Saturday , 17 February 2018


Central Banks Are Going to Have to “Pull the Plug” on Stocks – Here’s Why

It’s no secret that Central Banks have been funneling liquidity bothinflation directly and indirectly into stocks. However, what most investors don’t realize is that this liquidity pump is about to end because the endless streams of liquidity have unleashed inflation.

The original article by Graham Summers has been edited here for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read.

Take a look at what is happening in the bond markets which trade based on inflation in the real world. When inflation rises, bond yields rise and right now, sovereign bond yields are rising around the world.

  • The yield on the US 10-Year Treasury has broken its 20-year downtrend.

GPC11818

  • The yield on 10-Year German Bunds has also broken its downtrend.

GPC118182

  • Even Japan’s sovereign bonds are coming into the “inflationary” crosshairs with yields on the 10-Year Japanese Government Bond just beginning to break about their long-term downtrend.

GPC118183

…Central Banks cannot, and will not, risk blowing up this debt bomb. [Instead,] they are going to choose between…

  1. either pulling the plug on liquidity and letting stocks go
  2. OR letting the bond bubble blow up, destabilizing the entire financial system and rendering most governments insolvent [and]

Central Banks are going to opt for #1 every single time. Period.

Scroll to very bottom of page & add your comments on this article. We want to share what you have to say!

Related Articles From the munKNEE Vault:

1. These 3 Charts SCREAM “Inflation” In 2018

The 3 charts below of the financial system strongly suggest that we are in for an inflationary shock in 2018 that is going to ignite a HUGE rally in commodities and other inflation hedges.

2. Get Prepared: The World Is Careening Towards An Inflationary Shock

The world is careening towards an inflationary shock. As was the case with the beginning of the Housing Crash, few are noticing what’s happening and even fewer realize the true scale of what’s about to take place.

3. Prepare Your Portfolio From Coming Interest Rate Rises & Global Debt Bubble Collapse – Here’s How

Savers and investors alike need to begin to prepare their portfolios for interest rate rises against a backdrop of crisis-triggering debt levels and unproductive economies. Here’s how.

4.  BIG Inflation Is Coming & Smart Investors Will Use It To Generate Fortunes – Are You Ready?

BIG INFLATION is THE BIG MONEY trend today and smart investors will use it to generate literal fortunes – and if you’re not already taking steps to prepare for this, it’s time to get a move on.

5. Inflation: What Is It? What Causes It? What Constitutes It? Why Worry About It?

General increases in prices, which follow increases in money supply, is an indication — as it were — that the erosion of peoples’ purchasing power has taken place…It is not the symptoms of a disease, but the disease itself, that causes the physical damage.

6. Inflation Shouldn’t Be Feared – Here’s Why

A growing chorus of forecasters see inflation pressures emerging. Even if that’s true, it should be welcomed – not feared. Here’s why.

7. Inflation: What Is It? What Isn’t? Who’s Responsible For It?

Inflation is the debasement of money by the government. PERIOD. It is NOT a general increase in the level of prices for goods and services. These statements are critical to an understanding and correct interpretation of events which are happening today – or expected to happen – that are casually attributable to inflation. Let’s go one step further as to what inflation is, what it isn’t and who’s responsible for it.

8. Inflation Coming Like An On-Rushing Train – Here’s What Investors Should Do Now

The green shoots of inflationary pressures are sprouting in our daily lives and, as such, NOW is the time investors should be actively seeking out sectors that can realize rising revenues and profits because of the wave of price increases in goods and services that will be passed on to businesses and consumers.

9. Inflation Expectations Likely To Continue – Here’s Why

After declaring inflation all but gone last summer, investors are now deciding that calling the time-of-death might have been a bit premature. Starting in September and accelerating post-election, 10-year inflation expectations, measured by 10-year Treasury Inflation Protected Securities (TIPS), are surging [and, as I see it there] are four reasons why I think the rebound in inflation and inflation expectations is likely to continue into 2017.

10. Trump’s Policies Could Explode Debt & Ramp Up Inflation – Here’s Why

In our view massive infrastructure spending may boost the economy temporarily but more spending means more debt and potentially more inflation and interest rate exposure.

11. How to Protect Your Portfolio From Inflation

Inflation lurks in the shadows. It destroys value by gradually eroding real returns over time. It is financial death by a thousand cuts. Investors too often look at “the numbers” in their portfolio without asking what those numbers can actually buy over time. It’s a classic mistake that John Maynard Keynes termed “money illusion.”

12. Now is the Time to Prepare for Coming Inflation

Don’t be afraid of inflation. It is already here and there is nothing we can do about it. The effects will soon be obvious to all. Just make sure you are among those who are protected and prepared to profit.

For all the latest – and best – financial articles sign up (in the top right corner) for your free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.

Leave a Reply

Your email address will not be published. Required fields are marked *