We Are In A Financial Bubble

We Are In A Financial Bubble

We are living in a financial bubble that is about to pop. The largest Financial bubble is the one inhabited by people who complacently believe in that the world of 2019 is about to replace the nightmare of 2020 and we can all go back to our carefree debt-funded consumption frenzy and illusions of ever-greater wealth forever and ever. The greater one’s sense of security, the more durable the bubble. Those in those who have reaped virtually all the gains in income and wealth of the past 20 years live in a bubble that they view as unbreakable: no matter what problems arise, their personal income and wealth is secured by the government, central bank, etc. Any dip in stocks, bonds, real estate, etc. will be instantly bought because the Federal Reserve will print another couple trillion dollars and funnel it into risk assets, as it has done for the past 20 years.

All this needless complexity will be jettisoned once printing/borrowing trillions become the problem rather than the solution. Ownership of assets will be crushed by asset deflation as insolvency can no longer be papered over by liquidity. We cannot print wealth, or borrow it into existence. All we print/borrow is artifice, phantom representations of illusory “wealth” that will vanish into thin air, in a reverse of how the “money” was created–out of thin air.  What’s real is the tide of financialization and globalization reversed over a year ago. The tide is now running out, but few loading their “wealth” into lifeboats have noticed–yet. 

(portions copied from an article written by talkmarkets.com)