The Federal Reserve Will Not Save The Stock Market Again

If the stock market gets cut in half again, the Fed is not going to bail you out with another round of quantitative easing. 

They’re not going to bail you out with rate cuts because the next time the Fed tries to do that, it will destroy the dollar. I am confident of that. The next time is the last time. We will have a dollar crisis and a sovereign debt crisis.

Banks: Deutsche Bank (DB) Could Be The Weak Link Of A Chain

Deutsche Bank (DB) could be the weak link of a chain. If you remember back to when we had the financial crisis 2008, first, you had the sub-prime mortgages blowing up, and everybody was like don’t worry about it. It’s contained. I said it’s not contained, it’s just showing up first in the sub-prime market because these are the weakest mortgages. 

I think the banking system has a huge problem because it’s lived off of the life support of artificially low interest rates. As that is removed, it’s like pulling the plug off of someone who has lived off life support. The irony is you have so many analysts that think higher rates are good for the banks...

Markets: Interest Rates Are Going Back Up

I think that we're going back up and making new highs on interest rates which of course is going to be problematic for every aspect of the economy that is in debt including you know the consumers who are taking on more debt to continue to spend because they're not earning that money.

Forex: The Consensus Is Extremely Bullish On The US Dollar

The consensus is extremely bullish now on the US dollar. it was quite bearish a few months ago and now all of a sudden everybody is bullish everybody is looking for the dollar to go up it's probably almost as strong the bullishness on the dollar and bearish this on the euro is probably almost as extreme as it was at the beginning of last year and of course that ushered in the worst the biggest decline in 14-year the dollar.

Video: The Next Financial Crisis

The National Debt Disaster

The 21 trillion dollar national debt which of course is now closer to 21.2 trillion and rising rapidly -  the problem there is not just the enormity of the debt but the cost of financing it. 

One of the things that candidate Trump promised was to take advantage of these ultra-low long-term interest rates by locking them in and moving the debt more towards long-term rates. Well, he actually did the opposite as President. He's actually shortened the maturity even shorter. We're relying even more heavily now on short-term financing than ever before. 

But as interest rates are rising the cost of servicing this debt is exploding and that is one of the principal drivers of the deficits now being over a trillion dollars a year is the extra cost of paying the interest on the money that we've already borrowed. Not the money we're borrowing now to fund the current deficit but the money we have to constantly borrow to fund the 21 trillion of debt that we already have. 

So this is not a disaster for the future this is a disaster that we're gonna be dealing with in the here and now.