2022 MARKET DISASTER: The Worst Is Yet To Come

2022 has been a disaster for global markets but the worst is yet to come.

Explaining a Market Disaster
June (King World News) – Matthew Piepenburg, Partner at Matterhorn Asset Management (based in Switzerland):  If you think the current market disaster is bad; it’s gonna get worse.

The Big 4: Dead Bonds, Rising Yields, Tanking Stocks & Stagflation
For well over a year before fantasy-pushers and politicized, central-bank mouth pieces like Powell and Yellen were preaching “transitory inflation,” or hinting that “we may never see another financial crisis in our lifetime,” we’ve been patiently and bluntly (rather than “gloomily”) warning investors of the “Big Four.”

That is, we saw an: 1) inevitable liquidity crisis which would take our 2) zombie bond markets to the floor, yields (and hence interest rates) to new highs and 3) debt-soaked nations and markets tanking dangerously south into 4) the dark days of stagflation.

In short, by calmly tracking empirical data and cyclical debt patterns, one does not have to be a market timer, tarot-reader or broken watch of “doom and gloom” to warn of an unavoidable credit, equity, inflation and currency crisis, all of which lead to increasing political and social crisis.

And that is precisely where we are today—no longer warning of a pending convergence of crises, but already well into a market disaster in the worst macro-economic setting (compliments of cornered “central planners”) that I have ever experienced in my post-dot.com career. 

But sadly, and I do mean sadly, the worst is yet to come.

As always, facts rather than sensationalism confirm such hard conclusions, and hence we turn now to some equally hard facts behind this market disaster…

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The Ignored Hangover
For well over a decade, the post-2008 central bankers of the world have been selling the intoxicating elixir (i.e., lie) that a debt crisis can be solved with more debt, which is then paid for with mouse-click money.

Investors drank this elixir with abandon as markets ripped to unprecedented highs on an inflationary wave of money printed out of thin air by a central bank near you. 

In case you still don’t know what such “correlation” looks like, see below:

But as we’ve warned in interview after interview and report after report, the only thing mouse-click money does is make markets drunk rather than immune from a fatal hangover and market disaster. 

For years, such free money from the global central banks ($30T and counting) has merely postponed rather than outlawed the hangover, but as we are now seeing further below, the hangover, and puking, has already begun in a stock, credit or currency market disaster near you.

Why?

Every Market Crisis is a Liquidity Crisis
Because the money (i.e., “liquidity”) that makes this fantasy go round is drying up faster than the debt is piling up. 

That is, years and years of issuing IOU’s (i.e., sovereign bonds) has made those IOU’s less attractive, and the solution-myth of creating money out of thin air is becoming less and less believable as inflation rises like a killer shark from beneath the feet of our money printers.….more here

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