Re: Financial topics
Posted: Tue Dec 17, 2013 12:49 am
In the current instance the most important variable absent some black swan event like an earthquake is probably the yield curve on the US government debt. QE is no longer holding the tide back, as the 10 year yield has moved from 1.6% early this year to 3.0%. It could be that, absent the huge interventions in early 2009, late 2009 would have looked like 1343. Job losses were certainly mounting quickly in those first few months of 2009. The moratorium that occurred on debt payments post 1343 is a lot like suppression of the interest rate via QE, which is no longer working. I think we're very late in the game but the music has played longer than the 3 years it played between 1343 and 1346. The backstops have been greater and coordinated worldwide. But it also seems to me that interest rates could spike within even a matter of days and the collapse could occur "all at once" after an agonizingly slow "slowly at first". And I don't think that's a good thing.
Armstrong has been speaking of riots occurring in peripheral places around the globe as recently happened in Singapore and eventually spreading to the US. While he mentions 2014 as the beginning of the worldwide violence, I don't know that he expects the violence to hit the US in 2014. I would think it hits the US when the rate of interest gets to the point that the checks have to be cut substantially. There were some recent cuts to food stamps but probably nothing that would incite rioting yet. My guess, though, is that when the riots finally hit the US they could be worse here than anywhere else. Though as we know the French hold history's reputation of being the best rioters.
Armstrong has been speaking of riots occurring in peripheral places around the globe as recently happened in Singapore and eventually spreading to the US. While he mentions 2014 as the beginning of the worldwide violence, I don't know that he expects the violence to hit the US in 2014. I would think it hits the US when the rate of interest gets to the point that the checks have to be cut substantially. There were some recent cuts to food stamps but probably nothing that would incite rioting yet. My guess, though, is that when the riots finally hit the US they could be worse here than anywhere else. Though as we know the French hold history's reputation of being the best rioters.