Network Financial Analyst Paul Spaydel, as usual, hit the alarm:
“Oh, and it’s going to blow soon. They try to deflate the hellish inflationary pressures by blowing bubbles wherever possible. Real estate prices are growing at a record pace, the capitalization of global markets on Friday confidently exceeded $ 100 trillion, and bubbles in cryptocurrencies caught the spirit of revenge from 2017-2018. De facto, this is an attempt to transpose "physical" inflation in the real world into "virtual" inflation in the financial world. The next step will be a partial conversion and this will be the beginning of the end of the current monetary configuration.
Over the past 100 years, nowhere and never has there been such a stunning insanity in the context of scale, speed and coordination - a complete separation from reality and a total dump of the head. Literally, in all seriousness, without any distortion. By the totality of factors, there has never been such a large-scale and rapid deviation from fundamental factors - neither in 1926-1929, nor in 1996-2000.
However, in addition to inflationary pressures and financial bubbles, there is another problem that is part of the first problem and its flip side. The scale of fiscal stimulus is unprecedented. The United States, Japan, the Eurozone, the United Kingdom, Canada, Australia, Denmark, Sweden and Switzerland together plan to increase the general government's public debt by at least $ 7.5 trillion.
Of these, at least 4 trillion in calendar 2020 will be in the United States, about 1.5 trillion in the Eurozone countries, $ 770-800 billion from Japan, 415-430 billion from the UK, 320 billion from Canada and 170 billion in Australia. The rest is about $ 75 billion.
As you can see, these are record incentives for all countries, significantly exceeding the peak periods of the 2008-2011 crisis .
Does anyone remember how painfully developed countries went through the debt transformation in 2010-2013 and how much effort was invested in fiscal consolidation and stabilization of the debt market? But we started from a relatively low base in 2007. Since then, indeed, the majority have reduced the rate of debt buildup, but I emphasize, they have reduced the rate, and not switched to the mode of deleveraging. Those. the situation is becoming more complicated every year. 2020 saw an unprecedented increase in debt, in a disposition that was already in a critical area for most countries.
In the mode of unlimited tranquilizers and narcotic delirium, when the "immortality" cheat was turned on, the situation seems calm and safe. An increase in debt by 7.5 trillion, and in 10 months they have already hammered into the market almost 9 trillion QE. In other words, all fiscal stimulus was funded out of thin air. Completely and more gifts for 20-25% on top, at least. They are convinced that the immortality cheat is endless, safe and completely legal. With which, in fact, they can be congratulated, but soon the time of the Great Troubles will come. The essence of which is that you can seem unprecedentedly cool when the rates are zero and there are trillions of gifts per month, and so on ad infinitum. Now let's think about what will happen if the banquet ends, the clowns disperse and the painful process of post-drug withdrawal begins? There is so much crazy and stupid money, and the people are so lazy and "broke" with endless, free and unlimited incentives that a breakthrough into the real world will inevitably happen - one way or another. And this will be the final and ultimatum strike and trigger to monetary transformation..."