When The Snowball Reverses

However, we are all human, and none of us wants to consider all the change coming from the bursting of the central banker’s bubble…but it is coming. No amount of bubble blowing can stop the inevitable bubble bursting.

This snowball is becoming exceedingly tired of being pushed up the hill. The amount of bonds (extra snow) that the ECB and BoJ continue to buy to push the snowball up the hill are limited. While they can tout “whatever it takes”, the reality of a rapidly shrinking supply of bonds for them to buy in an attempt to suppress interest rates is staring them and us in the face. 

Big Central Banks Assets Jump Fastest in 5 Years to $21 trillion, Bloomberg, October 16 ‘16

Both ECB And BOJ Are Just Months Away From Running Out Of Bonds To Buy, Zero Hedge, May 18, 2017

When Will The ECB Run Out Of German Bunds To Buy: Here Is The Math, Zero Hedge, July 25 ‘17

The snowball becomes heavier with every “we are in control” press release from our financial gods. Yet the experience in US stock indices since December 2016 has planted a false idea in the major of investors:

“The Federal Reserve has raised rates three times since December after US Treasuries hit their lowest yields in American history last summer. They begin unwinding their balance sheet in October and the Dow is still making new highs almost every day. They have everything under control.”

 

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Time To Plan for The End of a Bubble?

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