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  Central Banks Are Going to Have to ?Pull the Plug? on Stocks ? Here's Why  
  Lorimer Wilson on 2018-01-26 17:07:46.0
 
 

It's no secret that Central Banks have been funneling liquidity bothinflation directly and indirectly into stocks. However, what most investors don't realize is that this liquidity pump is about to end because the endless streams of liquidity have unleashed inflation.

The original article by Graham Summers has been edited here for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read.

Take a look at what is happening in the bond markets which trade based on inflation in the real world. When inflation rises, bond yields rise and right now, sovereign bond yields are rising around the world.

  • The yield on the US 10-Year Treasury has broken its 20-year downtrend.

GPC11818

  • ?The yield on 10-Year German Bunds has also broken its downtrend.

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  • Even Japan's sovereign bonds are coming into the ?inflationary? crosshairs with yields on the 10-Year Japanese Government Bond just beginning to break about their long-term downtrend.

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…Central Banks cannot, and will not, risk blowing up this debt bomb. [Instead,] they are going to choose between…

  1. either pulling the plug on liquidity and letting stocks go
  2. OR letting the bond bubble blow up, destabilizing the entire financial system and rendering most governments insolvent [and]

Central Banks are going to opt for #1 every single time. Period.

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The post Central Banks Are Going to Have to ?Pull the Plug? on Stocks - Here's Why appeared first on munKNEE dot.com.

 
 
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