In this week's Off The Cuff podcast, Chris and John Rubino discuss:
- When Will Rising Interest Rates Matter?
- We're close to the breaking point
- The Fed As Buyer Of Last Resort
- When the next recession hits, the Fed will directly buy bonds, stocks, etc
- Suddenly, Weakness Is Everywhere
- Italy, Argentina, Turkey, auto loans, student loans…
- Ecologically, We're Killing Ourselves
- Along with a tremendous number of other species
John returns this week to address this key question: When will the market crack? There are so many signs of instability suddenly in the markets — when will they matter? Pricies are hanging in there, but the inexorable grind higher of the past 7 years has stalled out in 2018. This could very well be the year that everything changes:
We cut interest rates to the point that it's economical for corporations to borrow that money and then use it to buy back stocks. Or we cut taxes on corporations, and they use that money that buy back their own stock. So, in effect, that is government buying equities, but it's just got a middleman here where as in Japan or Switzerland or a few other places it's just their equites governments or via their Central Banks buying stocks.
And, of course, that's going to push prices up. And, of course, it's going to make valuations irrelevant, but it's not a perpetual motion machine.
by thc0655