Money creation can not go on forever

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.

True Money Supply 2020

Chart from: “Wikipedia”

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:

CategoryValue ($ Billions, USD)Source
Silver$44World Silver Survey 2019
Cryptocurrencies$244CoinMarketCap
Global Military Spending$1,782World Bank
U.S. Federal Deficit (FY 2020)$3,800U.S. CBO (Projected, as of April 2020)
Coins & Bank Notes$6,662BIS
Fed’s Balance Sheet$7,037U.S. Federal Reserve
The World’s Billionaires$8,000Forbes
Gold$10,891World Gold Council (2020)
The Fortune 500$22,600Fortune 500 (2019 list)
Stock Markets$89,475WFE (April 2020)
Narrow Money Supply$35,183CIA Factbook
Broad Money Supply$95,698CIA Factbook
Global Debt$252,600IIF Debt Monitor
Global Real Estate$280,600Savills Global Research (2018 est.)
Global Wealth$360,603Credit Suisse
Derivatives (Market Value)$11,600BIS (Dec 2019)
Derivatives (Notional Value)$558,500BIS (Dec 2019)
Derivatives (Notional Value – High end)$1,000,000Various 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.

Over the Wiseguy

Stock trader, Owner and Administrator of "the-wiseguy.com". . . "TA is like surfing. You don't have to know a lot about het physics of tides to catch a good wave. You just have to be able to sense when it's happening and have the drive to act at the right time"

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