SoT #56 – Craig Hemke: The Existing Global Financial System Is A Ticking Time Bomb

Market history tells us that regardless of the Central Banks’ intentions to drive the market higher, the overall market can overwhelm the Central Banks. Last Monday [August 24th Dow 1,000 point intra-day crash] is an example of that.  – Craig “Turd Ferguson” Hemke on Shadow of Truth

The Plunge Protection Team’s (Fed + the Treasury’s Working Group On Financial Markets) repeated attempts to keep the massive U.S. asset bubbles pumped have created an extreme degree of moral hazard in the form an unprecedented degree of capital misallocation.  The poster child of this is the U.S. stock market.

However, an even more horrifyingly extreme misallocation of capital is the private equity financings of Silicon Valley “unicorns.”  Snapchat, for instance, was recently capitalized at $16 billion despite having a estimated annualized revenue of $1 million.  That’s 16,000 times revenue.

When this insanity implodes, the collateral damage will rip huge holes in pensions funds, which having been tripping over themselves to shovel money at the big private equity firms.   To call what these sleazy NYC financiers are doing  with your retirement money a “moral hazard” is misuse of that term.  It’s more like a flagrant disregard for morality and ethics.

The Chinese recognize that the debt-based, dollar-based global reserve system wasn’t going to go on forever…as the Central Banks have tried to prop up the existing system, which is just a dead man walking, the Chinese have been, for the last seven years, preparing an alternative system for when the existing debt-based system finally collapses.  – Craig Hemke

The Wall Street propagandists, via their mainstream financial media hand puppets, are casting the blame on the recent volatility in the global equity markets on the Chinese.  It has nothing to with the inevitable unwinding of the global asset bubbles which have been inflated primarily with western Central Bank money printing, the amount of which has been multiplied many times over through a jungle-gym apparatus known as carry-trades and OTC derivatives.

Rory Hall of The Daily Coin and I hosted Craig Hemke of the TFMetalsReport on the Shadow of Truth to hear his thoughts and analysis on the key issues affecting the global financial system,  eventual collapse of the U.S. dollar, and the transition of economic and geopolitical hegemony from the west to the east.

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