The Illusion Of Stability, The Inevitability Of Collapse
Beneath the illusory stability of rising GDP, the extremes of debt, leverage, stimulus and speculative frenzy required to keep the 'phantom wealth bubble' from imploding are all rising parabolically.
Imagine being at a party celebrating the vast wealth generated in the last ten months in stocks, cryptocurrencies, real estate and just about every other asset class. The lights flicker briefly but the host assures the crowd the generator powering the party is working perfectly.
Being a skeptic, you slip out on the excuse of bringing in more champagne and pay a visit to the generator room. To your horror, you find the entire arrangement held together with duct tape and rotted 2X4s, the electrical panel is an acrid-smelling mess of haphazard frayed wire and the generator is over-heated and vibrating off its foundation bolts. Whatever governor the engine once had is gone, it clearly won't last the night.
The party is the U.S. economy, and the generator room is the Federal Reserve, its proxies and the U.S. Treasury, all running to failure. What we're experiencing in real time is
the illusion of stability and the inevitability of collapse. I've prepared a few charts to illuminate this reality graphically.
Here's the illusion of stability in a nutshell: while the broadest measure of the economy, gross domestic product (GDP) has continued marching higher (in both nominal and real/inflation-adjusted terms), the amount of Federal Reserve stimulus and Federal debt required to keep pushing GDP up at the same rate has exploded higher and is tracking a parabolic blow-off.
https://www.zerohedge.com/markets/il...ility-collapse
This is a great read ^^^^^^
As stated back in March, and maintained since, now is a good time to be in wealth preservation mode and not a time to take any risks.
Those who are getting arrogant, thinking this is the "new norm" are about to get punched in the face.
The collapse is inevitable, it's imminent.
And soon!
And when it happens you won't have any time to react.
It will be fast and furious.
Again, there is ZERO fundamental basis for these new daily "market highs".
The economic data is being published is now some of the worst in history.
Overnight Repos continue to set record highs which is NEVER a good thing.
THE RISKS OF THE MARKET ARE FAR GREATER THAN ANY REWARD.
Trading volumes are running at roughly 20% below average which means there is little merit to the recent gains.
The summer is always light volume,
followed by heavy volume after Labor Day when traders return.
Let's see what happens on Tuesday.
I expect the trading volume to catch up to the economic reality fast.
The collapse is not a predictability, it's an inevitability.
And ALOT of people are going to get hurt REALLY BAD.
It has the potential to be even worse than The Great Depression.
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