Bits and Pieces – 20171020, Friday

 

Commentary: After publishing my last commentary, Bits and Pieces – 20171013, Friday, I came across this video by Gordon T. Long: UnderTheLens – 09 21 17 – OCTOBER – Coming “Nationalization” of Markets. It subsumes my comments with the exception of the scenario of how the Fed might take over the US stock market. In the 26 minutes, he does a much more thorough job of documenting how central banks globally are the dominant players in many capital markets such as sovereign bonds, and are rapidly becoming the dominant players in stock markets.

In the case of stocks, where their “printed money” has gone is a puzzle. If they print a billion dollars and buy a billion worth of equities in the market, the money goes into the accounts of the sellers. What do the sellers do with it? Do they use it to ‘walk the market higher’ isolating the new money in the market or do they take it out and move it into the economy causing inflationary pressures?

Already, in some sovereign bond markets, there is a liquidity problem, Investment funds and pension funds have traditionally used sovereign bonds as a a stable, low-risk component of their portfolios. These institutions are finding that they can’t get the bonds they require because the governments are mopping them up. The other problem is that these are not free markets and proper risk and price discovery simply can’t happen. Given the global history of sovereign defaults, particularly by the top economies, a zero interest or negative rate sovereign bond is simply not pricing in the real, if small, risk of a sovereign default. With central bank taking over ownership in these markets the risk of default is rising because so far, current monetary policy is proving to be a one way street.

WWIII: Although this article’s title suggests that China is preparing to invade NK, the highway construction may also be seen as facilitating the rapid movement of troops and supplies into an NK conflict initiated by the US and in partial support of NK which China does not want to see move into a Western sphere of influence: Road To World War 3 Unveiled: Is China Planning To Deploy Its Army Against North Korea?.

The American Empire (AE): The question remains as to how many fronts the AE can fight wars on simultaneously. It is ramping up in Afghanistan and war with North Korea remains a strong possibility. In my last post, Bits and Pieces – 20171013, Friday,  I noted that Britain may be only the first to align with the AE against NK while China has said a preemptive US attack would bring them in on NK’s side. I also noted how NATO continues to aggressively build up forces near Russia’s border. And Iran is a game piece actively in play: War with Iran Was Planned Decades Ago.

The US has engineered Cold War II which gives new life to the intelligence community and the military-industrial complex. These are scary times.

Climate: First it was cow farts (California’s New Cow Fart Regulations Totally Stink) that were destroying the planet. Now we find that clam farts are even worse: Oyster, Clams & Mussels Produce Massive Global Warming Gas. I’ve known some people that scientists should also investigate. They can sometimes be found in public elevators and crowded locations. Taking this theme further, environmental groups have even united to prevent this new sport from being added to the Olympics.

Bits and Pieces: As you know, I consider George Soros to be one of the most dangerous men on the planet. Here he comes: George Soros Donates $18 Billion To His ‘Open Society’ Foundation.

Martin Armstrong features short articles on governments’ search for more tax revenue globally. Canada rarely comes up but he has one today: Canada’s Hunt For Taxes Turns on Minimum Wage Earners. Also in the Canada corner: ScotiaMocatta Put For Sale After Multibillion Money-Laundering Scandal.

 

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