Debt Bomb

Nov

2021

This is the Real Reason the Fed is Terrified of Raising Rates From Zero

Why is the Fed so worried about tapering QE and raising rates?

Think about it… The Fed launched this current version of QE in a single day. Why does it take SIX months for the Fed to end it… especially since stocks are at all-time highs and the COVID-19 induced recession technically ended in June of 2020?

Moreover, this is the LARGEST QE program the Fed has ever run. The prior record was set by QE 3 in 2012 which saw the Fed printing $80 billion in new money per month. The Fed is currently printing $120 billion per month and has been doing so since March of 2020. And because it’s only tapering this program at a pace of $15 billion per month, this current QE will STILL BE larger than the prior largest QE ever a full two months into the taper!

Bear in mind, we’re only talking about QE here. The Fed is terrified of raising rates a full 15 months after the recession supposedly ended… at a time when there are truly INSANE signs of froth in the financial system

Some of the more egregious examples include:

Crypto currencies that were created as jokes worth tens of billions of dollars.
People selling NFTs for farts.
Tesla (TSLA) a $1 trillion company trading like a penny stock.
Options trading volume dwarfing that of the Tech Bubble.
SPACs with NO ACTUAL BUSINESS OPERATIONS being valued at billions of dollars.
Stocks at or recently at all-time highs across the board.
Home prices at all-time highs and rising by 20% year over year.

And the Fed is SCARED of raising rates from ZERO!?!?! We’re not even talking about raising them by 2% or more… we’re talking about raising them from 0.25%!!!

What is going on here?

What’s going on is that this entire “recovery” is based on the Fed manipulating bond yields to extraordinarily low levels.

Our current financial system is based on debt, not gold or some other hard asset. U.S. government debt, called Treasuries, are the bedrock of this financial system. The yields on these bonds represent the “risk free” rate of return against which all risk assets (stocks, commodities, real estate, crypto, etc.) are valued.

The only reason you’ve got stocks at all-time highs is because the Fed has kept rates so low while pumping over $4 trillion in new money into the system. Take that away, and the whole mess is a house of cards.

You can see this everywhere, though you might not be able to connect the dots.

The whole situation is not a real recovery, it’s just a massive band-aid over deep structural wounds that policymakers forced on the economy and financial system when they pushed to shut the economy down.

You can tell the whole thing is total BS based on the stock market alone. Notice how this latest bubble is so extreme it actually exploded out of an uptrend in ways that neither the Tech Bubble nor the Housing Bubble ever did?

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That’s why the Fed is so terrified of normalizing monetary policy. Because it threw the kitchen sink at the financial system to create this bubble.

So what happens when the bubble bursts as all bubbles do? $250 billion in QE per month? $500 billion in QE per month?

At the end of the day, this is coming whether the Fed wants it or not. It’s just a matter of when.

The big question for investors is… HOW DO WE AVOID THIS?

To figure this out, I rely on certain key signals that flash before every market crash.

I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.

To pick up a free copy, swing by

https://phoenixcapitalmarketing.com/predictcrash.html

Best Regards

Sep

2021

China’s Black Swan Has Arrived… Are You Ready?

The market is a sea of red this morning.

The issue at hand is China’s massive Evergrande property developer. The company is effectively insolvent, with over $300 billion in bad loans. Many are calling this “China’s Lehman Moment.”

The company’s stock is down 80% Year to Date.

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How serious is this?

Serious.

Real estate comprises nearly 8% of China’s economy. Construction is another ~8%. So, all in all, you’re looking at 16% of the second largest economy in the world experiencing the bankruptcy of one of its largest players. This has significant implications for everything from commodities (use in construction) to finance (the loans used to build the buildings and finance the mortgages for consumers).

And in these types of situations, there is never just one player at risk.

Contagion has already begun. Hong Kong property developers and Chinese industrial producers are getting hit. And if you think this will be confined to China you are mistaken.

Australia supplies much of the commodities China uses for its construction. It is not coincidence that BHP Group (BHP) and other major Australian miners are nosediving, crashing 26% in the last few weeks.

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And then there’s European banks, which have massive exposure to China. By the look of the bloodbath this morning, things are spreading to there as well.

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This is the problem with an Everything Bubble: you never know where the black swan is going to come from.

With the financial system in the single largest bubble of all time, and leveraged to the hilt by easy debt courtesy of Central Bank policies, even a single spark can set the whole thing to blow.

As I warned a few weeks ago, this whole mess will come crashing down one day. In market terms, this is going to happen, it’s just a matter of time.

The question of course is “when”?

To figure that out, I rely on certain key signals that flash before every market crash.

I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.

