Bad Debt. The Debt bomb. The world has its eye on the media sound byte of the moment. I always follow THE MONEY.

The latest issue I’m sleep less over – is the bad debt mushroom cloud over two nuclear enemies far worse in historic war tension than Saudi and Iran – are Pakistan and India. The issues are many and include the following:

  1. They are lying about their growth. They are tanking like much of the world save for the USA and EU.
  2. Economically corrupt systems, lacking rule of law safe guards to financial market places – self implode on DEBT.
  3. Their nations economic welfare ( and therefore peace and civil well being ) is tied to outside the nation investment primary in the forms of loans.
  4. The central banks of these nations and the banks are all corrupt. They lend to their insider s and the loans go bad. 
  5. The GNP numbers of both nations are false and the market knows it and the bad debt issues are worse than anywhere else – their nation is built on debt like China and the COUNTER PARTY AGREEMENTS in todays digital diskless risk ( crazy space ) derivative weapons of super mass destruction – all a house of unregulated cards – is about to bumble down. China started the route with insider corruptions and failed policies which failure is getting worse not better – as I’ve lamented central banks are not the solution central banks ARE THE PROBLEM – they are failed policy and all need to be merged into national treasury and retied. Yesterday is already too late.
  6. Pakiston and India are about to have potential bank melt downs if and when the market learns of the DEBT BOMB bad loans their banks hold which makes all the banks and out of nation investors, bankrupt and losers.
  7. A run on the banks may trigger NUCLEAR WAR between the two nations – as their historic issues are settled once and for all – the entire world could be dragged into a world war as a consequence – because n one is paying attention. Read Kevin Freemans GAME PLAN to discover no nation has a game plan and you as an individual had better develop your own – which Kevin defines how to do.
  8. Hedge Funds have unmatched losses – greater than the 2008 crash.  new history and so fast – with illiquidity. There are more sellers than there are buyers. This is a full run on private equity and hedge fund capital, which means capital for growth and business is negative versus neutral and positive. The net result for banks is contagion. The super pools have to wither their bank deposits and withdraw their floats to pay the redemptions. This DEATH SPIRAL is under way and keeps me up at night.
  9. Failed Fed’s – all feds are dead – they cause all this – they profit from all this – they are sapping the wealth of all nations with failed policy leading to world war where they also profit. The way forward is to merge 100 year old antique obsolete Fed contracts with nations merging Fed process into national treasury – where there is transparency oversight and supervision – lacking wth independent feds – and we no longer pay interest to print money – which should be made a crime for unborn generations – by all legislatures. The Fed policy is now increasing the velocity o the world financial DEATH SPIRAL they are engineering to foster – world war. Which is always financial.
  10. Professional investors know all this and they are mechanically trading by software today. The entire market is driven by Artificial Intelligent Software or AI – without human steering. Using fantastic debt leverage and borrowing, via unregulated jurisdictions, using ever evolving AI software, super money pools are side betting on both sides of straddles , with risk protection via ETF and derivative contract pools – super pools – and matrix pools of the super pools – which have no historic risk data to measure the systemic risk when the following occur – sustained entrenched global deflation – overall commodity and general market crashes – liquidity reversals where selling out numbers buyers – and prices are crashing – which requires MASSIVE ASSET TO LIQUIDITY – DE-LEVEREGAGING – DRAW DOWN OF BANK DEPOSITS – INCREASING CALLS ON DEBT REPAYMENT – DEATH SPIRAL – equals a financial death spiral.

Thats what keeps ME up at night.

Then I ask – are we in it? Is this IT for real? Are we seeing the end of the world order as we know it? How fast can it unwind – 72 hours ? A week? A month? A quarter? How fast would it reach critical implosion mass? As there is no financial history like this – there are no real comparisons to this DEBT LOADING and CREDIT SUPER OF ALL BUBBLES – no one knows. Anyone who says they KNOW or have an inkling of how this plays out is an absolute idiot. Of course we elect THEM.

As a retied investment banker economist I DO KNOW THIS – none of my circle know how this will play out or over what time. We envision MISSING MECHANISM PROCESSES that can overlap a new world order to the old with minimum earth quakes to the system overall. Far more likely is a trend to accelerate the velocity of the rush from debt – every asset for themselves – one agains the other – musical chairs last to sit crashes and burns – everyone run for the hills at the top first but the bottom will follow.

I don’t know the options. I don’t know the outcome. I don’t know how long. I do know the DEBT BOMB is the final bubble and the world order one way or the other will be all shinny and new – on the other side of the SUPER CRASH.

We predicted all this in long published blogs – but it is uncanny to see it play out right on the screen play – as if the world read our blogs and followed them to the letter.

Because the accuracy is unmatched and it has become legendary now – without dong anything.

I just share what keeps “ME” up at night………

I hope yours is just a bit of cheese or a small indigestion – versus any nightmares like I keep having.

I’ll keep a light on for you.


Berny Dohrmann – On HEADWINDS