Recycling Of The US dollars Financing The US Deficits Is Going To End (Part 3)

By Gijsbert Groenewegen – Re-Blogged From

Conclusion why the US dollar’s reserve status is at risk

What is at stake is the reserve status of US dollar following:

  1. Loss of dependency on Saudi oil because of the US becoming an oil net exporter as early as 2019 making the Petro-Dollar contract less of importance.
  2. The introduction of the Petro-Yuan-Gold contract planned for March 26.
  3. Trade tariffs that will reduce the flow of US dollars into foreign central banks and as such the recycling of US dollars into financing US deficits.
  4. The increasing budget and trade deficits that need financing from foreign investors (good for 48% of treasuries ownership), because Americans don’t save with a savings quote of 2.7%, and demanding higher interest rates. Also because the increasing US dollar hedging costs.
  5. The blowing out of the Libor-OIS spread, the global yardstick for cost of credit and uncertainty, risk in the global credit markets.
  6. Accelerating inflation, looming higher interest rates and the exhaustion/tapering of the QE measures that will not miss their impact on the tightening credit conditions resulting in the debasement of the currencies and especially the reserve currency.

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Deflation Of An Everything Bubble

By Graham Summers – Re-Blogged From

The big questions being tossed around Wall Street today are: why are markets such a mess? Why are we getting these wild swings?

The reality is that the markets are NOT a mess. These are actually normal healthy markets. Healthy markets move, sometimes a lot in a small span of time.

The real issue is that from ’09 until recently, the market was completely artificial because Central Banks cornered ALL risk by cornering the sovereign bond market.

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Wage Inflation Coming. Does This Mean Spiking Interest Rates?

By John Rubino – Re-Blogged From Dollar Collapse

Dave, the plumber who saves us every six or so months when a leaking pipe, water heater, or toilet threatens to destroy our walls and ceilings, was here the other day. As usual he fixed the problem right away and charged us less than expected. We love this guy.

While he was working I asked him how business was going. He claimed to be swamped to the point of turning away jobs. I asked why he doesn’t hire more plumbers to leverage his client list. Because, he replied, there are no available plumbers: “If a plumber is unemployed today there’s a really good reason for it.” In other words the home maintenance part of the labor market is hot and getting hotter.

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It’s Ugly If You Are Looking for Value in Equitie

By Patrick Watson – Re-Blogged From Newsmax

The long-awaited Strategic Investment Conference 2018 kicked off with a keynote from David Rosenberg of Gluskin Sheff titled, “Year of the Dog: Will It Bark or Bite?” (Spoiler: The answer is “bite.”)

Rosenberg began by running through a list of his own metrics: forward P/E, price/sales, price/book value, enterprise value/EBITDA. All of them point to record-high valuations.

Image: David Rosenberg: It's Ugly If You Are Looking for Value in Equities

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All Fed up on Peak Debt

By David Haggith – Re-Blogged From The Great Recession Blog

How inflated with debt have we become? How long can we float on our own bloat? Reasonably trim in 1970, the sum of all debt publicly financed by the US government was $275 billion. Last week, the government sought to raise $258 billion in just one week! The weekly financing to keep the government afloat is now about equal to all the debt it amassed over the course of its first 188 years.

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Currencies Will Be ‘Flushed Down The Toilet’

By Mike Gleason – Re-Blogged From

Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies, and author of the book The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market.

Michael is a well-known money manager and a fantastic market commentator, and over the past few years has been a wonderful guest and one of our favorite interviews here on the Money Metals Podcast and we always enjoy getting his Austrian economist viewpoint.

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The Dumb Money is Helping the Smart Money Exit the Stock Market

By David Haggith – Re-Blogged From The Great Recession Blog

Bloomberg this week ran a story telling us how the smart money gets out of the stock market when it hits its all-time peak and how the dumb money helps the smart money out. Only they didn’t know that was what they were writing. It typically happens this way:

At the end of a deliriously euphoric market rally when the market is preparing to crash, all the Joe Six-packs, mom and pop and the family dog open trading accounts and try to chase the tail of market action. Many throw in their entire retirement funds, pawn the dog’s collar and take out loans on credit cards to buy in as much as they can. By buying in late, they help provide a smooth exit for the smart money. At least for some of it. It is the little guys, tough from hard labor, whose muscles are employed to push the money bags of the rich to the top of the mountain from which the little guys are allowed to jump off.

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