It is impossible to sell debt securities at virtually zero percent, when the obtaining market benchmark rate for debt is five percent.
Hence what we have going on all across the Western World right now is a fundamental illiquidity of mainstream capital.
And, certainly, that mainstream capital (paying mostly all zero percent coupons) is almost all entirely in the hands, not of private investment banks like it would have been in the past - but in the hands of government via their central banks.
In all the world, the place where I found the most obvious, casual and quite overt displays of real cash wealth among the people there - was Vienna.
Secondly, the basic and critical intrinsic reason no one is able to sell existing debt (IE not new lines at current rates or ahead of those - as will be necessary) is that governments insisted on forcing (borrowed money) capital investment into building projects and real estate (because these things are immobile and are easy to extract taxes from the 'owners' of) and stone does not produce anything, as the ancient Egyptian pharaohs eventually discovered.
Zero percent... Five percent. Zero percent. Five percent.
Well you will be soon enough looking at some percentage that it would not be advisable for me to say here right now.
And energy prices are going up.
So what happens next?
LOL
Not sure.
; )
'I - am - not - sure - that - I - can - say.'
I guess if you go down this doom-sayer thinking to what looks like its logical ending, you would have to think there is little or no point buying expensive wines - that is, 'investing' in them hoping to realize some kind of profit in the future.
But it is one thing to speculate about what a certain trajectory looks like from a present standpoint, and another thing to say that you know for sure nothing good ever happens from out of the blue.
Plenty of women still wear opera gloves there. In Vienna.
As our poet friend set down in verse in the immediate previous post comments section -, you could be suddenly blessed by a gift from some divine source.
That is indeed what the world needs right now.
It does not seem, on the surface of things that human mortal leaders are capable of discovering any new solutions to literally age-old problems.
But why will you be blessed?
You are certain to be blessed.
You.
Maybe not others but just you.
Coming here you have opened a door - entered as it were, through a portal.
To another place.
Where bits of broken ceramic are all put back together with gold... (The Japanese art of kintsugi).
Shall we invite some people around and offer them the best wine - to be drunk from some kintsugi?
So you're at this restaurant, see. With people who know you and think they know what kinds of things you can get up to.
It's the sort of affair that someone like John Brennan might attend: there's career local Navy guys in their fairly dry-cleaned and pressed whites...
It isn't like the old days when Commander Bond was an authentic reflection of many people in the Admiralty (of Great Britain).
Royal Tokaji wine. Last you easily two hundred years.
Today, Barbara Broccoli hasn't got it quite right - she says there is a credibility problem with 'old Bond' in the modern-day context. But there is no credibility problem with Bond; there is a credibility problem with the Empire.
'Here, John Brennan, you like to do transgressive things -. Here's something right down your alley."
Brennan: 'Who TF are you, pip-squeak.'
'Never mind that -, have this, casually vandalize this in three minutes.'
Hand him the small glass filled with its amber-golden thick liquid that definitely has a sulfurous scent.
Actually, preferably it isn't a glass, but a large glass spoon. That's the traditional way of having this thing.
You continue: 'It has taken fifteen years to have this ready for bottling, and this particular one has been in its bottle for a further fifty years. It takes a long long time to ferment and it hardly reaches 2.9% alcohol by volume even at the end.
'You can wreck this now in just two or three minutes.'
When you think about just how long it takes to turn out a very good Hungarian Tokaji (or Tokay), and you think how blithely one downs the thing until there is not even a single beading drop left inside a decent bottle, it certainly feels like sin doing it. I feel guilty about consuming, making something disappear, that took so long to make.
Very old fashioned style.
But there is a great secret here - Dionysus the god, himself caused humans to forget themselves and what they were doing in the moment; Jesus did the same thing when He 'gave out the wine.'
What goes cannot come back...
...they say.
But what would they know, John Brennan?
What would they really know?
Still, it still feels like an act of sinning to me.
Think of the years it took.
You can keep a bottle of Tokay for two hundred years (and people have done) and it is as perfect after that, or even better than, the day it was originally bottled.
