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A World of Manipulated Markets

by John Rubino on February 23, 2014 · 8 comments

The following is excerpted from The Money Bubble, by James Turk and John Rubino “There are no markets anymore, just interventions.” — Chris Powell, Gold Anti-Trust Action Committee Once upon a time, a handful of countries sometimes described as “capitalist” claimed to operate on the principal that consenting adults should be free to buy, sell, […]

What Blows Up First? Part 4: China

by John Rubino on February 18, 2014 · 8 comments

To Westerners, China has always been a mystery. The huge population of very smart, hard-working people. The succession of unfamiliar, authoritarian governments. The sense that they’re playing the long game while we’re obsessed with quarterly reports – and that they’re laughing at our naiveté and lack of historical sense. We don’t get the Chinese, but […]

What Blows Up First? Part 3: Subprime Countries

by John Rubino on January 27, 2014 · 21 comments

One of the reasons the rich countries’ excessive money creation hasn’t ignited a generalized inflation is that today’s global economy is, well, global. When the Fed dumps trillions of dollars into the US banking system, that liquidity is free to flow wherever it wants. And in the past few years it has chosen to visit […]

1% Plus $15: The Math of Poetic Justice

by John Rubino on January 23, 2014 · 17 comments

Way back when, as a staff writer for a state business magazine, I used to do an annual feature on the state’s highest-paid executives. In compiling that list, I noticed that CEOs had come up with a very sweet scam: Their boards’ executive compensation committees would hire a consultant to figure out how to set […]

Deflation Shock Coming? Or QE Euphoria?

by John Rubino on January 9, 2014 · 20 comments

Taki Tsaklanos over at GoldSilverWorlds has reprinted a series of charts from Incrementum Lichtenstein that show a reversal in several big trends. Here are a couple of them, followed by some other supporting material. First, US banks have not only failed to return to their pre-2008 pace of lending, but the loan growth rate is […]

What Blows Up First? Part 2: Japan

by John Rubino on January 6, 2014 · 23 comments

Of all the crazy financial stories of the past year, Japan’s might be the craziest. To recap: For two decades, successive Japanese governments have fought the deflationary effects of bursting real estate and stock bubbles with ever-larger public works programs. These prevented the collapse of the country’s zombie banks and construction firms but didn’t produce […]

What Blows Up First? Part 1: Europe

by John Rubino on December 30, 2013 · 58 comments

2013 was a year in which lots of imbalances built up but none blew up. The US and Japan continued to monetize their debt, in the process cheapening the dollar and sending the yen to five-year lows versus the euro. China allowed its debt to soar with only the hint of a (quickly-addressed) credit crunch […]

Since at least the 1980s, US policy has been to convince us to borrow as much as possible on pretty much anything we could think of. This worked brilliantly until 2008, when homeowners, consumers and businesses hit a wall and private sector defaults began to exceed new loans. Another Great Depression was imminent. But instead […]

The main difference between well-run and badly-run countries is certainty. In well-run countries, money is worth pretty much the same from one year to the next, the police come when called and protect rather than prey on the caller, and contracts, including pensions and other retirement plans, behave as advertised. In badly-run countries, not so […]

The US equity markets are back in record territory, at least in nominal terms. The last two times they spiked this way, the following year was pretty brutal. See the next chart, which tracks the S&P 500 and margin debt, the amount of money investors are borrowing against their shares of stock to buy more […]


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