What Will Happen To The Precious Metals When this Bubble Pops?

As the Mainstream financial media continues to promote the biggest market bubble in history, only a small fraction of investors are prepared for the disaster when it finally POPS. The markets are so insane today, it seems as if fundamentals don’t matter any more. However, they actually do if we look at the numbers closely. In order to invest in the correct assets going forward, one must choose between those with a low RISK and high REWARD versus assets with a high RISK and low REWARD. While this may seem like common sense, I can assure you, the market makes […]

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House Of Cards: Netflix Is One Of The Poster Children For Tech Bubble 2.0

How can a company that is going to generate $ 2,000,000,000 in negative free cash flow in 2017 be worth 70 billion dollars?  Netflix has soared in popularity in recent years, but so have their financial losses.  Just like during the original tech bubble, investors are ignoring basic fundamentals and are greatly rewarding firms that are bleeding giant mountains of cash year after year just because they are trendy “tech companies”.  But somewhere along the line you actually have to quit losing money if you are going to survive.  Just ask tech bubble 1.0 victims Pets.com, Webvan and Etoys.com.  The […]

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U.S. Auto Sales Plunge Dramatically As The Consumer Debt Bubble Continues To Collapse

One sector of the economy that is acting as if we were already in the middle of a horrible recession is the auto industry.  We just got sales figures for the month of April, and every single major U.S. auto manufacturer missed their sales projections.  And compared to one year ago, sales were way down across the entire industry.  When you add this latest news to all of the other signals that the U.S. economy is slowly down substantially, a very disturbing picture begins to emerge.  Either the U.S. economy is steamrolling toward a major slowdown, or this is one […]

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India Voids Bank Notes; Is the U.S. Bond Bubble Popping?

Donald Trump promises to “Make America Great Again.” Whether he can do it remains to be seen, but the Federal Reserve Note “dollar” is certainly responding to his victory. Traders began swapping bonds for dollars the morning after the U.S. elections and they haven’t stopped yet. The DXY index topped 101 on Friday – its highest level since early 2003. Beleaguered precious metals bulls are feeling the side effects. The surge in the dollar coincides with the retracement of a portion of the year’s price gains in gold and silver – although gold is still up close to 13% and […]

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Bond Bubble Bust

Rarely do we investors get a market that we know is overvalued and that approaches such clearly defined limits as the bond market now. That is because there is a limit as to how negative bond yields can go. Their expected returns relative to their risks are especially bad. If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discount rate used to calculate the present value of their future cash flows. That is […]

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China’s Orgasmic Real Estate Bubble

No question about it. China definitely takes the cake when it comes to bubble creation. The government encouraged everyday people to speculate in stocks in late 2014 and 2015 to help offset the slowdown in its gargantuan real estate bubble. The stock market bubbled 160% in one year and then crashed 50% (and you can be sure there’ll be more losses to come after a year of propping up a market that has merely gone sideways…) Then to cushion that 2015 stock crash, the government made loans easier for real estate again. Bank loans surged by 7.5 trillion renminbi (RMB) […]

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Global Bond Bubble Threatens Cash Holders

As big as previous real estate and stock market bubbles have been, the current global bubble in government debt dwarfs them all. Not only is it far bigger in size and scope (some $ 60 trillion in sovereign bonds now trade globally); it is also unprecedented in character. The world has rarely seen a bond bull market that is not only 36 years old, but also shows few signs of ending. And never before in recorded history have interest rates gotten so low across the board. How much lower can interest rates go? Conventional wisdom once held that rates could […]

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The Bubble Burst You Didn’t See Coming

I keep saying that in the next great crash, everything will get swept up in the onslaught – with virtually no exceptions. And that goes too for what we eat! The 30-Year Commodity Cycle peaked in mid-2008 and has been the first major bubble to crash and burn. The CRB (Commodity) Index has been down as low as 67%, with the potential for 74% or lower in the next few years. Among individual commodities, oil has been down as much as 82% in early 2016. It looks set to revisit its late 2011 low – $ 18, or down 88%. […]

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The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

Do you remember the subprime mortgage meltdown from the last financial crisis?  Well, this time around we are facing a subprime auto loan meltdown.  In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances.  Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way.  Delinquency rates are up by double digit percentages, and major auto lenders are bracing […]

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The Global Real Estate Bubble Is OFFICIALY Bursting

It’s official. The global real estate bubble is bursting. After imposing a hefty 26% tax on foreign buyers, and a 12% to 16% surcharge for buyers who flipped their house between one and two years, Singapore real estate has declined 21.5%. Vancouver has taken similar measures, and – surprise, surprise – its real estate is down 24% in just five months! That’s what I mean when I say that when bubbles burst, they do so dramatically and rapidly. But this is likely just the beginning… I put Singapore into razor-sharp focus in February of last year when I noted it […]

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