The Super Bubble will burst soon

Who observed the

economy of the
United States in recent
decades must have
noticed the cycle of
development and
downturn.
One calls these ups
and downs 'boom and
bust'.
Interestingly, this
cycle lasts 8 years, is
controlled by the
interest rate-policy of
the Fed and is
connected to the
election year.
The 'boom' began in
1995 through a variety
of start-ups of startup
companies in the IT
industry.
Everyone who wanted
to do something with
the term 'Internet' was

filled with money by investors to make in hope huge profits.

There was a veritable hysteria and stock prices rose rapidly.
Many jumped on the train, even people who had never invested in stocks.
From mid-1999 multiplied within a few months the stock market valuation of many companies.
Then came the disillusionment when it became realized that there imagined profits can not be, it was just
wishful thinking.
The dot-com bubble burst.
Parsifal, April 12, 2016
In February 2000, the Fed raised interest rates to 6.25 percent.
At the same time the first figures on a weakening economy came in.
The figures for the first quarter showed that consumers bought less, declining corporate profits.
While the US were adjusting on the next election, began the house of cards to collapse.
On April 12, 2000 the Nasdaq index plunged by 386 points, the biggest crash in history.
Wall Street lost almost a quarter of its value.
The boom of the 90's was a gigantic bust early 2000.
When Bush then 2001 came into office, the stock market had lost 60 percent of its value.
Clinton's 'economic miracle' was based only on a huge illusion.

The cycle proceeds as follows:

The interest rates are low and drives the bubble, in the 90's, the dot-com bubble.
Greed always prompts more speculators to invest their money in Internet shares, which inflates the bubble
even more.
They mean, with the rising prices, they become rich and it just keeps going up.
The hysteria is fueled by the media, experts, bankers and politicians.
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The Super Bubble will burst soon

Then happened something interesting.

Although there are signs of a weakening economy, the Fed raises interest rates on the justification to
somewhat curb the overheated market.
Then happened in the election year the crash of the market and the economy, the bubble bursts and most
speculators lose their money.
Again in detail:
1. There accrues a bubble because of low interest rates
2. Experts say all is well and the economy is growing
3. From greed many climb on the train and the bubble is getting bigger
4. The Fed begins to increase interest rates
5. Especially when the first bad numbers appear, interest rates are at their highest
6. The bubble bursts just before elections
7. The new president is to pick up the shard
That is, the financial elite is driving people with their money first in a bubble with low interest rates to make
then burst the bubble with a rate-increase and to pocket all the money.
This happens in a cycle of 8 years, the two terms of a US president.
Thus, regularly the assets of the population will be moved from the bottom up to the financial elite.
Was that only under Clinton so ?
No.
In June 2002, Bush announced the program, every American should have his own house.
Interest rates were low and have have distributed tons of mortgages without credit check to millions of
people.
It was created the housing bubble, the prices of houses increased and rose.
It was even so, speculators bought several houses on debt and thought to be able to sell more expensive.
This was called 'house flipping', namely buying on credit, selling after a short time at a profit, grab profits.
The Fed had driven down interest rates as described above from about 6 percent in 2001 to 1 percent of 2003.
Mortgages were so cheap, everyone wanted a house, what made prices rise.
The bubble in the housing market was established.
Then began the Fed to gradually increase interest rates until 2007, the interest rate was then at 5.25 percent.
This, many homeowners could no longer pay their mortgages, they had to sell their homes, the housing
market collapsed.
2008 was an election year, the next bubble burst and the biggest financial crisis with bank failures took place.
The above-described 8-year cycle was repeated during the tenure of Bush.
Lehman Brothers went bankrupt in September 2008 because it had bet too much on the mortgage and rising
housing market.
Many other banks in the US and Europe were facing bankruptcy and had to be rescued with taxpayers'
money, because they had taken part in the speculation in sub-prime mortgages.
The stock market crashed by 40 percent.
This time the whole world was affected and developed a world economic crisis.
The cycle was repeated:
1. The result is the real estate bubble by low interest rates
2. Experts said everything is going well and the economy is growing
3. From greed many climb on the train and the bubble to become large and larger
4. The Fed begins to increase interest rates
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The Super Bubble will burst soon

5. Especially when the first bad numbers appear, interest rates are at their highest
6. The bubble bursts just before the next election, this time it hits the world
7. The new president must pick up the pieces
Now we have after 8 years the end of the term of Obama.
2016 is an election year.
Let's see if the cycle takes place again.
What is the bubble this time ?
There are the derivatives, so the speculative bets on all possible financial instruments.
Since the last crisis in 2008, interest rates have been kept very low.
With this cheap money was invested heavily in derivatives.
The speculation was fueled insanely.
The Fed began to raise interest rates last fall.
In parallel, the American and the global economy started to weaken, which is clearly visible through the low
commodity prices.
Oil is as cheap as during the last crisis of 2008.
Therefore, the consumption in America is declining, the economy also.
What the experts say in recent months ?
Exactly the same as 2000 and 2008, everything is fine, the economy would grow, no reason for pessimism.
Now, however, the Fed of Atlanta released the latest GDP figures for the first quarter.
The growth is practically nil, only 0.1 percent.
The cycle has indeed repeated.
1. The result is the derivatives bubble by low interest rates
2. Experts said everything is going well and the economy is growing
3. From greed many climb on the train and the bubble is gigantic
4. The Fed begins to increase interest rates
5. The poor figures appear
What has not yet happened, the bubble is not implodes yet before the elections take place in November, but
we have only April.
On December 19, 2015 Donald Trump gave a speech in Cedar Rapids, Iowa where he warned for the first
time before the bubble burst.
He repeated this warning at various speeches.
He even said he hoped the bubble blows under Obama, and not under the new presidency.
Does not matter, the mess has either way to take the successor.
Only this time the crisis is taking gigantic proportions, 100 times greater than that of 2008.
We will see a collapse of the banks, which can look like the Great Depression of of 2008 a child's birthday.
Almost all banks will go bankrupt and thus erase all the savings, pension savings and insurance deposits.
Why ?
Because the greatest of all bubbles was created.
One has the 'too big to fail' banks given unlimited funds which they have used for speculation in derivatives.
How big is the derivatives bubble ?
According to Bank for International Settlements (BIS) in Basel, Suisse, the open derivative contracts
amounted to 553 trillion.
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The Super Bubble will burst soon

Yes, trillions not billions, so 553.000 billion.

For comparison, the total GDP of the world amounts to 'only' 78 trillion.
The derivatives bubble is thus 7 times greater than the value of the entire world !
The International Monetary Fund (IMF) expects a crash of the markets in the US, UK and the euro zone to 20
percent in the coming months.
Jose Vinals, head of the Stability Division of the IMF said, there are several factors involved, including the
huge 'loss of confidence in the markets', which would cause the crash.
How bad the situation really is, showing the latest result of the stress test, which NOT passed 7 of 8 major
banks.
There we have J.P. Morgan, Bank of America, Wells Fargo, Bank of New York Mellon, State Street Bank,
Goldman Sachs and Morgan Stanley.
There were two tests, one carried out by the Fed and the FDIC deposit insurance fund.
Five banks failed in two tests and two one test.
Only Citigroup passed both, which seems to me doubtful.
This biggest bubble in human history is about to burst, the super-bubble !
Are you prepared ?
published first in B.O.L.E.

The Super Bubble will burst soon