| When You Die...Biden Will Try To Seize Your House - Lunch Alert!
Published on DickMorris.com on July 14, 2021
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Patriot Gold Group:  Party's Over: Bank of America Sees Stagflationary Mess Slamming Markets in Second Half Bank of America's CIO Michael Hartnett reminds us that every day for the foreseeable future, as has been the case every day for the past 6 months, central banks bought $10 billion of bonds every day, the US federal government spent $20 billion every day, global stock market cap grew $73 billion every day, and US bond & stock issuance averaged $20 billion every day. The result: the just completed first half of 2021 was the 7th best for global stocks in the past 100 years... What does Hartnett think happen next? Looking at the second half, the BofA CIO sees: - inflation to stagflation
- QE to QT
- combo of rising Rates, Regulation, Redistribution (3Rs) & peak Positioning, Policy, Profits (3Ps) = low/negative stock/credit H2 returns
- optimal barbell long inflation & long quality
REQUEST: New to Precious Metal Investing? Concerned About a US Dollar that Has Lost Substantial Value Over the Past 25 Years? Learn How To Add Precious Metals To Your Retirement Account, With an A+ Rated BBB Metals Dealer. WSJ MarketWatch: The Looming Stagflationary Debt Crisis Will Deliver A One-Two Punch To Markets And Economies Roubini warns: After 'the Minsky Moment' crashes overheated speculative markets, 'the Volcker Moment' will arrive to crash the debt-burdened global economy Ultimately, a rising misery index—the sum of the inflation and unemployment rate—eventually will demand a "Volcker Moment"—destroying the economy in order to smother inflation. The question is not if but when. In April, I warned that today's extremely loose monetary and fiscal policies, when combined with a number of negative supply shocks, could result in 1970s-style stagflation (high inflation alongside a recession). In fact, the risk today is even bigger than it was then. LEARN: Learn How To Add Precious Metals To Your Retirement Account, With a Diamond+ Rated BBB Metals Dealer. After all, debt ratios in advanced economies and most emerging markets were much lower in the 1970s, which is why stagflation has not been associated with debt crises historically. If anything, unexpected inflation in the 1970s wiped out the real value of nominal debts at fixed rates, thus reducing many advanced economies' public-debt burdens. The warning signs are already apparent in today's high price-to-earnings ratios, low equity risk premiums, inflated housing and tech assets, and the irrational exuberance surrounding special purpose acquisition companies (SPACs), the crypto sector, high-yield corporate debt, collateralized loan obligations, private equity, meme stocks, and runaway retail day trading. Conversely, during the 2007-08 financial crisis, high debt ratios (private and public) caused a severe debt crisis—as housing bubbles burst—but the ensuing recession led to low inflation, if not outright deflation. Owing to the credit crunch, there was a macro shock to aggregate demand, whereas the risks today are on the supply side. Worst of both worlds We are thus left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years. At some point, this boom will culminate in a Minsky moment (a sudden loss of confidence), and tighter monetary policies will trigger a bust and crash. Making matters worse, central banks have effectively lost their independence, because they have been given little choice but to monetize massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. Central banks will be damned if they do and damned if they don't, and many governments will be semi-insolvent and thus unable to bail out banks, corporations, and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated world-wide. As inflation rises over the next few years, central banks will face a dilemma. If they start phasing out unconventional policies and raising policy rates to fight inflation, they will risk triggering a massive debt crisis and severe recession; but if they maintain a loose monetary policy, they will risk double-digit inflation—and deep stagflation when the next negative supply shocks emerge. LEARN: Learn How To Add Precious Metals To Your Retirement Account, With a Diamond+ Rated BBB Metals Dealer. The Volcker Moment To be sure, real long-term borrowing costs may initially fall if inflation rises unexpectedly and central banks are still behind the curve. But, over time, these costs will be pushed up by three factors. First, higher public and private debts will widen sovereign and private interest-rate spreads. Second, rising inflation and deepening uncertainty will drive up inflation risk premiums. And, third, a rising misery index—the sum of the inflation and unemployment rate—eventually will demand a "Volcker Moment." When former Fed Chair Paul Volcker hiked rates to tackle inflation in 1980-82, the result was a severe double-dip recession in the United States and a debt crisis and lost decade for Latin America. But now that global debt ratios are almost three times higher than in the early 1970s, any anti-inflationary policy would lead to a depression, rather than a severe recession. The question is not if but when. The Fed has been in a debt trap at least since December 2018, when a stock- and credit-market crash forced it to reverse its policy tightening a full year before COVID-19 struck. With inflation rising and stagflationary shocks looming, it is now even more ensnared. So, too, are the European Central Bank, the Bank of Japan, and the Bank of England. The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when. OFFER: New to Precious Metal Investing? We Love First Timers. Learn How To Add Precious Metals To Your Retirement Account, With an A+ Rated BBB Metals Dealer. The white metal actually has a double-top of around $50. It first got to that level in 1980 and then again in 2011. In a podcast earlier this year, Peter Schiff said $50 is the real resistance level. Once it breaks through, it will go much higher. More fundamentally, silver is a monetary metal, and the Federal Reserve has no exit strategy for its inflationary policy. Earlier this year, the Federal Reserve moved the goalposts to allow inflation to run hot. As Schiff noted at the time, by injecting so much stimulus into the economy in the past, the central bank has created a situation where it can never actually fight the inflation that it creates. LEARN: Learn How To Add Precious Metals To Your Retirement Account, With a Diamond+ Rated BBB Metals Dealer. The Next Market Crash Will Be Worse Than 2008 — Todd Horwitz The stock markets are massively overvalued and are due for a "nasty" correction, said Todd Horwitz, chief market strategist of BubbaTrading.com. "I think we're setting up for a very nasty correction at some point and I wouldn't be surprised to see that correction as big or bigger than 2008, 2009," Horwitz told David Lin, anchor for Kitco News. Horwitz said that this correction is likely to happen even before the Federal Reserve raises rates. REQUEST: New to Precious Metal Investing? Concerned About a US Dollar that Has Lost Substantial Value Over the Past 25 Years? Learn How To Add Precious Metals To Your Retirement Account, With an A+ Rated BBB Metals Dealer. 
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