Thursday, October 13, 2016

Where Will The Money Go?

ZH: October 13, 2016
Where Will The Money Go After The Crash?"

The short answer is, what money?

The long answer is 'Cash' @ 0%

aka. Money markets and t-bills. Only there won't be that much money flowing in after the fact since 'discontinuous price discovery' will have evaporated most of the fake wealth limit down overnight. Today's asset prices are a wholesale illusion created by Central Bank drip liquidity programs and the marginal momentum gambler. When the stampede occurs asset prices will collapse like a cheap tent. There is nothing economically supporting today's bubbles aside from Ponzi borrowing. 

For those who don't remember 2008, here's a subtle reminder. By all accounts cash balances have room to move up a bit...

Rydex money market balances (black):



And the earnings yield for stocks is already at the precipice, waiting to plummet...



Those expecting 'monumental spikes in small asset classes' will be duly disappointed. Anything priced in dollars will go down. This would all be a lot more fun if we hadn't already seen this movie before precisely eight years ago when that last buffoon finished his two terms of obligatory lying.

Gamble at your own risk.