To pick up a free copy, swing by

https://phoenixcapitalmarketing.com/predictcrash.html

Best Regards

Jul

2021

Why a Rising $USD is a Major Issue for the U.S.

The #1 issue for the markets this week is the $USD.

The U.S. dollar is strengthening. A strong dollar is not necessarily a bad thing, but it runs completely contrary to the Fed’s stated goal of creating inflation.

Following a brief spike during the deflationary episode of March, for most of 2020, the $USD dropped like a stone (see area highlighted by a red arrow in the chart below). However, it’s been a completely different era for 2021 as the $USD has been rangebound thus far (see blue rectangle in the chart below).

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This is happening at a time when the Fed has explicitly stated that it wants to create inflation. It is also happening at a time when the U.S. is $28 trillion in debt, and the U.S. is attempting to run a $3+ trillion deficit.

And therein lies the problem.

The U.S. finances its spending via tax revenues. If tax revenues are not great enough to cover the costs, the U.S. issues debt. This is deficit everyone is always talking about. In simple terms the U.S. finances its massive spending sprees by issuing debt.

In order for the bond market to absorb the massive debt issuance the U.S. generated in 2020 (the U.S. ran a $3 trillion deficit that year), it required higher yields. In simple terms, this was the bond market saying, “if you want us to buy all of this debt, you need to pay us more.” You can see this in the chart below.

This changed in 2021, at which time bond yields began to roll over as it appeared Congressional gridlock would limit the Biden administration’s plans on spending some $6 trillion. Yields started to come down as the bond market began to process this information.

But that doesn’t mean the $USD at current levels isn’t a problem. Even if the Biden administration can’t run a $6 trillion budget, it will still run a $3+ trillion deficit. Indeed, the U.S. is already $2 trillion in the red for 2021 as of June.

The stronger the $USD is in this environment, the more “expensive” it is the U.S. to pay its debts. A big part of the Fed/ Federal Government’s scheme with inflation is that it means the U.S. can pay back its debts with dollars that are technically worth less.

But if the $USD stays strong, this means it becomes more expensive for the U.S. to finance its debt loads. And with total public debt north of $28 trillion, this can be a real problem.

Indeed, it’s possible the U.S. is finally approaching a potential debt crisis in the coming months. With that in mind, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We are making just 100 copies available to the general public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2021

Warning: the Bond Market is Starting to Blow Up Again

The markets are at a crossroads.

We’ve had one major rally this week (Monday).

We’ve had one major drop this week (Tuesday).

The issue is which one was the real deal. Monday could easily have been the result of short-covering and “start of the month” buying by financial institutions.

Similarly, Tuesday could have been the markets dropping simply because China issued a warning that it believes U.S. stocks are “in a bubble.”

Honestly, it’s impossible to tell. The market is a bit of a mess. So, the best thing to do is wait and watch today as the markets will finally provide some clarity. One of the greatest trader’s adages is “when in doubt, stay out.” And that certainly rings true for the market this week.

For the S&P 500, the support is at 3,860, 3720, 3,640, and 3,550. If stocks take out this first line (3,850) on a closing basis, it opens a “trapdoor” to a nasty drop to the low 3,700s. This is a BIG reason not to be adding to longs this week.

Similarly, if you are a stock market bear, you don’t want to ignore the strong uptrend stocks have established over the four months. We’ve had two “bear traps” during that time in which stocks broke down, violating the trendlines only to reverse and rally hard. I’ve identified those occasions with red circles in the chart below.

If you’re a bear, these are why you don’t want to bet on a big collapse right now: stocks could breakdown only to reverse and take you to the cleaners.

So again, the best strategy this week is to “watch and wait.” Let the market show you what is coming and then take action.

Bear in mind, we’re talking strictly about TODAY, as in right now. In the intermediate term, I remain extremely bearish.

Why?

Because inflation is blowing up the bond market. Bonds bounced a few days ago, but are once again rolling over and falling.

Put another way, the issue that blew up the stock market late last week has not been resolved. If anything, it’s about to get worse.

Which means stocks could very easily be a bloodbath in the coming weeks.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

We are making just 100 copies available to the public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Jan

2021

The US is Running $3 Trillion Deficits Atop a $27 TRILLION Debt Mountain

Joe Biden will be sworn in as the 46^th President of the United States today.

He is inheriting a US debt mountain of over $27 trillion in debt. Indeed, the US has a Debt to GDP ratio of 130%. By way of perspective, this is where Greece was when it blew up in 2010.

Biden’s solution to this issue is to issue even MORE debt via what will be one of, if not THE largest fiscal stimulus in history. He has already proposed:

1) A new stimulus program of $2 trillion.

2) An infrastructure program of $2+ trillion.

Beyond this, Janet Yellen, his Treasury Secretary has stated that she believes Climate Change is an “existential threat” and will use policy to fight it.

