Dateline: Dallas, United States
I checked into the KLM Club at DFW Airport to summarize some thoughts from this past weekend.
After spending the weekend with some great thought leaders in liberty at the Liberty Mastermind Symposium this weekend, I decided to voluntarily get bumped off of my scheduled flight out of town. It seems everyone is rushing to get somewhere to celebrate The Land of the Free this July 4th, and they oversold my flight.
While I’ve jeopardized my previously assigned first class seat, the game of getting vouchers in exchange for taking a later flight is one the airline geek in me can’t resist. For $500, I’m happy to hang out drinking nice wine and snacks with all of the international flyers at DFW for several hours.
I was fortunate enough to meet with John Rubino from Dollar Collapse at this weekend’s event. I recently interviewed John on my radio show about all of the toxic economic policies being pushed by central banksters all around the world, but his view is potentially much worse than just a world awash in easy money.
John said that of all the negativity on the horizon, there’s one thing you should be watching out for above all else: interest rates.
The interest rate game going on in the world could well be the catastrophic economic nightmare that makes the tech and credit bubbles look like a picnic.
Emerging market stocks have gotten their share of a beating lately. While that doesn’t diminish my interest in living or doing business in emerging economies, it does mean you have to be especially careful about your investments.
And it only underscores how the whole financial mess is worse than what we’ve seen before. Trusting your money to Wall Street is out of vogue.
As John told me, the economic policymakers are “playing with fire”. Government and money bureaucrats have bought into their own BS that their theft and deceit has gotten more sophisticated over time. They believe they’ve honed their tactics so well that they’re invincible. They don’t want to admit they can’t maintain a world with stable currencies, growth, and low interest rates.
This is how arrogant the sociopaths running your economy are. They believe they could force the rules of economics to bend to their very well. Their massive egos let them believe they can do anything they want without consequences.
Or they’re so power hungry they just don’t care. It’s finally coming back to haunt them. Surprise, surprise.
Today, risk-averse investors are getting the shaft even in “safe” assets like Treasuries. Investors looking for stability have chosen Treasuries for years to protect their money, but the jig may finally be up. John says that a haircut of nearly half may be painful for the institutions invested in Treasuries and those who depend on them, but that it pales in comparison to the global growth hit that would follow.
As US interest rates rise, so will those in the world. Can you say “and they all fell down”?
Real estate will get more expensive. New projects will slow down or even come to a halt. Stocks will dip in value as bond yields go up. It’s a domino effect that could play out as the nightmare we’ve all feared the central bankers would deliver us on a silver platter.
Jim Rogers agrees. He recently discussed how at no other time in our history have banks fought each other to torch their currencies, jockeying for first place in the race to the bottom.
Of course, this is welcomed in the socialist utopias of the world where people want Big Government to pay for their every need. What do they care if fraudulent policies punish hard workers with savings or those with pensions? If it all collapsed, they’d be just as happy to collect a government check in jelly beans as long as the state will prop them up.
Governments and bankers can keep churning out QE money to keep the failing policies going. They can keep shuffling the deck chairs on the Titanic trying to put a Band-Aid on their illogical policies.
However, just like in craps, every roll of the dice means it’s more likely you’ll roll a seven. And then it’s really game over.