Margin Call: Why the Next Market Crash Will Be Worse Than Anticipated via Mike Maloney (Video)

Last week Mike Maloney unveiled his new indicator, the Market Fragility Index, to the public. Today he shows us a recent discovery that helps explain why the cracks in the financial system are growing larger every day, and why the next market crash will be far more devastating than anyone has anticipated.

Thousands Of Affordable Gifts For The Outdoors-man On Your Christmas List 

The current US economy is like 100 cars flying down a fog-shrouded highway at 80MPH with two feet of visibility. Everyone is all-in, bullish as can be, and simply hoping against hope that nobody in front of them hits the brakes. The Federal Reserve is the communal foot on the gas. Their massive QE campaigns have injected titanic liquidity into risk assets and kept the stock market free-floating into bubbled-out valuation territory for years on end.

And by pursuing a zero (or nearly zero)-interest-rate policy for the better part of a decade, corporations and consumers alike were heavily incentivized to leverage themselves to the extreme. After all, if you’re a household, the perceived risk of additional debt is usually measured in how much interest you’re going to have to pay on it. When those amounts are being calculated based on a fed funds rate near zero, borrowing $50,000 doesn’t cost much more than borrowing $5,000. Until rates go up. Likewise, corporations will seek to borrow every penny they can when it’s next to interest-free: it’s easy to justify rampant business expansion or increased marketing campaigns with lowest-in-history cost of capital. And those companies who are floundering so badly that they can’t generate any profits at all require this same cheap debt simply to pay for their past debt obligations, while their operational results continue to decay.

These are the zombie companies that a free market, absent nanny-state-provided, easy-money-policy loans, would have been unceremoniously driven out of business long ago. What’s more, the federal government is now incredibly dependent upon stock market capital gains taxes for overall tax revenue. If the market corrects substantially and most investors lose money, there goes a giant chunk of US federal income that already falls well short of being pay for all of our current-year outlays, let alone coming anywhere close to being able to start paying off the massive debtload we’re already incurred..

Smart Preppers Shop Here!

Thousands Of Affordable Gifts For The Outdoors-man On Your Christmas List 

I host the Church of Mabus radio show and it is going on 8 years. I’ve been in the paranormal community for 20 years. I provide content from a network of sources and guests and allies. Ranging from Politics to the Paranormal and the Spiritual. You can check out my other articles here at my BIOGRAPHY at BIN and you can check out my free radio show at this link HERE. Thanks for showing your support and stopping by.