This means even MORE money printing and credit issuance.

And this is at a time when the US is already running a $3 trillion deficit.

All of this is going to unleash an inflationary storm.

Gold has already figured this out. Other inflationary assets are not far behind.

At the end of the day, this isn’t an attack on Joe Biden or the Democrats. The COVID-19 pandemic has revealed that policymakers will deal with any and all issues going forward by PRINTING MONEY.

The fact the US is doing this at a time when it is perched atop the largest debt mountain in history will only accelerate things.

After all, with this much debt, there is no way on earth the US can pay it off. INFLATING it away is the only answer. Which is why I believe the Biden administration is going to make the already debt-crazed Trump administration look like amateurs when it comes to money printing.

Those investors who are well positioned to profit from it could see literal fortunes.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

As I write this there are just 13 left.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Jul

2020

Yes, the Market is in a Bubble. And It May Have Just Burst.

The stock market is in a bubble.

Actually, that statement is not 100% correct. SOME stocks are in a massive bubble. Other stocks are not even close.

The bubble we are facing today is in large tech stocks.

To prove this, I’m not going to get into the technology itself, nor am I going to try to get clever with discounted cash flows or some other analysis.

Instead I’m going to use the simplest method of analysis possible: mean reversion.

Why? Because price ALWAYS reverts to the mean.

It doesn’t matter how great management is, nor how fast sales are growing, at some point a stock’s price will revert back to its mean.

For the sake of today’s argument I am using the 50-week moving average (WMA) as the “mean.” If you’re unfamiliar with this concept, the 50-week moving average comes from adding up the closing prices of the last 50 weeks and then dividing that number by 50.

Historically, this line has acted as a magnet for stock prices. In the case of large tech companies today, let’s take a look at Apple (AAPL).

As you can see in the below chart, the 50-week moving average has served as an anchor for AAPL’s stock over the last 10 years. Anytime AAPL has become too “stretched” above or below this line, it has reverted back to it… usually quite quickly.

Now, take a look at how far AAPL’s stock is stretched above the line today compared to other peaks. I’ve actually looked deeper here and AAPL is MORE stretched above its 50-WMA today than at any point in the last 10 years with only one exception.

In 2012, AAPL’s stock was 38% above its 50-WMA. That was a peak.
Later in 2012, AAPL’s stock was 21% above its 50-WMA. That was a peak.
In 2015, AAPL’s stock was 12% above its 50-WMA. That was a peak.
In 2018, AAPL’s stock was 18% above its 50-WMA. That was a peak.
In 2019, AAPL’s stock was 26% above its 50-WMA. That was a peak.

Today, AAPL’s stock is 28% above its 50-WMA.

This is a bubble, plain and simple.

Of course, AAPL stock can continue higher, becoming even more stretched above its 50-WMA but that mean reversion move is coming eventually.

Put simply, the risk to reward for large Tech Stocks is extremely high right now. Yes, you could possibly make money buying AAPL’s stock but the idea you’ll make a lot is minimal.

And at some point, this bubble will burst as all bubbles do and we will get that mean reversion move.

I believe this move may have started yesterday.

Smart investors are already taking steps to profit from the next major downturn in the markets.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

We made 100 copies available to the public.

As I write this, there are just 9 left.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Jul

2020

The 90 Day Debt Holiday is Ending… Now Comes the Bankruptcies

We are now entering the time in which the true structural damage caused by the COVID-19 pandemic will be revealed.

Back in April when the economy was on lockdown, it became clear that many large businesses were in serious trouble. I’m specifically talking about restaurants, commercial real estate and retail. At that time, multiple large chains informed their lenders that they would NOT be paying rent in April.

Cheesecake Factory, Subway, other major retailers tell landlords they can’t pay April rent due to coronavirus

Source: Yahoo! Finance.

To deal with this issue, the banks and large financial institutions gave their borrowers 90-day forbearances on their debt payments… meaning those groups wouldn’t be required to make debt payments for 90 days.

Put another way, the banks told these businesses “don’t worry about making any debt payments for 90 days… but come July you’ll have to start paying us again.”

That was in APRIL… exactly 90 days ago.

Which means… these same businesses will now have to start making debt payments again. And if they have not TRULY recovered from the economic shutdown… we’re about to see a TSUNAMI of defaults and bankruptcies, as well as layoffs and shutdowns.

This process has already begun as the below headlines reveal:

Wells Fargo reportedly preparing to cut thousands of jobs
United Airlines warns it could furlough 36,000 employees by Oct. 1 as demand remains low
Storied apparel brand Brooks Brothers files for bankruptcy as it seeks a buyer and closes dozens of stores
Muji files for bankruptcy
GNC files for bankruptcy and will close up to 1,200 stores
24 Hour Fitness files for bankruptcy, closes more than 100 gyms

It’s only going to get worse from here on out.

