親愛的讀者們，
我曾多次嘗試描繪市場和經濟中真實發生的故事。
我過去信件中寫的許多內容——包括在他當選前一年預測Trump會獲勝——都已成真。
今天，我將簡化我的預測。
雖然你不應將其視為金科玉律，但你確實應該意識到，我所描繪的情景——無論多麼極端——都有很高的可能性會發生。
事實上，如果認為極端情況不可能發生，那將是相當不明智的——尤其當「極端」一詞恰好可以形容我們當前的金融和政治局勢時：
- 極度分化的房價與工資比（想想不平等）
- 債務水平極高，且持續攀升，卻不考慮未來如何償還
- 儘管基本面不佳，股市仍屢創新高
- President Trump領導下極度分裂的政府
- 極度分裂的美國
- 極度分裂的世界
當我們接近現代文明的極限時，最終的結果將是金融系統的徹底重置——政府的徹底重置。
我並不是說這會很快發生，甚至不確定是否會發生。我只是說，當社會達到頂峰時，這是不可避免的結果。
上個月，我談到了世界如何圍繞著Fed及其inflate/deflate週期運轉。
如果你還沒讀過那封信，可以點擊這裡閱讀。
我認為Fed已經經歷了「inflate cycle」，目前正在為隨之而來的deflationary cycle做準備。目前尚不清楚這會多快發生，但如果Fed deflates過快，我們將會目睹一場極端的全球經濟和金融reset。
問題是：我們正處於這個時代的巔峰嗎？
今天，我想描繪我們當前的圖景，讓您一覽無遺。
它會像這樣發展（其中許多點相互重疊）：
1. Inflate: 透過Quantitative Easing (QE)和低利率提供廉價資金，讓人民感覺良好——增加貨幣供應。
2. Deflate: 透過Quantitative Tightening (QT)和提高利率收回廉價資金，帶走良好感覺——減少貨幣供應。
3. Control: 透過轉移人們對真實情況的注意力來壓制民眾。想想媒體控制；想想鴉片類藥物使用量的增加和大麻合法化；想想President Trump；想想億萬富翁資助的抗議活動。
4. Divide: 透過煽動暴動和仇恨犯罪來隔離社會。
5. War: 透過戰爭言論，甚至戰爭本身，掩蓋國際金融和經濟危機。
6. Reset: 全球經濟reset將歸咎於戰爭；而非強大精英的貨幣行動。
1. Inflation: The Give
自Fed透過全球Quantitative Easing增加貨幣供應以來，目前各國央行資產負債表上已有超過US$15 trillion的主權債務和股票。
此外，超過$5 trillion的investment grade bonds以負利率交易，而全球最大的股票市場——US equities——已膨脹至歷史新高。
房價也在上漲，生活成本到處飆升。
事實上，如果你住在US並領取最低工資，你在任何一個US州都負擔不起2-bedroom apartment：
只有0.1%的US最低工資工人能夠負擔1-bedroom apartment，而不會被政府稱為「burdened」。
看看一個最低工資工人需要工作多少小時才能負擔1-bedroom apartment：
透過更多的債務。
這正是家庭債務持續創下新高的原因。
今年第一季度末，未償抵押貸款總額超過US$14.4 trillion——比2008年第二季度創下的近$14.8 trillion的歷史新高少了約$300 billion。
實際上，我們可能會更快達到。
為什麼？
回想我六月份的Equedia Letter，「What Happens When the Financial Bubble Pops」：
「…就在幾週後，數百萬Americans將獲得credit scores的人為提升。
…credit bureaus的一個簡單改變——而非borrower habits——將在一夜之間提升12 million Americans的credit scores。
這種提升的影響已經顯現，並即將引發新一波的consumer credit。」
這聽起來可能不多，但讓我向您展示這會造成多大的損害。
如果這12 million Americans中的每個人都因為更好的credit scores而被允許借款US$1，那就是$12 million的新債務。
如果他們每人借$10，那就是$120 million。
如果他們每人借$100，那就是$1.2 billion。
如果他們每人借$1,000，那就是$12 billion。
如果他們每人借$10,000，那就是$120 billion。
如果他們每人借$100,000（例如抵押貸款），那就是$1.2 trillion。
所有這些債務都是透過low interest rates發行和正在發行的。
但儘管corporate和consumer debt都在balloon，Fed預計將使所有這些money更expensive…
2. Deflate: The Takeaway
六月，Fed宣布將slowly increase rates和slowly reduce the money supply。簡而言之，它正走向deflating。
再次回想我June Letter，當Fed deflates時，歷史上都會觸發recession：
「歷史告訴我們，當Fed lowers interest rates和increases the money supply時，economy booms；當Fed raises interest rates和decreases the money supply時，economy shrinks。」
正如最傑出的bond managers之一Bill Gross最近所說：
「Most destructive leverage——正如pre-Lehman subprime mortgages所見證的——發生在yield curve的short end，因為debt holders的monthly interest payments成本顯著增加。
雖然governments和U.S. Treasury能夠負擔additional expense，但levered corporations和individuals在許多情況下卻無法負擔。
Such was the case during each of the three recessions…But since the Great Recession, more highly levered corporations, and in many cases, indebted individuals with floating rate student loans now exceeding $1 trillion, cannot cover the increased expense, resulting in reduced investment, consumption, and ultimate default。
Commonsensically, a more highly levered economy is more growth sensitive to using short term interest rates and a flat yield curve, which historically has coincided with the onset of a recession。」
如果Fed在未來幾個月和幾年內確實從系統中抽走更多資金並「normalize」rates，我毫不懷疑這將觸發recession。我們目前的大部分債務，尤其是consumer debt，都是由於low rates和easy lending而ballooned。
當rates rise和the cost to service that debt becomes too great時會發生什麼？
想想過去五年中以low-interest rates辦理massive mortgages的所有人。A small increase in interest rates could significantly increase their mortgage payments。
此外，當Fed raises rates和reduces the money supply時，it reduces consumption which leads to unemployment。How will the unemployed pay for the massive mortgage they took out？
這是一個已經lingering for years的問題。我知道。你知道。Yet people continue to financially overextend themselves。
How is that possible？
3. Control: Look Over There, Instead
蒙蔽社會，使其看不到即將發生的真實經濟和金融災難的訣竅，就是壓制社會中的人民。
During the Roman era，the rulers did this through Gladiators。
Today，the rulers do it through sex-filled media, alcohol, and drugs。They take the focus away from the real economic dangers by giving us other things to talk about: fake news, marijuana legalization\
本報告稍後將提供一項重要投資更新。
看看2016年America’s top news publications中最受歡迎的新聞報導：
USA Today: Alligator kills toddler at Disney
NY Times: Why You Will Marry the Wrong Person
And the most watched video in 2016? Adele’s Carpool with James Corden。
政治領域也沒什麼不同——focusing on everything but politics。
