[The Inevitable Crisis] Ronald-Peter Stoeferle - This Is Why The Situation With The Fed Is Scary As Hell!

[The End Is Near]

This long-term chart of US policy rates reveals that rate hikes have always been followed by recessions and financial crises. Low interest rates are a trap, as people and governments engage in low marginal-return projects that cannot survive rate hikes (see chart below).



This time around talks of a rate increase could trigger the next crisis.

We are convinced the FED would not stand by if the market fell another 15%-20%! Intervention via communication or more easing if necessary would definitely be the result of a further declines in equity prices. In this case Fed-fund rates will drop like a stone.

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Posted By The End Is Near to The Inevitable Crisis at 12/17/2015 10:09:00 PM

[The End Is Near]

A glance at the market capitalization of gold mining companies shows a similar valuation discrepancy. Currently, the Gold Bugs Index, which includes the 16 largest unhedged gold producers, is valued at a mere USD 55 billion. Compared to the S&P 500, this market capitalization is tiny, amounting to 0.3% of the index. The market capitalization of Microsoft alone is more than 6 times higher than that of all components of the Gold Bugs Index combined (see chart below).



A glance at the market capitalization of gold mining companies shows a similar valuation discrepancy. Currently, the Gold Bugs Index, which includes the 16 largest unhedged gold producers, is valued at a mere $55 billion. Compared to the S&P 500, this market capitalization is tiny, amounting to 0.3% of the index. The market capitalization of Microsoft alone is more than 6 times higher than that of all components of the Gold Bugs Index combined.

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Posted By The End Is Near to The Inevitable Crisis at 12/17/2015 10:10:00 PM

[The End Is Near]

Posted By The End Is Near to The Inevitable Crisis at 12/17/2015 10:11:00 PM