Smart investors are already taking steps to profit from the next major downturn in the markets.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

We made 100 copies available to the public.

As I write this, there are just 9 left.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Jul

2020

The Fuse is Now Lit on a $10 Trillion Debt Bomb

We are now entering the time in which the true structural damage caused by the COVID-19 pandemic will be revealed.

Cheesecake Factory, Subway, other major retailers tell landlords they can’t pay April rent due to coronavirus

Source: Yahoo! Finance.

Put another way, the banks told these businesses “don’t worry about making any debt payments for 90 days… but come July you’ll have to start paying us again.”

That was in APRIL… exactly 90 days ago.

This process has already begun as the below headlines reveal:

Wells Fargo reportedly preparing to cut thousands of jobs
United Airlines warns it could furlough 36,000 employees by Oct. 1 as demand remains low
Storied apparel brand Brooks Brothers files for bankruptcy as it seeks a buyer and closes dozens of stores
Muji files for bankruptcy
GNC files for bankruptcy and will close up to 1,200 stores
24 Hour Fitness files for bankruptcy, closes more than 100 gyms

It’s only going to get worse from here on out.

Smart investors are already taking steps to profit from the next major downturn in the markets.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

We made 100 copies available to the public.

As I write this, there are just 9 left.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Jun

2020

Is the Fed Money Printing/ Stimulus Going to Blow Up the Bond Bubble?

The #1 thing investors need to be thinking about today are “unintended consequences.”

Everyone knows that the Fed has flooded the financial system with liquidity. This liquidity, combines with what appears to be a “V” shaped recovery in the economy, is what propelled stocks to go straight up from the March lows.

As I write this Tuesday morning, the S&P 500 has broken out of a rising wedge formation (blue lines in the chart below) to the upside. It is now slamming into overhead resistance (red line in the chart below).

It is unlikely we break this on the first try. And a drop to retest the breakout would be perfectly normal. I’ve drawn what this would look like with a red arrow in the chart above.

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So… stocks rally on liquidity as the Fed reflates the system. That’s the obvious consequence of the Fed printed $1 trillion a month. But what is the unintended consequence of this money printing?

The market is suggesting it could be a crash in bonds.

The US was already on schedule to run a $3-$4 trillion deficit this year based on the March-May economic shutdown. However, it is growing clearer that the real number is going to be even higher than that.

Multiple states (NY, CA, IL) are on the brink of insolvency and will need bailouts soon. And the President has suggested he’d like a massive infrastructure bill ($1+ trillion) passed this year as well.

Either of those could mean the US needing to issue $5-$6 trillion in NEW debt this year on top of rolling over old debts. The bond market is signaling this might be too much for it to absorb at current levels.

The long-term Treasury has rolled over badly. We are now at support (green line in the chart below) and STILL a long ways from a mean-reversion drop to test the bull market trendline (blue line in the chart below).

A bond crash would mean the bond market revolting against the US’s fiscal stimulus. And it would have a profound impact on ALL risk assets, including stocks.

So while it’s nice to see stocks rallying so much, we need to consider what might be coming down the pike in the near-future. Bonds suggest it’s nothing pretty.

If you’re sick of narratives and want to focus on how to actually make money from the markets, join our FREE e-letter Gains Pains & Capital.

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Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

On Negative Oil Prices, Derivatives, and Systemic Risk

Let’s talk about what just happened with Oil prices.

Yesterday, Oil dropped to -$40 per barrel. That is not a typo. Oil was priced at NEGATIVE $40.

On Friday, it was priced at $27 per barrel.

How is this possible?

This is possible because of derivatives: financial instruments that trade in opaque markets, with little oversight, and which regulators, including Congress, have permitted to become a systemic problem.

In its simplest rendering, yesterday oil traders who owned oil derivatives realized that if they continued to hold these derivatives, they (the traders) would have to actually take delivery on the physical oil they owned. We’re talking thousands and thousands of oil barrels being delivered.

The traders don’t want the actual physical oil. They simply want to be able to trade oil prices. So, they dumped their derivatives at any price… including PAYING someone to take the derivatives off of their hands.

This is how you get NEGATIVE oil prices. And it reveals the degree to which the financial system has become totally overrun with derivatives, leverage, and financial trickery.

Even worse, Oil is not the only asset class that has been overrun with derivatives. The bulk of trading in every commodity, including gold, involves derivatives. The same is true of BONDS.

Derivatives are used to hide losses, manipulate prices, and even fake profits. They are a massive problem that nearly blew up the financial system in 2008… and as oil’s implosion yesterday revealed, remain a major problem today as well.