Lastly, as I mentioned before in a previous issue, America is in the middle of a massive opioid crisis。But we should ask ourselves: Are drug problems the result of a strong, booming economy, or the opposite？
Opioids are the strongest kinds of painkillers。And when do we take painkillers？
When we’re in pain…
4. Panic: Divide and Conquer
When the rich grow richer and the poor get poorer, riots, protests and the alike ensues。
三年前，我寫了一封關於US日益緊張局勢的非常重要的信件，以及racial和prejudice tensions如何被點燃，以distract us from the real problem at hand：
「Do we all need a reminder that during the financial crisis, politicians socialized losses, while allowing banks to privatize profits？
Do we need to be reminded that our rulers the government extended historical amounts of money to the banks who were the cause of the financial crisis, but did little to help the people who lost their jobs, homes, and families？
This is exactly what “they” want。They want us to be blind to the real problems in our society。And they do this by pitting us against each other; by using race as the focus of inequality, rather than economic inequality itself。
That’s because racial inequality pits one group against another, whereas economic inequality pits citizens against the rulers of an empire。
The more focused we are on racial inequalities via the Donald Sterling or Ferguson events, the less focused we are on the real inequalities separating America。」
Unfortunately, these types of hate-filled segregation scenarios, pitting Americans against each other, are getting worse。
」 Hundreds of white marchers with blazing torches clashed briefly with counter-protesters on the Charlottesville campus of the University of Virginia on Friday, the eve of a rally planned by thousands of white nationalists, media said。」
「Violence erupted on Saturday as hundreds of white nationalists had gathered here for a rally and clashed with counter-protesters, resulting in at least one death and prompting the governor to declare a state of emergency。」
And it’s not just Black vs. White。Protests are spreading everywhere in America。
According to the Washington Post，more people protested in June than any other month since January。
It’s no different here in Canada。Just take a look at the recent Vancouver protest。
「…Plans for the far-right demonstration began circulating on social media earlier in the week, not long after a deadly white nationalist march in Charlottesville, Va。
…According to a Facebook page for the event, the rally is protesting Islam and the Canadian government’s immigration policies。The page is no longer live, but the demonstration was expected to begin around 2 p.m. PT。
By 3 p.m., a handful of far-right protesters appeared to have gathered。They held confederate flags and the “alt-right” symbols for Pepe and Kekistan。One wore a shirt in support of U.S. President Donald Trump。
…Counter-protesters…streamed into the city hall area – as well as the nearby SkyTrain station and surrounding streets – around 12:45 p.m. PT。」
我寫下這些是因為它顯示了任何人散播負面情緒和煽動群眾是多麼容易。它顯示了影響群眾是多麼容易。
我並不是說這些抗議活動是策劃的，但我想說的是，我們應該意識到America的許多抗議活動都是由billionaires和其他wealthy groups資助的。
為什麼？
Racial inequality pits one group against another, whereas economic inequality pits citizens against the rulers of an empire。
Turns out, most of those protesting might not even really know why they’re protesting。
As Tina Lovgreen tweeted it best when she said “Sounds like more of a party than a protest。Listen:
聽聽她的Twitter貼文，然後告訴我你的想法。
點擊這裡分享您的想法
All the while geopolitical tensions grow increasingly worse。
5. War: The Ultimate Bait and Switch
In 2013, I warned in my Letter, “ A Nuclear Threat，” that the N. Korea threat was real。
More importantly, I warned of N. Korea’s involvement with Iran：
「…While you may have heard about North Korea’s threats, the media hasn’t told you the scariest part: Iran’s involvement。
Open Source Intelligence (OSINT) is now suggesting that as many as 100 Iranian nuclear weapons technicians and scientists are now in North Korea after an agreement was signed last year between the two countries that focused on scientific and technological cooperation。This comes on the heels that news of last month’s rocket launch was assisted by Iran。」
Then in 2015, I warned in my Letter, Nuclear Arms Race Threatens the World, of N. Korea’s ability to deliver an intercontinental ballistic missile capable of delivering a nuclear warhead, all with the help of Iran：
