Tuesday, June 23, 2015


The Scylla and Charybdis of slowing growth and rising interest rates

Ponzi schemes require relentless growth and liquidity, both of which are now reversing. Central planning for billunaires is ending. Badly.

Global growth is at a decade low 2.8% (ex. 2009) and global short-term interest rates are at a 500 year low. So the accelerator is on the floor, but the car is stalling.

Meanwhile, globally, long-term borrowing costs are rising across the board - U.S., Europe, China, Japan, Emerging Markets.

Meaning that liquidity is now tightening into a slowing economy...

Global Dow with global growth (red):

De Facto tightening
U.S. Treasury 30 year Bond (prices) with Real Estate (REITS):

Reducing liquidity into a weakening economy. End of Ponzi. 

The risk isn't that "something" breaks, the risk is that all things break, at the same time.