Here we are, we humans, taking things that took so long to build, and consuming them in a moment.
Very old fashioned style.
This strange person told me, one time: 'Every mouthful that you take, think about what went into its making, and hope and pray that all of what it took becomes a part of you going forward.'
There's that phrase again. It's a 'Company-speak' phrase btw. Same as 'non trivial.'
Well, let me tell you - drinking the greatest wines in the world of all time is a non-trivial thing.
How do we go forward from here?
They say you cannot take things out with you when you go from here. That's not true. Because in any case, how would 'they' even know?
You need to find out what someone who has gone and come back says about it.
Going forward from here, take things from the past with you.
Nothing good ever just disappears forever.
Find out what 'all of you' is, what it means - and then take all of you into the future.
The word 'algorithm' today has the sense of some mathematical operator (symbol denoting a transformation) in a volumetric or let's say calculus equation.
However, its original source, and from which the word itself comes - namely from the 9th century Arabic Polymath al-Khawarizmi - is to do with finding ways to defraud gold and silver buyers by placing one's thumb down on the scales in a certain prescribed way that always effected the outcome favorably as long as you knew the mechanism of the balance system involved.
In other words, what it means - what its implication is - is how to cheat.
Nakedly, the general online worldwide media that falls under 'branded outlets' as such, declares that it selects the stories to publish as determined by 'algorithms.'
And usually these are so-called 'proprietary algorithms.'
The luxury wine experience.
But a thumb is a thumb is a thumb, and what it is actively and deliberately doing on one side of a balance scales is the opposite of 'telling the truth.'
The unfortunate thing about information versus lack of information, is that even if you could decode the thumb pressing, it would not thereby give you access to critical information because in fact, that was missing altogether in the first place.
All that happened was that a certain 'story' or a line of stories was overly-pushed, heavily marketed, in other words sold to the reader and the viewer - while any work that really is necessary to finding out information especially hard to get information, simply didn't happen at all.
In other words it would be one thing if on the other side of the scales there were actual news and new information available at all - but in fact there was nothing on the other side of the scales.
It takes work to find information that is hidden by politics or by special interests or by someone's guilt. Nobody in the modern kinds of large-scale media pays for that work.
Arguably, it is no wonder that French wine-makers insist on claiming there is some major importance to terroir, on account they cannot factually claim there is significance to actual grape varieties they take the names of and stick on their wines - because there are no such varieties any more; not since the Great Phylloxera Plague of the late 19th century there.
They are all, except maybe for the Bollinger Estates alone (which are in the Grande Champagne region) American root-stock grafted varietals.
A hundred years into the future...
Additionally, the massive overuse of pesticides and the industrial-scale continuous inserting of nitrogen, potassium, and phosphorus, means the grapes produced are anything but coming from something intrinsically unique or naturally spectacular to do with the soils, the climate, or the timing and craft of the harvesting and the purity of the fruit and of the agriculture involved.
Do these massively over-industrialized and super-high volume wines taste any good?
I'm sure I cannot say.
I mean for example, how do cognac producers expect not to have the pesticide residues negatively affect cognacs that are kept in casks or bottles for many many decades?
Are they extracting those traces by some technically clandestine or obscure scientific process using chemistry and machines during the wine-making phases?
Our 'friends' - yes, those ones you know about that we talk about - let's just say 'speculatively' and maybe just using the Monroe Institute 'targeted viewing' methodology, have been to the future and they know what the Louis XIII cognac is like a hundred years from now.
And yes, it is very good (@ then).
Same as it is very good right now.
The Remy Martin Estates make their wines (cognacs) also from the Grande Champagne and Petite Champagne regions and it is conceivable that at least in their case, most of the vineyards even those in the Petite Champagne areas from which they get their best grapes are all intact varieties from pre- the Phylloxera problems era.
Time...
Not all French classic wines are all that good or great, but then not all of them are not great - because some of them are very great indeed.
Nobody is cheating at Remy Martin, or at Bollinger. And there are some others too, where the standards (Bollinger instituted a formal 'Charter of Ethics and Quality' in 1992) are very high.