How big a problem are we talking?

The last official data on the global derivatives market puts it at $640 TRILLION, or over SEVEN TIMES GLOBAL GDP.

What happened in oil is a signal that this financial monstrosity is once again rearing its head. The question now is just how horrific the carnage will be.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

Is Oil the Canary in the Coal Mine for a $640 Trillion Derivatives Disaster?

Let’s talk about what just happened with Oil prices.

Yesterday, Oil dropped to -$40 per barrel. That is not a typo. Oil was priced at NEGATIVE $40.

On Friday, it was priced at $27 per barrel.

How is this possible?

This is how you get NEGATIVE oil prices. And it reveals the degree to which the financial system has become totally overrun with derivatives, leverage, and financial trickery.

Even worse, Oil is not the only asset class that has been overrun with derivatives. The bulk of trading in every commodity, including gold, involves derivatives. The same is true of BONDS.

How big a problem are we talking?

The last official data on the global derivatives market puts it at $640 TRILLION, or over SEVEN TIMES GLOBAL GDP.

What happened in oil is a signal that this financial monstrosity is once again rearing its head. The question now is just how horrific the carnage will be.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2020

The Everything Bubble has burst. The next crisis, the BIG one to which 2008 was the warmup, is fast approaching.

During the 2008 crisis, the Fed did three things:

Cut interest rates to zero making credit all but free for banks.

Implemented large Quantitative Easing (QE) programs through which it printed $3.5+ trillion in new money to buy assets from large financial institutions, primarily mortgage backed securities and US government debt, also called Treasuries.

Urged the Financial Accounting Standards Board (FASB) to abandon “market to market” valuations for the banks, thereby allowing the banks to value the debts on their balance sheet at “make believe” prices.

Combined, these three policies, particularly #s 1 and 2, create a bubble in US Treasuries, forcing yields to extraordinary lows.

Treasuries are the bedrock of the global financial system. Their yields represent the “risk free” rate of return: the rate against which all risk assets (stocks, commodities, real estate, etc.) are priced.

So, when the Fed created a bubble in Treasuries, it created a bubble in EVERYTHING: the entire financial system became mispriced based on a false risk profile.

Every asset class in the world trades based on the pricing of bonds. So the fact that bonds are in a bubble (arguably the biggest bubble in financial history), means that EVERY asset class is in a bubble.

I am focusing on the Fed here, but the same policies played out in every major financial system.

The European Central Bank (ECB) employed the same policies in Europe, the Bank of England (BoE) employed the same policies in the UK, and the Bank of Japan, (BoJ) which had already been doing both ZIRP and QE since 2000, took these polices to even greater extremes.

The end result is central bankers created the BIGGEST, most egregious bubble in financial history. A $250 TRILLION debt bomb… with another $500+ trillion in derivatives trading based on its yields.

To put this into perspective, the Tech Bubble was about $15 trillion in size. The Housing Bubble, which triggered the 2008 Crisis, was about $30 trillion in size.

The bond bubble is over $250 TRILLION in size. Some $50 trillion of this is in sovereign debt, with the rest coming from corporate debt, mortgages, auto loans, credit cards and the like.

This mountain of debt is categorized based its riskiness. Not all debt is equal because of the fact that different borrowers have different levels of risk of default. For instance, an oil shale company that needs oil to trade at $60 per barrel is at much greater risk of default than a sovereign nation like the U.S..

For simplicities sake we’re going to ignore auto-loans, student debt, and credit card debt to focus on the truly systemically important debt.

Corporate, Municipal, and Sovereign/ National.

In the U.S., things rapidly moving up the bond food chain.

The Junk Bond corporate bond market bubble has burst.

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The bubble in less risky corporate debt, called investment grade is about to do the same.

Further up the food chain, the bubble in high yield municipal bonds (bonds issued by cities, states and the like) has also burst.

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The BAD news is that the bubble in investment grade municipal bonds has ALSO burst.

This leaves sovereign bonds, or Treasuries. Right now, the bubble in U.S. treasuries remains intact with bond yields within a clearly defined bear market (bond yields fall when bond prices rise, so the bubble is stable).

This is NOT the case in Europe.

Germany is the largest most dynamic economy in Europe. As such Germany is the ultimate backstop for the EU. And German sovereign bonds are beginning to breakdown.

Despite a deflationary collapsing, bond yields on the 10-Year German Government bonds is RISING, meaning those bonds are falling in value.

This SHOULD not be happening. German bond yields should be falling based on the deflation in the system right now.

Indeed, just this week Germany experienced a failed bond auction… meaning not enough buyers showed up to buy its bonds.

