What do formerly successful hedge funds going out of business, wacky economic data points, and the election of populists like Donald Trump all have in common? All of them are the product of The Everything Bubble. In the aftermath of the 2008 Crisis, Central Banks attempted to corner the sovereign bond market via low interest ...
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What do formerly successful hedge funds going out of business, wacky economic data points, and the election of populists like Donald Trump all have in common?
All of them are the product of The Everything Bubble.
In the aftermath of the 2008 Crisis, Central Banks attempted to corner the sovereign bond market via low interest rates and massive QE programs.
Doing this represented the End Game for Central Bank policy. In a fiat-based monetary system, (meaning the currencies are not backed by anything) sovereign bonds represent the ultimate backstop of the financial system.
Remember, because currencies are not backed by anything, they can be depreciated via money printing. So they are not immune to inflation. Sovereign bonds on the other hand pay yields based on inflation and so hedge (at least partially) against this risk.
So when Central Banks attempted to create a bubble in the sovereign bond market, they were literally creating a bubble in EVERYTHING because every other asset in the system trades based on where sovereign bonds are trading.
This screwed up EVERYTHING. It screwed up economic data, it screwed up traditional investment analysis, and it screwed the average citizen hence why people like Donald Trump have been elected to positions of power.
Put simply, Central Banks have attempted to rig the entire system. Nothing is real anymore. Everything is trading based on a false risk profile induced by Central Banks cornering sovereign bonds.
This is why I coined the term The Everything Bubble in 2014. It’s also why I wrote a book on this issue as well as what’s coming down the pike: because when this bubble bursts (as all bubbles do) the policies Central Banks employ will make those from 2008-2015 look like a cakewalk.
We are putting together an Executive Summary outlining all of these issues as well as what’s to come when The Everything Bubble bursts.
It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:
Chief Market Strategist
Phoenix Capital Research