonds and investments, pension plans and savers are penalized. Debtors, including governments, banks, and large corporations benefit. Your government plan and corporate pension plan are increasingly insolvent. Interest earnings are nearly zero. “High yield” checking accounts pay 0.01% interest. Your savings are depleted, and you may outlive your retirement assets. Welcome to the world of NIRP, ZIRP and financial repression that transfers assets and revenue from you to the banks, courtesy of central bank policies.

#5: High Frequency Trading or HFT is legalized skimming. Ultra-fast computers, PhD mathematics and software have replaced human traders. The result is consistent and profitable trading for the big financial institutions. Per zerohedge JP Morgan’s in-house trading group has been unprofitable on only two days in the past four years. Average trading revenues were $80 million per day for 2016. Someone contributed heavily to the JP Morgan casino winnings.

#6: Too Big To Fail, Too Big To Jail. If central banks and the five largest commercial banks contribute to congressional elections, and Presidents fill their key positions with executives from the financial industries, and regulators work for them, what is the likely result? If a few large commercial banks are too big to fail, the government and taxpayers must … and you know the drill. More debt, more influence, more derivatives, and a successful business model that benefits the wealthy far more than the middle class.

Review:

Your revolver is loaded with six rounds of ammunition, any of which can blast a hole in your net worth and financial security. The central bank loads are:

  • Their rules, their game.
  • Derivatives.
  • Debt, lots of unpayable debt.
  • Near zero interest paid on your savings as currencies are devalued.
  • HFT skims from many markets for banker profits.
  • Too big to fail. Bail-outs, bail-ins, taxpayer assistance, and bonus checks. (Google “bail-ins.”)

One, two, three … pull the trigger!

ALTERNATE CHOICES:

Instead of playing a guaranteed to fail game of Russian roulette with your financial security, consider a return to the basics:

  • Use real money – gold and silver – for your savings.
  • Gold has no counter-party risk. Silver has no counter-party risk. Most or all “paper” and debt based assets depend upon counter-parties.
  • Minimize debt and reduce your “debt footprint.”
  • Reconsider your investments in bonds, stocks, ever-increasing debt, devaluing currency units, minimal interest paid on savings, counter-party risk and trust in your friendly central bankers.

CONCLUSIONS:

  • Be cautious when playing Central Banker Russian Roulette with your savings and retirement funds. The stock market crash of 1987, the LTCM crash of 1998, the NASDAQ crash of 2000, and the global financial crisis of 2008 warned us about counter-party risk, excess debt and trusting Wall Street.
  • Trust gold and silver more, and use fewer paper investments.

Read: “Banks” from Peak Prosperity

Gary Christenson

GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail

© 2017 Copyright Deviant Investor - 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.

Deviant Investor Archive

© 2005-2022 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