That kind of thing can happen from time to time… but for it to happen during a flight to safety like the one happening right now is a REAL signal that the EU’s bond market is in serious trouble.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2020

The Everything Bubble has burst. The next crisis, the BIG one to which 2008 was the warmup, is fast approaching.

During the 2008 crisis, the Fed did three things:

Cut interest rates to zero making credit all but free for banks.

Implemented large Quantitative Easing (QE) programs through which it printed $3.5+ trillion in new money to buy assets from large financial institutions, primarily mortgage backed securities and US government debt, also called Treasuries.

Urged the Financial Accounting Standards Board (FASB) to abandon “market to market” valuations for the banks, thereby allowing the banks to value the debts on their balance sheet at “make believe” prices.

Combined, these three policies, particularly #s 1 and 2, create a bubble in US Treasuries, forcing yields to extraordinary lows.

So, when the Fed created a bubble in Treasuries, it created a bubble in EVERYTHING: the entire financial system became mispriced based on a false risk profile.

I am focusing on the Fed here, but the same policies played out in every major financial system.

The end result is central bankers created the BIGGEST, most egregious bubble in financial history. A $250 TRILLION debt bomb… with another $500+ trillion in derivatives trading based on its yields.

To put this into perspective, the Tech Bubble was about $15 trillion in size. The Housing Bubble, which triggered the 2008 Crisis, was about $30 trillion in size.

The bond bubble is over $250 TRILLION in size. Some $50 trillion of this is in sovereign debt, with the rest coming from corporate debt, mortgages, auto loans, credit cards and the like.

For simplicities sake we’re going to ignore auto-loans, student debt, and credit card debt to focus on the truly systemically important debt.

Corporate, Municipal, and Sovereign/ National.

In the U.S., things rapidly moving up the bond food chain.

The Junk Bond corporate bond market bubble has burst.

The bubble in less risky corporate debt, called investment grade is about to do the same.

Further up the food chain, the bubble in high yield municipal bonds (bonds issued by cities, states and the like) has also burst.

The BAD news is that the bubble in investment grade municipal bonds has ALSO burst.

This is NOT the case in Europe.

Germany is the largest most dynamic economy in Europe. As such Germany is the ultimate backstop for the EU. And German sovereign bonds are beginning to breakdown.

Despite a deflationary collapsing, bond yields on the 10-Year German Government bonds is RISING, meaning those bonds are falling in value.

This SHOULD not be happening. German bond yields should be falling based on the deflation in the system right now.

Indeed, just this week Germany experienced a failed bond auction… meaning not enough buyers showed up to buy its bonds.

That kind of thing can happen from time to time… but for it to happen during a flight to safety like the one happening right now is a REAL signal that the EU’s bond market is in serious trouble.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2020

Someone or someones are in MAJOR trouble.

Back in September 2019, the Fed announced it would begin implementing a number of repurchase “repo” programs.

If you’re unfamiliar with repo programs, these are programs through which the Fed allows financial banks/ institutions to park assets at the Fed, in exchange for cash.

At the time the Fed announced this, it claimed that it was performing these programs to help with a capital crunch due to tax season. However, that excuse was soon proven to be total bunk as the repo programs were extended from September through October and finally through January.

At the same time, the repo programs grew in size from $75 billion for overnight repos and $30 billion for term repos, to $120 billion in overnight repos and $45 billion in term repos.

Why would the Fed be doing this? After all, the economy was growing at the time, and there were no indications or systemic risk in the U.S. financial system.

The Fed was doing this because a financial institution or institutions were in BAD SHAPE and desperate for capital. By bad shape I mean “Lehman Brothers” type failure.

We do not know who it is but considering the fact that the Fed announced an emergency round of $1.5 TRILLION in repos last week… and even that stopped the market from collapsing, suggest it’s a very LARGE institutions (think the size of Deutsche Bank or UBS).

With this in mind, it doesn’t matter what happens with coronavirus or with the economy. If a large systemically important financial institution or bank fails, we could get a Lehman-like liquidation in the markets.

If you think I’m being dramatic here, consider that the EIGHT largest U.S. banks just announced they are going to start accessing the Fed’s Discount Window: a means through which the Fed gives banks access to capital overnight.

The banks haven’t done this since 2008.

Again, a large financial institution or institutions are in MAJOR trouble here. The fact that even $1.5 TRILLION in repos didn’t fix this issue means it’s truly a systemic problem.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Mar

2020

We Are Now Approaching the “Lehman” Event… Prepare NOW!

Someone or someones are in MAJOR trouble.

Back in September 2019, the Fed announced it would begin implementing a number of repurchase “repo” programs.

If you’re unfamiliar with repo programs, these are programs through which the Fed allows financial banks/ institutions to park assets at the Fed, in exchange for cash.

