Bill Gross & Chris Whalen & Michael Belkin: US Economy ‘Supernova’ On Path To Extinction. The Fed And The Treasury Are The Biggest Source Of Systemic Risks In The Market Today And We’re Facing A 1987 Selloff & Eventual Hyperinflation!!
‘Bernanke is just making it up as he goes along. The Fed is acting more like the Marx Brothers than serious regulators. The Fed and the Treasury are the biggest source of systemic risks in the market today, creating another bubble in housing and perhaps also in stocks.”
Lauren Lyster with Chris Whalen on Tech Ticker last Friday.
Today the man who counsels prominent hedge funds, investment banks, institutional money managers, mutual funds, pension funds, and high net worth individuals across the globe, told King World News that he believes we are facing a 1987 type scenario where the markets will get badly shaken. Belkin, President of Belkin Limited, also believes we are eventually headed for a destructive hyperinflation where gold will have an extended upside move.
Here is what Michael Belkin had to say in this powerful interview: “Back in 2009, in the spring, I was extremely bullish. Back in late 2002 when the stock market bottomed I was bullish on the economy and on markets. The time to buy is when blood is in the streets. We are so far from that.”
US economy ‘Supernova’ on path to extinction: In the 1980s it took $4 of new credit to generate $1 of real gross domestic product, while over the past decade it took $10, and since 2006, it has taken $20 to produce the same result
Bill Gross, the Pimco bond guru, said on Thursday a heavy reliance on credit has put the U.S. economy on a trajectory toward extinction, and he warned of an investor exodus from financial markets.
The level of credit needed to spur economic growth has grown five-fold since the 1980s, said Gross, who is a founder and co-chief investment officer of Pacific Investment Management Co.
He likened the need for more and more government stimulus to produce ever-diminishing rates of growth to Japan’s experience over the past decade.
Using a supernova as a metaphor for the U.S. financial system, Gross said the universe is expanding so rapidly now that in the far future it will end in a “big freeze.” Dependence on credit for growth will produce similar results, he said.
Gross said in the 1980s it took $4 of new credit to generate $1 of real gross domestic product, while over the past decade it took $10, and since 2006, it has taken $20 to produce the same result.
The end of credit markets will begin, said Gross, when assets offer too much risk and too little return, causing an investor exodus into alternatives such as cash or real assets.
Amid continuing inflationary policy, the US Dollar is at a critical juncture by both daily and weekly charts. Euro targets 142+ and the Yen approaches our target. Currency war kicks off; gold just sits there biding time.
US DOLLAR VULNERABLE TO A LOSS OF CONFIDENCE EVENT, MASSIVE SHIFT FROM PAPER TO PHYSICAL GOLD UNDERWAY
US debt negations have been delayed again, by squabbling political parties. We are told that in May everything will be fixed, but the debt continues to grow,and so does pressure on the US dollar.
The US dollar is vulnerable to a “loss of confidence” event. That could create a stunning decline, and a powerful move higher in the price of gold. A key level that I watch on the US dollar chart is the 80.50 area, which never seems to hold for very long.
This chart has numerous head & shoulders top patterns on it, and it closed out the month of January below 80.50, which is a very ominous sign for dollar holders, and great news for gold!
As this debt crisis continues to unfold, I expect more investors to transfer money from paper gold products tophysical gold….
The American Silver Eagle recorded the highest monthly sales figure in the history of the program. The new monthly sales record is made even more impressive by the fact that the coins were not available for more than half the month.
The man who made some of the boldest contrarian bets in the bond market last year has a new message for investors: get out of supposedly safe government debt now, before it is too late.
Would $30 trillion in extra buying power be inflationary when our entire current GDP is only about $15 trillion? Maybe, maybe not—but we need a game-changer here. First let’s celebrate the Fed’s record profits and its contribution to reducing our deficit. Then let’s seize the mom…
Pick a country from Mali to Egypt or Yemen to Syria; there are wars & rumors of war. The U.N. says it is “gravely concerned” about the escalation of violence. Meanwhile, the Iranians are speeding up their nuclear enrichment program. Back here in the U.S., there was a surprise con…