The Bubble That the Mainstream Chooses to Ignore

13.12.2017 • France

Simone Wapler – La Chronique Agora (France) –

Observers screaming at the bitcoin bubble forget to denounce the most monstrous financial bubble of all time: bonds with negative return.

“It’s official: Bitcoin surpasses the bubble of the tulip, it’s now the biggest bubble in history,” says Zerohedge site this morning.

The site publishes a bubble intensity chart from Convoy Investments.

Bitcoin 2014 to?
Tulip 1619-1622
Mississippi shares 1716-1719
Bubble of the South Seas 1719-1722
US stocks 1923-1932
Gold 1975-1982
Japanese real estate 1980-2003
Japanese shares 1982-1992
Internet bubble 1994-2002
American Real Estate 1996-2011
US stocks 2003-2009
Chinese shares 2005-2008
Oil 2005-2008
Chinese shares 2014 to?
US stocks 2009 to?

There is not really an official encrypted and quantified definition of what a bubble is. It is simply a speculative frenzy resulting in a violent rise in prices and ending in collapse.

In the absence of collapses, it is not yet proven that bitcoin, Chinese equities and US equities are in a bubble. We are waiting hard.

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Moreover, the volume of the bubble is largely as interesting as its intensity. The tulip finally attracted a small proportion of the capital available in its time, the internet bubble much more.

Above all, this ranking misses the essential, the biggest bubble of all, the most absurd, the most stupid, the most insane, the one that will explode the entire monetary and financial system of the planet. I named the bond bubble and bonds that trade at negative yield! People pay to have those bits of paper that will not pay them anything.

For example, “investors” bought one-month-old three-year bonds issued by Veolia at a negative rate. These “investors” pay 0.026% a year to hope to see their money back in three years.

Here are the European countries that “investors” agree to pay for these states to keep their money.

yields 2 years Yields

Bloomberg source

I write “investor” but these bipeds who agree to lose for sure money deserve this qualifier?

I’m told that they can win because they can sell their securities to the central bank which will buy them more expensive than what they paid. Or because the rates will go down again (in the bond market, the lower the rates, the higher the securities go up).

Bitcoin $ 494 billion to date.
Negative yield bonds $ 8,000 billion *

The bitcoin bubble is an amiable joke joke. Speculative frenzy and madness are elsewhere. And governments and central bankers are in the front line.

* According to Deutsche Bank’s calculations, 17% of bonds issued are trading at a negative rate

-Read more at (French)-

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