At the same time, the repo programs grew in size from $75 billion for overnight repos and $30 billion for term repos, to $120 billion in overnight repos and $45 billion in term repos.

Why would the Fed be doing this? After all, the economy was growing at the time, and there were no indications or systemic risk in the U.S. financial system.

The Fed was doing this because a financial institution or institutions were in BAD SHAPE and desperate for capital. By bad shape I mean “Lehman Brothers” type failure.

The banks haven’t done this since 2008.

Again, a large financial institution or institutions are in MAJOR trouble here. The fact that even $1.5 TRILLION in repos didn’t fix this issue means it’s truly a systemic problem.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Mar

2020

The world is facing two crises.

The first, coronavirus, is manufactured, the second, a credit implosion, is very real.

The coronavirus panic was 100% made up and manufactured by the media. Globally 100,000 people have been infected and a little over 3,000 have died. Swine Flu infected 60 MILLION and KILLED 60,000 people, in the U.S. alone.

No one shut down their economy over swine flu. No one stock piled toilet paper. No one talked about the end times. Those are facts.

However, now that the elites are shutting down things, the economy will take a real hit. If large group meetings are considered a danger, then factories, companies, schools, conferences and the like will be canceled. And that will hit the economy HARD.

Now let’s talk about the REAL crisis that is hitting the financial system.

As you are no doubt aware, there is too much debt in the financial system. Globally Debt to GDP is north of 200%. Leverage is higher today than it was in 2007. And the world is absolutely saturated in debt on a sovereign, state, municipal, corporate and personal level.

However, everything continued to run smoothly as long as nothing began to blow up in the debt markets/ credit markets. And despite a few hiccups here and there, the debt markets have been relatively quiet for the last few years.

Not anymore.

Someone or something is blowing up in a horrific way “behind the scenes.”

The Fed was FORCED to start providing over $100 BILLION in free money overnight back in September 2019. And even that massive amount is proving inadequate (last night the Fed was forced to pump $216 BILLION into the system).

You don’t get those kinds of demands for liquidity unless something is truly horrifically wrong. Think LEHMAN BROTHERS.

This is why the markets are failing to rally. It is why every major central bank is out talking about launching new aggressive monetary policies. And it is why the Fed is privately freaking out.

Below is a chart showing the credit market (black line) relative to the stock market (red line). As you can see, the credit market is already telling us that stocks should be trading at 2,600 or even lower.

This is a real crisis. And from what I can see, the Fed can’t stop it.

What stopped the last crisis?

The Fed fought back by launching rate cuts and QE.

This crisis started when the Fed was already doing rate cuts and QE.

And those policies aren’t doing anything to stop the bloodbath.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2020

The world is facing two crises.

The first, coronavirus, is manufactured, the second, a credit implosion, is very real.

No one shut down their economy over swine flu. No one stock piled toilet paper. No one talked about the end times. Those are facts.

Now let’s talk about the REAL crisis that is hitting the financial system.

Not anymore.

Someone or something is blowing up in a horrific way “behind the scenes.”

You don’t get those kinds of demands for liquidity unless something is truly horrifically wrong. Think LEHMAN BROTHERS.

This is why the markets are failing to rally. It is why every major central bank is out talking about launching new aggressive monetary policies. And it is why the Fed is privately freaking out.

This is a real crisis. And from what I can see, the Fed can’t stop it.

What stopped the last crisis?

The Fed fought back by launching rate cuts and QE.

This crisis started when the Fed was already doing rate cuts and QE.

And those policies aren’t doing anything to stop the bloodbath.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Mar

2019

Why is the Head of the NY Fed Talking About NIRP?

As I warned yesterday, the Fed has discovered that:

1) It is impossible to normalize monetary policy in an Everything Bubble.

And…

2) The Everything Bubble is now bursting.

The Fed now has a choice: implement monetary policies even more extreme than the ones it used in 2008-2012 or… let the Everything Bubble burst and the whole system come crashing down.

The Fed has obviously chosen option #1.

If you think I’m being overly dramatic about what’s happening here, consider that the President of the NY Fed (the branch of the Fed in charge of financial markets) announced yesterday that the Fed is consider NEGATIVE Interest Rate Policy (NIRP).

If everything is fine… if the financial system is stable… and we are nowhere near a crisis… why would the head of the NY Fed be suggesting the Fed consider cutting rates to NEGATIVE during the next downturn?

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This…

This is the yield on the 10-Year Treasury, the single most important bond in the financial system. As you can see, it’s broken a multi-decade downtrend to the upside.

When bond yields rise, bond prices fall.

When bond prices fall, debt deflation hits the financial system.

When debt deflation hits the financial system, the financial system BLOWS UP.

