Gold – the final bubble, page-4152

Pre-GFC as the housing bubble got going, I was ignorant of the 'jingle loans'. This is the root cause of the structural problem and the lack of oversight by the regulators all embracing the idiotic 'free market' system and market regulating itself. If everyone can get a loan with impunity and no consequences, who wouldn't take advantage of it. Just imagine if Harvey Norman offers 3 years interest free loans on their big ticket items and upon expiry you can return the products and move on!

If you mix 'jingle loans' with greed of bankers/brokers without a regulator, Blind Freddy could see the consequences. The problem is the masking of the flawed model with fancy mathematics (Var) and spin in the name of growth with a willing partner in the name of foreign funds looking for yield and a collaborative rating agency industry, we are here 7 years later. The model rules have not changed, the investor got smarter through lessons and questioning more profoundly. Have they got rid of 'jingle loans' and replaced laws requiring loan holders to be responsible for principal payment? I am not familiar with their system.

At times P Schiff is correct that the system did not wipe the bad debts clean and start all over through bankruptcy protection or just a complete natural collapse. It was to big to fail unless it is not like GM. QE is just band aid approach then QE2 QE3 and dare I say more to come eventually? I know it is easier to say just let the banks fail because globally it would melt down. There is no structural changes to their system AFAIK. Election year in US so maybe if Trump is voted, US Govt=Corporate America and things will change?

I wish I can see a clearer picture of where all this experiment will end up but meantime Yellen is indicating one thing, the market builds up the expectation then she duck and weave but it is too late for the market. It is all in!

So far the best judge of events unfolding is the commodity markets. The MSCI commodity index is all time low, China is spluttering. Gold is barely having a heart beat and leading of this directional pull down is Silver, completely collapsed followed by Crude. There is nowhere left for investors to get some 'growth' in their valuation beside the stock market. Choose your poison, bull or bear. Sitting on cash on a semi permanent basis is not a solution.