This financial markets bubble is different, is it not?

P

pstrusi

Probably most of the people in this forum are familiar with famous historical financial bubbles, where the last one, 2007-2009 almost derailed the whole system. Watching the US stocks market performance this year might cause "Vertigo". However, I see a big difference in regards to regular bubbles: This time the creditors' money belongs to the world's central banks who unlike private creditors, can create money. They continue to pump liquidity to the system. There have been a couple of attempts to retire liquidity from the system but the real economies are so weak that they couldn't afford it. So I think govts won't let bubble pop in a hard way, everybody is trapped. Market's cycles are gone, it's been only one way up. The wisest advice would be staying with the trend until it changes really cause many bears have left broke along with this way.

What do you think?
 
I trade the Dow index value. Its a simple method -

Stay long in an uptrend.
Get out when price pulls back.
Get in long again when price resumes climbing.
Add as it rises.
Get out when price pulls back.
etc. etc.
 
nooby_mcnoob said:
Go wrong is a matter of perspective. Look at dalios reading of the Weimar Republic and how "managed" it was. It wasn't completely uncontrolled.
More...

I mean realistically if all the creditors are owned by world banks the country with the least debt will have the most control. Weimar Republic or not, they can't continue to print money realistically speaking. The debt will be sold to someone (probably China) and they'll control more and more of the global financial system.

The Weimar Republic is too short sighted. China in particular has a strategy of quiet intervention. After the TPP, China stepped in to gain a financial foothold in member countries (look at Australia and England in particular), while also providing impossible-to-pay-back loans to "bad" countries that are quickly written off in exchange for port access on major seas. It's a brilliant tactic, and why all this saber rattling Trump is doing is completely worthless. They already have a tactical foothold in basically all of South East Asia, Africa, The Pacific, and parts of Europe. Just wait until money is printed to the point someone needs a really big favor from a very rich and powerful country. Fighting wars is stupid, owning a country by enslaving them by their debt is far, far more Sun Tzu. Maybe we'll see the new silk road form in the next few decades.
 
Speaking from the POV of the USA...

There needs to be FISCAL POLICY reform. Congress creates the debt, by law the Fed only fulfills those wishes. The debt is sold to "third parties". Who those parties are, and what they do with the debt has little oversight. Case in point, banks purchase the debt and give it back to the Fed for safe-keeping, all the while earning what is thought to be risk-free interest. The money does not reach the economy, and exists on Fed balance sheet. The Fed side of the equation is MONETARY POLICY.

What is different is that the sovereign debt bubble plays directly to CONFIDENCE: The full faith and credit-worthiness of the US government. Without FISCAL REFORM, this is what makes "this" bubble different. However, in a word, Weimar happened because CONFIDENCE was lost. Thereby, this time is not a first and it is not "different" as you are suggesting.

The current REPO program has whiffs of eroded bank-to-bank confidence, primarily between US and foreign institutions, not so much US to US institutions. JMO
 
gaussian said:
I mean realistically if all the creditors are owned by world banks the country with the least debt will have the most control. Weimar Republic or not, they can't continue to print money realistically speaking. The debt will be sold to someone (probably China) and they'll control more and more of the global financial system.

The Weimar Republic is too short sighted. China in particular has a strategy of quiet intervention. After the TPP, China stepped in to gain a financial foothold in member countries (look at Australia and England in particular), while also providing impossible-to-pay-back loans to "bad" countries that are quickly written off in exchange for port access on major seas. It's a brilliant tactic, and why all this saber rattling Trump is doing is completely worthless. They already have a tactical foothold in basically all of South East Asia, Africa, The Pacific, and parts of Europe. Just wait until money is printed to the point someone needs a really big favor from a very rich and powerful country. Fighting wars is stupid, owning a country by enslaving them by their debt is far, far more Sun Tzu. Maybe we'll see the new silk road form in the next few decades.
More...

Don't know if you're right or wrong but when you owe someone billions of dollars it's generally their problem not yours. I doubt China would buy US debt to control the US.

But your comments about tactical control is absolutely on point.
 
Don't worry about the coming bubble.
Don't worry how this bubble will be like vs previous bubbles.
Don't worry how big the bubble will be.
Don't worry about this and that.

If you want to reach financial freedom,
change your mind set to :


EVERYDAY IS A GREAT TRADING DAY !!!!
EVERYNIGHT IS A GREAT TRADING NIGHT !!!!

________________________________
 
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