Investors seeking high interest have moved in the past decade to Corporate Bonds. CORPORATIONS driven by cheap money have acquired enormous debt largely to buy their own stock back and artificially run prices from 16 x earnings up to 32 x earnings – which Fed Chairwoman are saying is dangerous and too high.

Meanwhile quietly the market makers ( banks ) don’t want to hold bonds in this volume. Why? The bonds are hostage to:

  • Inflation – where their real returns lower
  • Illiquidity – no one can bet out of them ( 2015 )
  • A bond crash destroys value
  • New laws make the banks have to hold more cash to hold more bonds

Today the 10 Trillion in Corporate Bonds is having a hard time. Everyone wants to sell. No one wants to buy. So the bond market is soft and that is saying it lightly. What happens in the coming SUPER CRASH. The bond market liquidity will freeze and then lock up.

All over the EU in December the markets are saying there is no buyer – we try and sell a bond and there is no buyer on the other side of the transaction. What is that telling you folks and this is way before the panic sets in and the runs begin. This musical chairs market pays those who get out early and those who delay freeze up their pay as it was too late already YESTERDAY to get OUT.

Obscure clauses will allow bond holders to say no to redemptions and just sit on bonds. There will be no choice. Market liquidity is freezing up. It may well be the Bond Markets at 10 Trillion are the seeds for the Super Crash to commence the great depression.  The value of bonds is sinking in these good times. Right now. There is shrinking liquidity and shrinking values as an offset.  EU growth has substantially slowed in this quarter after massive unheard of EU QUANTITIVE EASING a phrase our former Fed Chairman pulled out of his ass for making free money liquidity for distressed markets. Even fire hoses of money have not stimulated the market to react as planned. Central planners have no tools for the developing deflation. They have utterly failed to witness inflation versus deflationary markets. Failed policy is rewarded with massive destruction of financial values as a consequence of force effected by economic powers. Power vs Force. Power always wins – which is the real market that can not be fooled by manipulation. China is letting its currency sink into never ending trade war pricing to currency of other nations. Other nations are raising interests to offset the trade war. None of this will work on either side. Trade war is the last step in the competitive capitalistic cycle before super crash and world war. Long predicted on these blog reports. As a repeat of five thousand years of financial history now repeating in 2016.

The market distortions and unintended consequences of failed Fed monetary policy globally have reached a tipping point. The future looks like:

  • A dow Super Crash to 6500 Dow levels and 20 years to recover from deflation without war so there will be war
  • A real estate slaughter worse than any we have known – prices higher than market buyers can afford slaughters liquidity and home values
  • A bond crash the like of which the world has never seen or known – in which liquidity already now extremely stressed will evaporate

Today the powers are discussing the unthinkable. WHO IS THE BANK OF LAST RESORT IN THE 10 TRILLION DOLLAR GLOBAL BOND MARKET? Answer – there is none. Not any. So when this market goes south completely the market will freeze and lock up. Corporate growth will then be impossible. Corporations with debt needs to grow will have to shrink adding fuel to the cycle and the coming SUPER CRASH and Global Great Depression world wide. China will be wiped out completely. Civil wars will ensure in China. Russia will have a revolution. The EU will break apart complete. South America will war with one another as will Africa. The USA will remain the best but will suffer enormously it won’t be fun or easy.

Is it avoidable – yes.

Is anyone doing the avoiding work – no.

Why? Greed .

Can this be fixed?

Doubtful. The political will is lacking and the financial lobbies dominate legislation required to fix it.

Why do we not develop a system that precludes this type of insanity economically? Because law makers are largely attorney and legally trained brains and lack the economic understanding of larger financial modeling to appropriately understand digest and pass holistic financial legislation.

What do individuals do? You read Kevin Freeman’s Game Plan.

You invest in diversified insurance investment offerings guaranteed with high returns and principle safety.

You move into RISK OFF and get out of all bonds funds – equities – and in my view hard assets. Own some silver and gold coins for temporary liquidity and have enough food and water for a month.

Folks if you can’t see whats coming you need to surround yourself with some one who does.

The Chairwoman of the Federal Reserve Board said today – I don’t see any bubbles forming”. As an investment banker economist I say to her with all respect SHAME ON YOU madame. You know better. Your Fed is a failed institution and needs to be MERGED into the UNITED STATES TREASURY as a model for all nations. Fed policy making and charing interest to nations to print their money is an antique notion that is too costly, does not work, and needs to be retired. Its time has come and its failed policy causes all the pain in the world. The Fed is the source of the problem not the solution.


Berny Dohrmann



PS: If your a bond holder your last chance to get out clean is this year – this minute even.