Written: August 2020
We believe that the next crisis will be caused by extensive money creation by central banks. Since interest rates are so low that putting money in the bank costs you money. All this new extra money flows towards the stock markets and especially derrivates. Because of that they are all priced at an all time high or close to that.
Our current moto: “A 0% return is the best we can offer at the moment because the rest can only go down”
Offcourse there are always short term proffits to be made but that is not our aim. Still we will also take part from time to time and let you know on this website. But we are mainly on the sell side of our portfolio waiting for a better time to buy. Even than the next stockmarket crash can take anywhere from a few days to a few years and we are also impatient (we are not hollier than the pope). But this is a serous warning.
We have been trading long enough to know that what goes up must come down and eventually will. Patience, we will be there to pick it up again. We’re not sure when the global reset will happen, or what will be the trigger. We are absolutely sure the correction will happen and will bring a new stock market distribution. And it may even be that new and old currencies like bitcoin and gold will play an important role in the transition to a possible new world currency or redistribution of new world assets.
The 2008 financial crisis showed us that when we create too many obscure products eventually it will blow up in your face. And we believe this is happening again by derivatives. Too much money is pushed into unclear assets making room for greed and fraude. And in the end it will go bust.
Here’s a full list which sums up all of the world’s money and markets, from the smallest to the biggest, along with sources used:
| Category | Value ($ Billions, USD) | Source |
|---|---|---|
| Silver | $44 | World Silver Survey 2019 |
| Cryptocurrencies | $244 | CoinMarketCap |
| Global Military Spending | $1,782 | World Bank |
| U.S. Federal Deficit (FY 2020) | $3,800 | U.S. CBO (Projected, as of April 2020) |
| Coins & Bank Notes | $6,662 | BIS |
| Fed’s Balance Sheet | $7,037 | U.S. Federal Reserve |
| The World’s Billionaires | $8,000 | Forbes |
| Gold | $10,891 | World Gold Council (2020) |
| The Fortune 500 | $22,600 | Fortune 500 (2019 list) |
| Stock Markets | $89,475 | WFE (April 2020) |
| Narrow Money Supply | $35,183 | CIA Factbook |
| Broad Money Supply | $95,698 | CIA Factbook |
| Global Debt | $252,600 | IIF Debt Monitor |
| Global Real Estate | $280,600 | Savills Global Research (2018 est.) |
| Global Wealth | $360,603 | Credit Suisse |
| Derivatives (Market Value) | $11,600 | BIS (Dec 2019) |
| Derivatives (Notional Value) | $558,500 | BIS (Dec 2019) |
| Derivatives (Notional Value – High end) | $1,000,000 | Various sources (Unofficial) |
Derivatives top the list, estimated at $1 quadrillion or more in notional value according to a variety of unofficial sources.
From:”visualcapitalist.com”
Some facts:
- The I.O.I.F. for example states: a debt time bomb that could crash the global economy (almost $19 trillion dollars of debt is owed by companies that don’t earn enough to cover interest payments – From: I.o.I.F.
- Or according to the World Bank: Countries whose debt-to-GDP ratios are above 77% for long periods experience significant slowdowns in economic growth. Every percentage point above 77% knocks 1.7% off GDP, according to a study, (via Investopedia: The United States’ current debt-to-GDP ratio is 106.5%).
Conclusion: Read this as a fair warning. Above are examples of too much money having to find its way into the economy leading to excess. It is not a question “if” it will happen just a question of “when”. Could be years but we believe it will be sooner.
By the-wiseguy. Please check out the-wiseguy.com