「…While officials and analysts in the U.S. and South Korea continue to downplay how close North Korea has come to acquiring a nuclear weapon small enough to be put on a missile or even its ability to deliver a nuclear warhead on an intercontinental ballistic missile, there’s something they haven’t mentioned: North Korea has help。
…Iran and North Korea have been working together on numerous ballistic missile programs, going back to the eighties。
So while North Korea may not have the resources or the know-how to create a nuclear weapon, Iran certainly does。
Here’s the scary part: Iran has already been working on atomic weapons and advanced implosion technology that’s small enough weapon to fit on – you guessed it – North Korean-supplied ballistic missiles。」
Fast forward a few years later and the media is finally catching on。
「…Iran’s official IRNA news agency reported Kim Yong Nam, head of North Korea’s parliament, arrived Thursday for the weekend inauguration of Iranian President Hassan Rouhani。
…But given he is expected to stay 10 days, the trip is being seen as a front for Pyongyang to perhaps increase military cooperation with Tehran and to boost the hard currency for the dynastic regime led by Kim Jong Un。」
While the focus is on N. Korea, let’s not forget that Iran is also a major threat。If Iran can give N. Korea nuclear capabilities, then surely N. Korea could just as easily give Iran intercontinental ballistic missiles。
How will the U.S. deal with an attack coming from both N. Korea and Iran at the same time？
And while that is going on, the U.S. continues to advance in the South China Sea, where US$5 trillion worth of cargo cross every year, aggravating China in the process。
Just last week, Reuters reported that a U.S. Navy destroyer carried out a “freedom of navigation operation”, coming within 12 nautical miles of an artificial island built up by China in the South China Sea。
It was the third “freedom of navigation operation” during Trump’s presidency。
The tensions are growing and I don’t see any of these countries backing down。
Which means the reset is already in motion…
6. Reset: Already in Motion
Nothing goes up forever。Not stocks, not the economy, not civilization。
I believe the next stage – although the exact time has yet to be determined – is a prolonged period of stagnation, recession, or depression。
Anytime society goes through such drastic changes, war included, people begin to accept different forms of political policies。
During the Great Depression, we saw the New Deal by President Franklin Roosevelt。
These included drastic changes including Roosevelt’s Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent。
It also included the end of prohibition – which, some may argue, that marijuana legalization\
I have given you many reasons why I expect a reset – a New Deal – to happen。I have even talked about the idea of free money, dubbed basic income, many years ago before governments of the world announced it would be testing such theories。
But if you aren’t convinced, consider the following：
In 2009, the Trustees Report indicated that the value shortfall, or unfunded obligation, for the Old-Age and Survivors Insurance and Disability (OASDI) Trust Fund program was about $15.1 trillion。
Today, the latest report shows that value has risen to $34.2 trillion – more than double the amount less than 8 years ago。
Just how are Social Security and Medicare mostly financed? Payroll taxes on earnings paid by employees and their employers and income from investments。These investments are comprised of U.S. government bonds, which are directly affected by interest rates。
In other words, the only way to service Social Security is to have higher taxes and higher interest rates。
Meanwhile, there is around US$1.4 trillion in US student loans, and nearly 40% of borrowers are either in default or more than 90 days past due。
As Trump has already alluded: it’s time to renegotiate debt。
Or, rather, it’s time to reset。
姑妄聽之
We can’t be sure when the Fed will raise rates, nor be sure if they will raise rates at all。
For all we know, the Fed may decide to do the opposite and extreme, like QE5。
For all we know, the Fed doesn’t have to reduce its balance sheet。Why would they have to when it’s all just a matter of accounting？
This Letter merely represents one unbiased perspective – there are many others。
尋求真相，
Ivan Lo
The Equedia Letter
www.equedia.com
