Every Asset That Depends on Cheap, Abundant Credit (Housing, Bonds, Stocks) Is Doomed

Four words: financialization, debtocracy, diminishing returns. The entire global economy, developed and developing nations alike, is now dependent on cheap, abundant credit for everything: for "growth," for asset inflation, and ultimately for central state deficit spending, which props up all the cartels, rentier arrangements, fiefdoms and armies of toadies, lackeys, apparatchiks and embezzlers that suck off the Status Quo.

I have long endeavored to explain the harsh reality of neofeudal, neocolonial financialization: Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012) and the neofeudal debtocracy that depends on low yields (interest rates) to enable enormous deficit spending: Why Krugman and the Keynesians Are Lackeys for the Neofeudal Debtocracy (April 24, 2013).

The wheels fall off the entire financialized debtocracy wagon once yields rise.There's nothing mysterious about this:

1. As interest rates/yields rise, all the existing bonds paying next to nothing plummet in market value

2. As mortgage rates rise, there's nobody left who can afford Housing Bubble 2.0 prices, so home prices fall off a cliff

3. Once you can get 5+% yield on cash again, few people are willing to risk capital in the equities markets in the hopes that they can earn more than 5% yield before the next crash wipes out 40% of their equity

4. As asset classes decline, lenders are wary of loaning money against these assets; if the collateral for the loan (real estate, bonds, stocks, etc.) are in a waterfall decline, no sane lender will risk capital on a bet that the collateral will be sufficient to cover losses should the borrower default.

Let's take a look at four charts about housing and household net worth. ------->>>

The Magic Money Printer: The Solution To All Of Life's Problems

The Fed has one, the ECB has one, the BOE, BOJ, SNB also have one. Even Zimbabwe has one. And anyone close to them is filthy rich and has nothing to worry about, ever again.

So it is only fair the "Magic Money Printing Machines" which are now the bedrock of the "developed" world's economies, should be made available to everyone. And at a price of just $4.79, soon everyone can be a self-made (literally) trillionaire, and live in filthy Keynesian opulence until the end of time. Read more >>

Marc Faber: Obama's Job Package 'a Complete Joke'

Image by twid via FlickrThe package is “another complete failure of Keynesian economics and corrupt interventions,” Faber told CNBC.com on Friday morning.

Other economists have welcomed the plan as it attempts to boost employment.

Faber's major problem is that governments around the world should be attempting to cut spending, not spend more.

“This all amid talk of deficit reductions,” said Faber. The package is a “complete joke.” More...