A global recession is on the horizon - please read OP for mod warning

Hi, yea gladly.

The value that they have put on the bonds on their balance sheets does NOT reflect their current value. They are very much underwater. i.e. insolvent. Not bankrupt (and I know you understand the difference but for readers' benefit) but insolvent.

They don't mark to market and hence they don't realise the losses but yes they are very much underwater. Of course they can print lots more currency. And hopefully they do. As I am knee-deep in real money. Precious metals.

https://www.goldmoney.com/research/central-banks-are-now-insolvent

The value on the books ( balance sheet ) reflects the value paid not current value.

Secondly you have to understand what real "sovereign" debt actually is and why some of it is classed as " risk free "

It is not so much the countries who sold the bonds that are ****ed it is the ones who are sitting on it. Central banks, banks, pensions the whole shebang.

No, the sovereign debt is not insolvent. That's not possible (if it is, I'd like to hear how).

Its what it was bought for and priced at (or could be at a given time) by an individual holding entity that makes THEM insolvent. An instrument can't be insolvent. The CBS technically are. They don't mark to market and so they maintain the fantasy, as of today, that they are solvent. They are not.

When you ask is there something I know that the markets don't, its a tired clichéd question that is asked out outliers. Like many of the non-Western Central Banks of the world, I too am a part of the 'market'. I am heavily invested in precious metals, as are they on a macro scale (hey, even Ireland has bought over 2 tonnes of the money in the past 18 months). Gold being redsignated a Tier 1 asset having some bearing on Western CBs beginning to increase their gold buying (most gold buying done by all CBs this year versus previous 65 years). The question may be is there something that other players in the 'market', outliers, know that you and many others may not? The sands are shifting. Confidence in the dollar and also euro comes from externally not just internal confidence-shoring unfortunately.

Best of luck to all.

Sovereign bonds. Hence why the ECB implemented emergency powers last summer.

🤭🤭🤣

Precious metals are reality, its currency you should be far more concerned about. I defer to higher powers such as Zoltan Pozsar (Credit Suisse analyst), Alasdair McLeod (gold pumper as you are a monopoly money pumper), Ray Dalio (such a shyster) the late Scott Minerd, RIP (ex Fed, huge silver bug).

Highly possible to make mega money, and losses, in any market. Whether that be physical commodities, derivatives of commodities, crypto or bastardised currency. But you will find, quite shortly, that your 'mental map' of macro-economics is flawed, incomplete and suited a 50 year narrative that is fast running out of steam. The real world of 'stuff' is calling! The producers want their value back!! Hence the rise of the petroyuan and decline of petrodollar. No more CB fakirs working their magic (unless its alchemy at 20-40% backing 😉 ).

Ps not 'my' FT article though I have contributed elsewhere. Important to not make outlandish claims in the cut and thrust of keyboard warriorship.

It's what the ECB does, it responds, and enacts measures. Whether it's the pandemic or high inflation.

Why are these bonds considered the best tier 1 collateral that can be posted?

Good god indeed. You are not the first one to claim to know the future and it is everyone else that need to wake up! Take actions now! It is the end of the world. The same wording was used at the start of this thread and by now we were supposed to have thousands of people dying of cold across Europe, starving because of the food shortage.

What is your timeline for this disaster to happen so I can setup a reminder and check if you disappear like the other posters.

This is good to read no one needs a recession. As I said before this blip is totally different to last time, we’re gonna be ok

You will disappear, or just adjust your "predictions", seen it countless times.

When the 2008 financial crisis happened, we came perilously close to a real meltdown, it was a once-in-a-lifetime systemic crisis. An unfortunate by-product of it was that it has spawned a generation of doomsday merchants who see a crisis in every tiny piece of financial news. Like a bunch of broken clocks, they make all sorts of alarmist predictions, few if any turn out to be correct, a popular one on this forum last year was that we were all going to freeze this winter and be plunged into global starvation.

Back to reality, there will very likely be some form of recession in the future, but by current metrics and predictions there doesn't appear to a global recession on the horizon this year.

Until then, these individuals will continue to point at things, predicting doom.

The Fed's outgoing's have reached a little more than $20 billion per week. A big turnaround since interest rates have started to rise.

I don't disappear.

The generalisations in your post, DohnJoe, point loudly to you not being a finance professional. If you are, then I have the same genuine concern for your worldview as you dramatically display re mine. I am not a finance professional; I'm simply an investor. All-in on precious metals, backed up by 3 decades of market watching and 2 level 9s in finance, plus a level 7 in tax. So each to their own, Keynesian schmucks. Let's see if our current debacle is worse than 2008. I say it is, you say its not. Tick tock, 22nd June approacheth.

2019? Ouch, bad year to sell crypto. After a decade on and off managed to get a big chunk of my portfolio sold in 2021 (after very, very roughly predicting that bull)

Right. The bond market may be down due to inflation, but that doesn't mean "doom". Sovereign bonds are highest rated collateral that you or anyone (banks or central banks can post), after that supranational, corporates and then down the list to equities, and finally gold (although have never seen that used to collateralise modern bank activity like repo's, credit line activity, etc)

As mentioned, currently no signs of any systemic crisis or global recession (keyword: global). That could change, but right now, that's how it looks.

Japanese debt to GDP is the highest in the world, but historically BoJ rates have been very low

Lately BoJ is struggling to keep a lid on bond yields and the cost of refinancing Japan's enormous debt risks becoming incredibly cumbersome. Investors are spooked