THIS is why the Fed is in a panic. It’s why the Fed has stopped hiking rates. And it’s why the Fed is desperate to launch even MORE extreme monetary policy as soon as possible.

If you aren’t actively taking steps to prepare for this, you need to start NOW.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s coming down the pike when the Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here.

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Feb

2019

How Bad Are the US’s Finances That the Fed is Talking About Them on Record?

Yesterday, Fed Chair Jerome Powell made a starling admission,

“The U.S. federal government is on an unsustainable fiscal path,” Powell told the Senate Banking Committee, noting that “debt as a percentage of GDP is growing, and now growing sharply… And that is unsustainable by definition.”

Source: Yahoo! Finance

What Powell said has been obvious to anyone with a functioning brain for years. However, we have to remember one key item…

This is the FED CHAIR talking… the person in charge of maintaining STABILITY for the financial system and who controls the printing the of the US currency… not just some talking head on TV.

So just how bad are the US’s finances that the Fed Chair would be willing to admit this PUBLICLY?

Total US debt has just hit $22 trillion. The US now has a Debt to GDP ratio of 105%. This is roghly where Greece was when it entered a debt crisis in 2010 (though there are certain key differences between the US’s and Greece’s abilities to deal with their debt issues).

Fed Chair Jerome Powell has also made it clear that it is NOT the Fed’s job to fix this.

“We need to stabilize debt to GDP. The timing the doing that, the ways of doing it —through revenue, through spending — all of those things are not for the Fed to decide.”

Source: Yahoo! Finance

So… either the US Political Elite needs to spend less (not going to happen) or it needs to find access to new sources of capital… ours.

With that in mind, the current political agenda to push for Wealth Taxes, cash grabs and other means of raising capital all makes sense.

Consider the following:

The IMF has already called for a wealth tax of 10% on NET WEALTH.

More than one Presidential candidate for the 2020 US Presidential Race has already openly called for a wealth tax in the US.

Polls suggest that the majority of Americans support a wealth tax.

And if you think this will stop with the super wealthy, you’re mistaken. You could tax 100% of the wealth of the top 1% and it would finance the US deficit for less than six months.

Which means…

Cash grabs, wealth taxes, and more will soon be coming to Main Street America.

Indeed, we’ve uncovered a secret document outlining how the Fed plans to both seize and STEAL savings during the next crisis/ recession.

We detail this paper and outline three investment strategies you can implement right now to protect your capital from the Fed’s sinister plan in our Special Report The Great Global Wealth Grab.

We are making just 100 copies available for FREE the general public.

You can pick up a FREE copy at:

http://phoenixcapitalmarketing.com/GWG.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Feb

2019

How Wealth Grabs Fit Into the Coming US Debt Crisis

Yesterday, Fed Chair Jerome Powell made a starling admission,

Source: Yahoo! Finance

What Powell said has been obvious to anyone with a functioning brain for years. However, we have to remember one key item…

This is the FED CHAIR talking… the person in charge of maintaining STABILITY for the financial system and who controls the printing the of the US currency… not just some talking head on TV.

So just how bad are the US’s finances that the Fed Chair would be willing to admit this PUBLICLY?

Fed Chair Jerome Powell has also made it clear that it is NOT the Fed’s job to fix this.

“We need to stabilize debt to GDP. The timing the doing that, the ways of doing it —through revenue, through spending — all of those things are not for the Fed to decide.”

Source: Yahoo! Finance

So… either the US Political Elite needs to spend less (not going to happen) or it needs to find access to new sources of capital… ours.

With that in mind, the current political agenda to push for Wealth Taxes, cash grabs and other means of raising capital all makes sense.

Consider the following:

The IMF has already called for a wealth tax of 10% on NET WEALTH.

More than one Presidential candidate for the 2020 US Presidential Race has already openly called for a wealth tax in the US.

Polls suggest that the majority of Americans support a wealth tax.

And if you think this will stop with the super wealthy, you’re mistaken. You could tax 100% of the wealth of the top 1% and it would finance the US deficit for less than six months.

Which means…

Cash grabs, wealth taxes, and more will soon be coming to Main Street America.

Indeed, we’ve uncovered a secret document outlining how the Fed plans to both seize and STEAL savings during the next crisis/ recession.

We are making just 100 copies available for FREE the general public.

You can pick up a FREE copy at:

http://phoenixcapitalmarketing.com/GWG.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

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On Negative Oil Prices, Derivatives, and Systemic Risk

Is Oil the Canary in the Coal Mine for a $640 Trillion Derivatives Disaster?

Why is the Head of the NY Fed Talking About NIRP?

How Bad Are the US’s Finances That the Fed is Talking About Them on Record?

How Wealth Grabs Fit Into the Coming US Debt Crisis

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