If you want to invest in wine - or in cognac - definitely start where the standards are very high and the ethics are genuinely held as completely important to the makers.
Because you certainly will not be told by the general media anything about people's real ethics and standards.
The fact that they employ algorithms already tells you enough.
Waiting some time into this track, is rewarding... (For the impatient, from around 3 mins., in):
Not forgetting that all of you here (right?) have been acquiring silver for some time already...
And I did say 'acquiring' and not 'buying.'
Right?
Because you have been, right?
Well why are you worried about missing out on the presumed coming rises in the price of gold?
The future has already arrived.
There is a huge difference between making yourself feel good by buying some gold and locking that away nice and tight -, and actually making some real money.
I am the last person to deny the value of going to some rock-solid vendor and getting some gold every now and again.
But the 'value' in doing that is entirely personal and fictional.
There is no mechanism in the global monetary topography that would allow for the price of gold to be released towards its true currency value - not while Basel III and its after-effects are still shaping the economies everywhere.
We are at the exhaustion phase of Western Civilization.
And what this means is that every knowable risk premium is already priced-in prior to open market exposure.
Secondly, and in some ways even more critically important, is the fact that society has developed a dysfunctional mentality about enforcing official, usually government-sanctioned 'tickets' on recognized ownership of anything of perceived value.
This is why, for instance, virtually the whole community is nowadays 'powered by pills.' And not energized by life.
You require to have an official licence telling you that you are well.
Otherwise you just don't believe it.
The past is in a bottle...
You have to have some 'official' notification
telling you that you are rich, or else you won't believe that either.
And one of the main pressures in society that is there to convince that you are unwell, and not rich, and lacking in energy to do things - is of course the simple fact that governments and their economic systems are there to push you into doing more things than you really need to (be doing).
Time - your time - is given a premium and then sold back to you.
Yet this insane mindset itself turns everyone's (including the governments/'authorities' - whatever they are supposed to be and certainly hold themselves out to be) vision downwards to the immediate present and not very far into the future.
Way off into the future they all cannot see - lol - are things that will give you more money than you ever dreamed.
The single biggest reward multiple you can get is from investing in a personal account targeted towards the coming 'regenerative dentistry' revolution.
You will make uncounted millions there from mere pennies that you sock away now for that.
And do we here, while we're on it, yet have that 'cognac not to be opened for a hundred years?'
You know, that we are moving into the Digital Silver Dirham account?
The simple things in life - are not so simple as people think.
I dunno. Maybe.
We won't be making any 'official' statement until the interest rates go much much much higher than they are right now.
And will they do that?
I'm sure I cannot say. Because, since we are now oh so very 'regular' around here and pretty much mainstream of a Blog place, we certainly cannot talk at all about going into the future and all of that kind of science fiction nonsense!
Basel III was (still is -, and still is in full operation too) a set of international agreements between banks, ratified by governments through various legal (legalistic) means to supposedly mitigate risk within the international banking sector.
By 'international banking sector' the participants simply mean to do with the flows of money via global exchange processes, which are ultimately sovereign moneys ( belong to countries/nations). And by 'risk' they mean anything that stops a particular currency from finding a market at domestically and politically acceptable rates of exchange - as what happened when the Oil Crisis of the late 1970's took place.
It's traditional and it looks good. There is no point though, thinking to stuff it with paper notes - money - to take to some Swiss numbered deposit account. Those things are not only not possible any more, but they are a pointless exercise!
However by the time of Basel III, all previous pretense of actually having national currencies maintain authentic independent and objective 'hard value' was totally abandoned.
The creation of a completely new asset class - mortgage-backed securities (aka 'securitization of debt') - which was deemed literally to be a 'Tier 1' capital asset (which is utter BS in any realistic sense), meant that instead of standard traditional universally-accepted capital assets, an entirely new and in financial economics, completely fictional thing (MBS's) was being used to say that a national currency had a hard core liquidity underlying all of its paper out on issue.
