US HOUSEHOLD DEBTS UP BY 132% SINCE 2000 AND THE ITALIAN PROBLEM FOR THE EU
US HOUSEHOLD DEBTS UP BY 132% SINCE 2000 AND THE ITALIAN PROBLEM FOR THE EU
Sometimes I
wonder how they got their numbers, here they mentioned Student loans are at $1,41
trillion, but indeed the number is much higher at $1,536 trillion and the
overall personal debt is at 18,954 trillion, and this number is up by 132% ever
since 2000. However both numbers show that the peak is already reached and the
days are numbered until it will collapse.
However if
it comes to that day, the house of cards will collapse and with it everything
else will start to struggle following the domino effect. Due to the nature of
the panic mode. And this time we do have a lot more severe bubbles all around
the world that are to burst soon. Contrarian to there times in 2008. But as
long as nobody knows the time when it comes to that reaction, stay in stocks,
even thought volatility will return, (driving equities up and down) but make
sure your positions are defended. Furthermore buy gold and other precious
metals and Bitcoins or other crypto currencies, even though the time is tough
in crypto currencies. If it comes to that effect mentioned above, stocks will
collapse, that´s why you need a protection shield always, gold will jump on
this news, no matter what central banks will do. Immediately investors will
flee other assets and search for a safe haven and this is surely no bond. Bear
in mind that state debts mostly doubled or even tripled ever since 2008. (The
US is up from $9,7 trillion to $21,5 trillion and more important the US Debt/GDP
ratio is up by more than 100% ever since) So expect bonds to collapse as well. Just watch what
happened to Italian bonds within the past 4 weeks. Investors, mostly central
banks, flee Italian bonds (following the
still unclear political direction in Italy) and move their money into German
bonds, driving it much higher and forcing yields to return to their lowest
levels of the year. So stay off bonds no
matter what others will tell you. And Italy has not only a target2 problem and
owes other EU banks €400 billion, it also face the still unsolved problem of €350
trillion in bad loans which is 18% of the Italian GDP in Italian banks. Indeed Italy
became the biggest risk to the EU and its risk to fail is even bigger than Greece.
And yet
another tremendous problem looms coming from higher oil prices and a strengthen
in the US Dollar, leaving several Emerging Market countries such the likes of
Argentina, Brazil, Venezuela, Turkey and newly South Africa in real big trouble.
Mostly Emerging Market bonds are issued in US Dollars, instead of the
countries own currencies due to higher trust in US Dollars. Now
ever since the Dollar strengthened those credits became more expensive for
those nations because all repayments must be made in Dollars only. And the
higher oil prices will have an direct impact on those economies as well and eventually
shrink those economies. And there is something the market hasn´t done within the past 3 years. The spread between WTI (West Texas Intermediate) and Brent (Northsee Oil) widen to $12 now. This is usually to be followed by higher prices in oil. So the next trouble is already on the horizon and it´s
just a matter of time when it comes to the next crisis.
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