Is Helicopter Money, Nirp and Collateral Guarantees in Our Future?

By: Gordon Long & John Rubino | Sun, Oct 18, 2015
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Published 10-17-15
30 Minute Video

John Rubino and Gordon T Long discuss the strong possibility of of a sequence of "QE4 for the People", Helicopter Money, NIRP and Collateral Guarantees now being in our economic future as the US and Global Economies rapidly slow. The evidence is clear for all to see, with little debate, except in the hallowed halls of the US Federal Reserve!

Gordon T Long argues that there are three cycles that must be closely monitored. Of the three, the Credit Cycle always leads and it has now turned. He believes the evidence shows that the Business Cycle has also turned and that the Rate Cycle has been disconnected from reality since it skipped a "Cyclical Beat" due to Central Bank Monetary Malpractice.

John Rubino agrees but believes no on should be surprised that the Business Cycle has turned and a recession is a real possibility after experiencing over 6 years of an apparent cyclical recovery. What is particularly ominous and unique about this slowdown he feels is that it is arriving during a period when we have:

1- HISTORIC LOW INTEREST RATES: Little conventional Monetary Policy available to be a counter force mounting recessionary momentum.

2-CHINA SLOWING DRAMATICALLY: China's massive build out and credit expansion since the 2008 Financial Crisis has powered Emerging & Frontier Economies. Now the Chinese economic engine is sputtering and by some measures is not growing at all,

2- A GLOBAL COMMODITY CRASH: We are in the midst of a major global commodity crash which is impacting corporate earnings, sovereign current accounts and employment,

3- GROWING WAGE PRESSURES IN THE US: Years of corporate profit increases without wage increases has left many corporations under fire and earnings pressures, most evidently seen with labor issues at WalMart,

4- REGIONAL PROBLEMS IN CHINA, JAPAN AND THE EU: Leaving no economy bright light for reversing the US Economic Slowdown.

"How do you have an equity bull market and a recovery in economic growth in general at a time when the main engine for growth (China) is sputtering and corporate profits (in the US in particular) are starting to turn down HARD? The answer is you don't! You can't grow under those circumstances."


Canary in The Coal Mine

The dramatic collapse in HY (High Yield) Bonds is signaling serious problems for the continuation of cheap corporate funding. It also has the potential for contagion as liquidity is a problem when large amounts have been bid up on price due to the explosion is the use of ETF's to buy HY bonds.


Bottom Line

As the UK Guardian newspaper recently declared:

"The world needs inventive responses. It needs a bigger reinvigorated IMF whose constitution should reflect the global balance of economy power and that can rescue the emerging markets. It needs western governments to launch massive economic stimulus centered on infrastructure spending. It needs new smart money policies that will allow negative interest rates."

This is exactly what is going to sell political in the coming year!

The bottom line is the central bankers of the world are now left with few choices and none are traditional approaches and the political pressures on them have almost preordained the policies of: "QE4 for the People", Helicopter Money, NIRP and Collateral Guarantees to keep markets levitated.

"There is no political alternative but to 'double down' on existing policy approaches. The only alternative is austerity and we witnessed in one country after another in the EU what happens when this is attempted! ..... the only thing that will sell now is 'we are going to give you something'!"

.... there is much, much more in this 30 minute video discussion.

 


 

Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

Copyright © 2010-2017 Gordon T. Long

John Rubino

Author: John Rubino

John Rubino
DollarCollapse.com

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners in the Green Tech Boom, The Collapse of the Dollar and How to Profit From It, and How to Profit from the Coming Real Estate Bust. After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a currency trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He now writes for CFA Magazine.

Copyright © 2006-2017 John Rubino

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