lowest rates in 5000 years & 12 Trillion in Wasted QE programs; all for nothing

lowest rates in 5000 years & 12 Trillion in Wasted QE programs; all for nothing

The figures are truly shocking and stunning, to say the least.  Central bankers World Wide have printed more than $12.3 trillion dollars.  Then we have over $10 trillion worth of bonds with negative yields; this is totally insane, people are paying for the luxury to purchase this toxic and worthless paper.  And what do we have to show for this; the answer is almost nothing.  The rich have become richer; the middle class has vanished at least in Europe and the US, and poor are getting obliterated.

Central bankers wanted to put the fear of God into the masses, and they have succeeded in doing so; the crowd is so scared that instead of investing this money in the markets, they continue to hide it under their mattresses. In doing so, they have lost an opportunity of a lifetime, but have no fear the Fed is pushing them to the limit so that finally out of pure desperation they will be propelled to embrace this market they despise so much.

Eight years and counting and you would think by now they would have surrendered these false beliefs as the Bears have been decapitated, and the naysayers are hiding in the woodwork.  Ignorance, like stupidity, knows no limits and demands company.

The main driving force behind this market is hot money; the Fed is fully aware that if they remove this supply of hot money, the stock market bull will drop dead the very next second. Hence, they will continue printing to infinity or until there is a major currency Meltdown. This bull market will hit a brick well one day, but by that time if you are a bear you would be bankrupt several times over or be ready to shoot yourself a dozen times in the Foot.  The Fed has ensured that hot money continues to flow into this market by keeping rates artificially low for an extended period.

Central bankers know that many will continue to remain wary when negative rates hit the US and even when banks start charging the masses fees for deposits. Individuals  continue hoarding money because they don’t know what the future holds. Eventually, when the pain becomes too intense, the masses will realise that the only option left is to speculate or fry.  They will jump out of the box and start to look desperately for investments that offer better rates of return.  The stock market is the best place for speculators looking for higher returns; it promises a lot but rarely delivers.   The idea here is to back the crowd into a corner like you would a rat in a small cage, finally, when it has nowhere to turn, it will lash out and strike, realising that its life is at stake. Whether it wins or not is irrelevant, the objective was to goad it into lashing out like a tiger.  If the central bankers are successful, they will have created one of the biggest stimulus programs in history, and the masses will be the ones funding it.

The game plan is to back the crowd into a corner like you would a rat in a small cage, finally, when it has nowhere to turn, it will lash out and strike, realising that its life is at stake. The objective was to goad it into lashing out like a tiger.  If the central bankers are successful, they will get the masses to fund the most speculative stage of this bull market. It will be the equivalent of several QE’s in one shot.  In other words, it will be like pouring jet fuel on a raging inferno.  The short-term reaction will be spectacular in nature and is that not how all bull markets end; with a glorious bang before the bull drops dead.  Be wary when the masses are Euphoric and Euphoric when they are wary, As they are wary right now, this bull will continue to run, and the Fed will continue to print money like a drug addict seeking a new fix.

Conclusion

Don’t fight the trend, for it’s your friend, everything else is your foe. Make sure you subscribe to our free newsletter to find out which side of the market you should be on.

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