Don’t be fooled by short-term pops in price due to plunging interest rates. We it comes to fixed income funds, past performance can no longer be achieved again. We are simply accelerating to the point of no returns in the US bond market.
TSP & Vanguard Smart Investor Posts
Matt Stoller is trying to wake up America to another crisis already baked into the cake. After reading his article (excerpts below) my view is simple, wall street greed is guilty of treason.
There is ample justification for gold’s runup – experimental activist monetary policy, a world of debt, a historic global securities Bubble, and a troubling geopolitical backdrop.
Playing a dangerous game, the Fed is now moving from accommodating this Bubble to actively stimulating it – from pushing back against a tightening of financial conditions to pushing forward already extraordinarily loose conditions.
It’s always the same: Everyone is happy to ignore bubbles when they’re inflating. Bubble analysis, by its nature, will appear foolish for a while. But bubbles inevitably burst. There is no doubt that China’s historic bubble will burst, and I expect this will prove the catalyst for faltering bubbles across the globe – including here in the U.S.
Inquiring minds are asking why the Fed is considering an interest rate cut when the SP500 is sitting at an all-time high, unemployment is near an historical low, wage growth is solid and of course we keep hearing we are in “the greatest economy ever”.
There is increasing evidence of market dislocation and associated Monetary Disorder… Where’s all this “money” coming from?
At this stage, however, global bonds have adopted an altogether different focus: China’s financial and economic structures are untenable. Sustaining rapid Credit growth is increasingly fraught with peril. With market players now questioning Beijing’s implicit guarantee for smaller and mid-sized banks and financial institutions, financial conditions are in the process of tightening at the financial system’s “periphery.” And tightened Credit conditions have begun to reverberate in the real economy.
A crisis-period experiment in QE came with profound repercussions. The Fed’s 2011 “exit strategy” was supplanted the following year by Draghi’s “whatever it takes” – and there’s been no turning back. The prospect of Whatever and Whenever It Takes QE as essential to the global central banker toolkit has Changed Everything.