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Deutsche Bank: The Bubble Must Go On To Sustain The "current Global Financial System"

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http://www.zerohedge.com/news/2014-09-10/deutsche-bank-bubble-must-go-sustain-current-global-financial-system

When all is said and done, it all basically boils down to this: from Deutsche Bank's Jim Reid.

The bubble probably needs to continue in order to sustain the current global financial system
and the necessary future deleveraging. However with yields moving ever lower in many parts of the world in recent times, partly due to weak growth, and with debt levels still moving higher, the chances are that most government bondholders are unlikely to achieve a positive real return over the medium to long-term from this starting point. Inflation or even the risk of sovereign restructuring will likely prevent this.

So there you have it: either the bubble goes on, or the "current global financial system" gets it.

What is left unsaid is that it is only the "1%" who benefits from the bubble. The wealth and income of everyone else gets progressively less, as even the Fed has been forced to admit, until there is nothing left. And should the bubble burst? Why the central banks will just reflate yet another bubble, which translated in lay man's terms means steal even more from the global middle class and give to the world's richest.

Well it's a good job global central bank policy is to continue the bubble to keep the global financial system going.

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http://www.zerohedge.com/news/2014-09-10/paul-krugman-we%E2%80%99ll-only-feel-prosperous-during-bubble-periods

From Princeton Magazine:

Are bubbles good or bad and do we need them to create strong economic growth and reach higher levels of employment?

Bubbles are bad if you have an economy near full employment, where they divert resources from their proper use and set the stage for financial instability. In a depressed economy, even ill-conceived spending can help create jobs, so bubbles aren’t necessarily bad. There are reasons to believe that we’re facing an era of persistent economic weakness, which means that we’ll only feel prosperous during bubble periods.

* * *

New York’s minimum wage is currently $8 per hour. Germany is introducing a national minimum wage next year of 8.50 euros, equivalent to $15 an hour. Swiss voters recently rejected increasing their minimum wage to 22 Swiss francs or nearly $25 per hour. What would you like to see the minimum wage be in the US?

I’m for raising the minimum to something over $10 nationally, which would bring it back in real terms and as a share of average non-managerial wages to its level in the 1960s. High-productivity centers, like New York, could justify going higher.

How has studying economics at a Ph.D. level changed since you were a student?

I’m actually struck by how little it has changed. The basic structure of course-work that lays a foundation, followed by dissertation, is the same; the math and statistical level has risen, but it was already pretty high in 1975! The content of some fields has changed, of course, mostly though not everywhere for the better. On the whole, though, the structure both of education and of the career track for young economists has been remarkably stable. I think that’s starting to change now, as the web and the proliferation of think tanks shake up the sources of career success. But that’s just happening, after decades of stability.

Do you have any concern that mounting student loan debt will eventually impact the economy and housing market?

It’s already happening. Household formation is very low, and debt has to be part of the explanation.

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the chances are that most government bondholders are unlikely to achieve a positive real return over the medium to long-term from this starting point.

There you have it on interest rates guys.

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Can we have a rule that all zerocredibility threads be labelled as such, to spare us clicking on them.

Unlike some nonsense threads here, they're not even entertaining.

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http://www.zerohedge.com/news/2014-09-10/deutsche-bank-bubble-must-go-sustain-current-global-financial-system

Well it's a good job global central bank policy is to continue the bubble to keep the global financial system going.

...the key point for most of us..... "What is left unsaid is that it is only the "1%" who benefits from the bubble.The wealth and income of everyone else gets progressively less, as even the Fed has been forced to admit, until there is nothing left.".......

That is worrying ..... :rolleyes:

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...the key point for most of us..... "What is left unsaid is that it is only the "1%" who benefits from the bubble.The wealth and income of everyone else gets progressively less, as even the Fed has been forced to admit, until there is nothing left.".......

That is worrying ..... :rolleyes:

That's socialism for you. Only the Inner Party prospers. For everyone else it's the food bank or the gas ovens.

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"It is vital that we continue to give all of our money to the rich, otherwise the people whose job it is to give everybody's money to the rich will be out of a job."

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Hang on, so the 1% are socialists

Yes. You see whenever problems arise it's always the fault of socialists.

So Hitler was a socialist.

Stalin was a socialist.

The 1%ers are socialists.

The people at the bottom are socialists.

The man who ran over your cat is a socialist.

That guy who had an affair with your wife is a socialist.

If we ever get invaded by aliens they will also be socialists from the planet "socialism" which is located somewhere in a far-away socialist galaxy.

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http://www.zerohedge.com/news/2014-09-10/deutsche-bank-bubble-must-go-sustain-current-global-financial-system

Well it's a good job global central bank policy is to continue the bubble to keep the global financial system going.

I'm glad US regulators spoke out against Deutsche. Not sure they were so happy at having to comply with newer rules for capital holding for foreign banks trading/operating in the US. More recently critical of oversight and reporting (July 2014 )

http://dealbook.nytimes.com/2014/07/22/fed-is-said-to-criticize-deutsche-banks-oversight-and-reporting-efforts/

Jun 14, 2013

Exclusive: Deutsche Bank 'horribly undercapitalized' - U.S. regulator

http://uk.reuters.com/article/2013/06/14/us-financial-regulation-deutsche-idUSBRE95D0X620130614

There were negative T-bill rates in 1933, (and briefly in 2008-12 as I understand it). Great Depression, investors were not complaining. Best place to be versus everything else crashing in value.

Keep living in the dreamland of ordinary houses 'worth' £500,000+ houses, thinking you're hard done by, older complacent VI fools - expecting others to always suffer for you to be protected.

Edited by Venger

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Can we have a rule that all zerocredibility threads be labelled as such, to spare us clicking on them.

Unlike some nonsense threads here, they're not even entertaining.

It was Deutsche Bank who said it, not zerohedge.

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either the bubble goes on, or the "current global financial system" gets it.

What - and they'll all go off and work in somewhere like Dubai - is that what they're getting at.

They sound so Monty Python.

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Hang on, so the 1% are socialists

1989 was a banner year for capitalism, or so we were told. Some, like Fukuyama, naively argued that it was capitalism's final victory. Except socialism hadn't been vanquished in the 1980s, merely transformed. Into Chinese state-capitalism on the one hand, Japanese corporate gerontocracy and European federalism on the other. These variant forms of soft socialism prospered temporarily because of the globalist ambitions of Western govts and the connivance of criminal bankers but one-by-one they have resiled. And then 2008 happened, the inverse of 1989. A capitalist failure so great that it compelled the intervention of the state on an unprecedented scale and the wholesale embrace of Keynesianism as a reaction. And so, six years on, the renaissance of Keynes in the West and the faltering progress of state-capitalism in the East have created an intellectual framework filled with prices and incomes policies, public works projects and central bankers' five-year plans.

If it looks like a duck...

613px-1984_Social_Classes_alt.svg.png

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Guest Jemmy Button

Can we have a rule that all zerocredibility threads be labelled as such, to spare us clicking on them.

Unlike some nonsense threads here, they're not even entertaining.

Yes, let's shut down debate...You pompous *****!

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What - and they'll all go off and work in somewhere like Dubai - is that what they're getting at.

They sound so Monty Python.

I wish they would. Let them crash Dubai's economy and allow Sharia Law to punish them for it.

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