A Hard Rain Is Gonna Fall

I wouldn’t blame you if the word “economics” makes you yawn.

But this is worth paying attention to if you work or have any kind of investments.

The world is changing.

There has been a seismic shift in thinking among global investors when it comes to sovereign debt and it’s not about what you’re reading in the business press.

Seismic shifts always get my attention. I’ll spare you the details for now. It comes down to this: Interest rates are going up and it’s not because of the Fed. The market is causing them to rise. This means the Fed is losing control. Here’s the important part:

But there is more on the minds of global bond investors than big quarterly Treasury refundings in the U.S. There is a growing concern that the extreme levels of wealth and income inequality here and abroad are creating a permanent, rather than temporary, rate of tepid economic growth worldwide. This translates into a future where governments are forced to issue ever more debt to plow into fiscal spending to prevent their economies from lapsing into deflation and, potentially, a depression.

OK, we can see that.  Here’s what it means:
Low growth = NO JOBS.
NO JOBS = Baltimore & Ferguson.
Baltimore and Ferguson means…

They know this in the District of Criminals. The only way they know to slow it down is to borrow more and spend more. Here’s where this comes into you calculations:

… The big selloff in sovereign debt is telling us that global investors see major economies mired in the hangover of the 2008 crash indefinitely with deficit spending on infrastructure soon to replace Quantitative Easing (QE) as the new monetary tool to ward off deflation.

See, they basically STOLE all the money they’ve already spent. Now push is coming to shove, so they’re probably going to actually try to do something to create jobs this time, instead of just stuffing the cash into the banks and their own pockets..

At least this has the potential to actually create some jobs, unlike the previous smoke and mirrors bail out exercises for the big banks.

But it’s too little too late for the middle class.


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