As Gregory Mannarino just said earlier this week, there are no new trades happening in banks, no new inflows of cash, no meaningful or realistic earnings and way too much debt outstanding - aka the sector is bankrupt.
When we consider the idea of multiples of value, it is impossible to think that the fact that the Canadian government has recently issued more than eight times the amount of paper (un-backed currency notes) to GNP, unlocked from the faked capital values of bank stocks and MBS equity capital and any other of several similar financial nomenclature things - will see market realizable gains in prices of anything that you can invest in.
Instead you are bound to see catastrophic losses and falls sooner rather than later...
Unless, that is, the Basel Accords as they stand today, find some way of forcing Saudi Arabia or China to accept worthless Canadian bits of paper whether digital bits of something or actual paper/plastic slips of something designated as 'money.'
This is also ancient and traditional, even a bit rustic you would say - and you could have the experience of it; if you had a wooden floor to sleep on, and an eider quilt to throw into an empty room... Empty room of old wooden house = ten fifty hundred-ty million dollars! Who cares what counting is?!
When the Iran Revolution occurred back in 1978 and then the Oil Crisis quickly followed which saw Middle Eastern countries refuse to 'roll over' their US and other bond holdings on maturity, demanding these be met with real money such as gold - cataclysms happened with global markets and equity values and with whole national economies.
Today we stand on the precipice of the exact same phenomenon except this time, national currencies have not only no hard-core backing in the static sense, but they have debt to many many times what they could ever hope to claw in annually via revenues from net national outputs.
The real pricing of things which can be and are really sold, absent of the last forty years of falsified national currency accounts, always reflects the balance of true scarcity with actual demand.
In the place of that, for the last forty years at least, multiples of value have been witnessed mostly in asset classes where the Basel II and III credit creation 'dollars' have been intentionally flowed: mortgage-backed securities and hence, real estate and everything tied to that.
Is it too much to expect that when the re-adjustment takes place, these asset classes will also show their multiples going back down?
It is too much to ask for.
Governments will do anything and everything, and in this case it will necessarily be illegitimate things, to make absolutely sure the public who were led into believing this insane phenomenon of 'free money' and never-ending upswings in real estate 'values,' do not experience any hard reality setting in on them.
I am horrified even thinking what this extended insanity might turn out to be...
But armed with what was just said, it will be clear enough to you what things are happening when they happen from now on in. And for sure you can take a view about whether it is possible to gain any advantage from the new directions for growth multiples.
For me, I will be falling back on very old school concepts of limited supply things, and the inevitable pricing of those, in the face of real demand.
First of all, our thinking has to adjust to a completely new and different world.
Digital assets, software assets, and thus AI-related anything - are all commoditizable and in no way at all capable of being locked up into very limited supply scenarios.
AI-based real estate research programs, for instance, are operating right in the area of the highest multiplication of value on core worth as supported by governments and the mentality of Basel III - but they cannot be relied upon to reflect the downside multiple factor implicit in the coming economic and financial Doomsday environment simply because, as I said, they are not capable of being kept unique and/or limited in supply or in people's access to them. Besides which governments will not allow there to be a nominal Crash in the prices of real estate.
Of course there should be, but there won't be. Instead, we will have a two-money environment - one where fictional figures dominate all thinking, and worthless bits of 'official' paper are used to manufacture an apparently 'viable' marketplace consisting of vast sums of 'money' being 'traded,' and another where a very small range of very limited supply goods and maybe some services command multiples of value and for which very different kinds of money are used to pay for, and be paid for these things.
This is almost impossible for you to envisage prior to when it actually happens before your very eyes.
And this will all be even while governments pretend it is not happening.
...I suppose one really great big, no - the truly great big secret, is how to have utter and complete happiness, and have every material thing you want, while the rest of world goes quite mad, and governments ride off into the sunset with their politicians and bureaucrats and officials driveling on about 'rules-based' junk and jabbering with total nonsense-speak about silly things that literally do not even exist.
What exists is - and as I have talked about here before - the black flags of Khorasan, have gone up on the Al Reza Mosque; and that means the likelihood of a nuclear 'event' is er...
