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All the signs of peak bubble conditions are back – levels comparable to 1929, 2000, and the 2008 financial crisis. Artificially low interest rates coupled with quantitative easing (QE) has brought back the same dynamics that caused previous bubbles to pop as a result of unsustainable extremes, with runaway debt levels up and down the line at center. Yes, the cake eaters have been running rampant since 2008, however even with low interest rates sponsoring the largest debt bubble in history, this madness can’t continue indefinitely. The debt bubble(s) will be popped at some point (soon?). This is evidenced in bank runs emerging in periphery economies – periphery economies that are coming closer to the core every day. As with the last such instances few saw coming at the time, the next unwinding will most assuredly arrive as well, this time likely exhibiting characteristics of previous episodes as well. Like the Canadian mortgage lender that recently crashed some 60% in one day, the single biggest surprise when they start will likely be the speed at which things can unravel, as cake eaters have become desensitized to such risk with the market interventions these past years. Certainly some of the cake eaters in Canada have had their bell’s rung in past few weeks – with many more such instances likely on the way later this year – ‘the bell toll’s for thee’. Indeed, the ‘sell in May and go away’ meme may be very appropriate this year if the past is prologue, given in the most extreme bubble exemplars (with the present sequence being the most profound ever in many important respects), the buying can go on well into summer, and perhaps even into fall. The thing about cake eaters is they generally don’t know when to stop – they just keep eating until they explode. This characteristic is now being played out in the real estate and stock markets all around the world via central bank largesse, with these scoundrels (and their benefactors – bankers, brokers, and bureaucrats) being the fattest cake eaters on the planet. They simply don’t know when to stop – and they will not cease their insane behavior until they blow up – of this you can be sure. The Toronto housing market is a perfect example of this. Thieving foreigners like Canadian real estate for laundering their booty based on the belief this is a ‘safe jurisdiction’ in which they can store wealth. Unfortunately for these people however, Canadian bureaucrats are just like all the others around the world, and have now imposed predatory taxes on such investments, which has caused the bubble to burst. And while American market managers may not be as stupid as Toronto bureaucrats, purposefully (yet not knowingly) popping their own bubbles, still, being greedy cake eaters as well, at some point they too will have gorged too much to handle – and the bubbles will burst eventually. As can be seen in Canada, Europe, etc., the cake eaters on the periphery are starting to increasingly suffer from their gluttony; which again, is a condition that will be exposed at the core as well in good time (this year?). Will it be Trump’s doing – unexpected consequences of his proposed tax cuts, or something else? While nobody knows right now – make no mistake – a price for the gluttony will be paid. (See Figure 1)  
That’s all for today folks. If you want to see more charts, observations, and conclusions that go along with them from this commentary, please visit our site at treasurechests.info and subscribe. You will not regret it. Captain Hook The above was an excerpt from commentary that originally appeared at Treasure Chests for the benefit of subscribers on Monday, May 8, 2017. Treasure Chests is a market timing service specializing in value based position trading in the precious metals and equity markets, with an orientation primarily geared to identifying intermediate-term swing trading opportunities, which is an investing style proven to yield successful outcomes in the longer term. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven to be very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at http://www.treasurechests.info. Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. Copyright © 2017 www.treasurechests.info.All rights reserved. Unless otherwise indicated, all materials on these pages are copyrighted by www.treasurechests.info.No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.
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