Summary of Michael G. Pento's The Coming Bond Market Collapse

Everest Media

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 On August 15, 1971, the Who played in Bloomington, Minnesota. The same night, President Richard Milhous Nixon addressed the nation and announced a plan to suspend the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
#2 The United States went off the gold standard in 1971, and the cost of living began to increase rapidly. In 1973, the American paycheck was decreasing in real terms.
#3 Nixon’s address to the nation on the night of the crisis was a huge help to Tim Geithner, as it allowed him to sell debt at low rates.
#4 The panic of 1907 was a financial crisis that almost crippled the American economy. It was resolved when J. P. Morgan, a prominent banker of his day, stepped in and took charge. The United States had forayed in central banking over its more than 100-year history, but past attempts at central banking had failed miserably.

Sujets

• Securities
• Investments
• Economie gestion
• Bonds
• Economics
• Business
• Bond

Informations

• Publié par: Everest Media LLC
• Date de parution: 14 mai 2022
• Nombre de lectures: 0
• EAN13: 9798822509665
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Insights on Michael G. Pento's The Coming Bond Market Collapse
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8 Insights from Chapter 9 Insights from Chapter 10
Insights from Chapter 1

#1

On August 15, 1971, the Who played in Bloomington, Minnesota. The same night, President Richard Milhous Nixon addressed the nation and announced a plan to suspend the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.

#2

The United States went off the gold standard in 1971, and the cost of living began to increase rapidly. In 1973, the American paycheck was decreasing in real terms.

#3

Nixon’s address to the nation on the night of the crisis was a huge help to Tim Geithner, as it allowed him to sell debt at low rates.

#4

The panic of 1907 was a financial crisis that almost crippled the American economy. It was resolved when J. P. Morgan, a prominent banker of his day, stepped in and took charge. The United States had forayed in central banking over its more than 100-year history, but past attempts at central banking had failed miserably.

#5

The Federal Reserve is a private company whose directors are appointed by the public. It was designed to appear separate from the federal government, to delude the masses into believing that it was making sound monetary decisions independent of political pressures.

#6

The Federal Reserve has three powers to manipulate the supply of money. The first is the reserve requirement, which dictates how much of a depositor’s money needs to sit on hand with them for safe-keeping. The second is the discount rate, which is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank.

#7

The Federal Reserve creates money by increasing its balance sheet through the purchase of financial assets and by lending money to banks. Then, something amazing happens: the money multiplies. This money magic is brought to you by the fractional reserve banking system.

#8

The Federal Reserve’s OMOs have been used to push money into the economy in the form of quantitative easing. This has helped boost inflation and the money supply, but it has done little to help the economy.

#9

The only way this economy will achieve a viable recovery is if we allow markets to work. There is no exit strategy for the Fed, only the prospect of suffering through either a deflationary depression or hyperinflation.

#10

The American dollar is a fiat currency. It has no real value beyond your confidence in it. It was created by the Federal Reserve and the private banking system out of thin air, and your confidence in it is your confidence in them.

#11

The gold standard is the world’s natural God-given money supply regulator. It has held the test of time. Gold is mined at about a 1 percent increase per annum in supply, so that would mean that gold would flow into the system and the money supply would grow at 1 percent, which is about consistent with U. S. population growth.

#12

The gold standard is a monetary system in which the currency is backed by gold, not by government decree. In the past, a deliberate increase in the supply of money has disastrous consequences, and this is why I believe the current increase in the money supply courtesy of the Fed has led to the biggest bubble ever.
Insights from Chapter 2

#1

The first speculative bubble was caused by the Dutch Golden Age, which was a period of intense growth and innovation in the seventeenth century. The price of some rare tulip bulbs grew as much as 5,000 guilders, or as much as 10 times the annual income of a skilled craftsman.

#2

The Bank of Netherlands participated in a monetary practice called free coinage, which allowed foreigners to exchange gold or silver bullion at the Bank of Netherlands for guilders and ducats. This allowed the Dutch currency to be in demand.

#3

The French were able to get rid of their debt by creating a new currency called the Mississippi Company shares, which were then used to buy the French trading company the Mississippi Company. This was a clever plan to help France get rid of its debt. But greed set in, and people began to believe the shares were worth far more than they actually were.

#4

The Fed’s creation in 1913 marked the beginning of a new era of monetary policy in the United States. The Fed’s easy-money policies perpetuated an overextension of credit that led to the 1920s’ bubble.

#5

The 1920s were characterized by a robust economy, but it was the Fed’s easy money policies that created a bubble in the real estate and equity markets. The resulting inflation was different from the inflation experienced in the 1970s.

#6

The Federal Reserve was created to prevent bank failures, but it allowed banks to fail. The country suffered deflation and entered a depression. Hoover was the architect of what would become the New Deal.

#7

The government’s response to the Great Recession has been to dramatically increase its borrowing. Gross national debt and household debt are both near record highs as a percentage of the economy for the first time in history.

#8

The Fed under Bernanke’s direction is taking its cue from a flawed playbook, and instead of allowing the economy to heal, it is digging us further into a hole.

#9

The 1980s were a prosperous time for America. Ronald Reagan was president, and his administration sought to wring out the inflation brought about by the easy-money policies of Nixon, Ford, and Carter. This brought about what my friend Larry Kudlow refers to as King Dollar.

#10

The world was becoming controlled by Kamikaze Kenyesian Counterfeiters. In the 1990s, central planning bureaucrats weren’t content blowing up their own economies; they took their show on the road and proceeded to blow up economies all around the world.

#11

The Nasdaq stock market crash in 2000 led to a mild recession. Easy-money Keynesian economists such as Paul Krugman put massive pressure on Alan Greenspan to ease, and he acquiesced. Unfortunately, after the September 11 terrorist attacks, Greenspan further succumbed to the pressure and reduced the Fed funds and discount rate, which made money easier to obtain than it needed to be.

#12

The bubble in the real estate market was twofold: the most obvious was a bubble in real estate, and what may have been less apparent before 2008 was the bubble in the collateralized debt obligation. A CDO is a financial instrument that banks and financial institutions use to theoretically reduce risk and provide liquidity.

#13

The investor class’s desire for those low-risk, solid-yielding CDOs led to the creation of another bubble: the housing market. The easy mortgage regulations and teaser rates attracted new home buyers to the market.