I DISAGREE WITH JAMIE DIAMOND ON SHADOW BANKING !
I am between planes to Ohio in New York City.
There is so much in the news that obscure data is not magnified to its just importance.
The first is the WORLD BANK admonishment of China for its out of control lending. The risk to the world order from China massive debt remains an item we track. We join the new President of the WORLD BANK noting THERE IS JUST TOO MUCH DEBT OUT THERE.
Which brings us to everyone weighing in on Shadow Banking. No firm statistics are available for the scope and scale rise of Shadow banking. There is presently 66 trillion of Sovereign Nation Debt – up 100% since 2008 at 33 Trillion – and we suggested this alone was yet another fatal system risk.
Why? Because regulations are depression era related to a paper market that no longer exists at all. the economy today is all digital leverage and fully AI controlled. A G 100 new regulatory frame work is required when all the trades are in the cloud and all the laws are limited and local and obsolete to AI economics. Moderation of the system killer events:
- Debt Super Bubbles
- Consolidation of wealth – 1.5 super money pools 2007 to today at less than 10,000 and falling fast
- Speculation – where the vast percentage of circulations of 440 trillion in capital flows into side bets of non economic value – on which WAY any asset class may go at future time frames – up or down. Such speculation or casino capitalism in the past – has always resulted in SUPER CRASH.
Today we learn that what they can report in 2019 is 56 TRILLION DOLLARS now scaling up in shadow non regulated lending. This includes auto loan segments – student loan segments and real estate not funded by regulated banks and business and consumer lending with checks and regulations. This largely secret and unregulated area is a risk to the system long term. No one as yet is tackling this threat.
Finally we have oil. It appears central banks will hold pat – our choice – not lowering not raising interest. We think that is the stability right posture. We also think the FED needs to stop its bond selling rapdily and hold.
Oil is the wild car on its MBS manipulated higher price this year. As we suggested oil took a TUMBLE THIS WEEK – making this blog RIGHT YET AGAIN in the face of experts telling the markets otherwise. They were wrong this blog was correct. Oil has been dropping due to enormous ramp of USA output – now 12.2 million barrels each day and adding 7 million barrels to our stock piles – reserves we no longer require.
This blog noted it is time for TRUMP TO DUMP scroll and read that blog. DRUMP straregic oil reserves to correct market prices to 45.00 to 55.00 level – the right price for market pricing versus criminal cartel pricing on us all. The TRUMP DUMPS decision assures that inflation is gone and that the GREAT PAUSE by central banks can remain into 2020.
With Nancy Pelosi led infrastructure legislation passing the USA will drive world growth into 2030 without let up and possibly without recession.
The wild card are the items we have raised for smart planners to think on related to markets. Our suggestion readers explore diversified safe haven insurance investing is the exploration we believe licensed insurance investment professionals can confirm may be a safer track going into the end of the longest expansion ever recorded in our lifetime.
Berny Dohrmann – WHAT “IS” GOING ON OUT THERE IS RAPID ACROSS ECONOMIC AND POLITICAL LANDSCAPES
Jamie Diamond suggests shadow banking is not a threat to the core system yet. I disagree as a peer. I think the risk is immediate on going and soaring without any abatement or check. YET !
PS: May’s milestone of a June delay date is HISTORIC and beyond a standing ovation over very challenging diverse views.