Bubble Thesis presented by Paul Craig Roberts.
1) Stock Market: The Fed can support high stock prices by having banks buy up stock futures with currency that is printed into existence at near 0% interest rates. Fed is pouring liquidity into the banks and banks are using liquidity to speculate on stocks. This is creating a bubble since the supply of new dollar printed are printed at a rate that far outweighs the demand for these dollars.
2) Bond Market: 1 Trillion of new debt is bought by Fed each year. The Bond prices are so high,real interest rates are negative, if the USD dollar gets in trouble, if the fed raised interest rates with all the debt in the system, it would collapse the stock and bond markets.No choice here but to keep printing.
3) USD Market: The USD exchange rate is unstable, because the supply of new $$ is rising to fast to the demand for them on exchanges. Example, China did a deal with 2 Australia banks to not convert to USD and bypass it as a medium of exchange. YUAN and AUD now can trade direct, indicating an aversion to holding USD.
His book is here Link:
About Dr. Paul Craig Roberts
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Where to flee if a bubble bursts...
Resources in the ground. Precious metals in your hands(not paper).
Real estate is the last bubble to pop, so land and housing is still viable but do your homework. Oil will fair well, as will niche food plays and anything that is a hedge against inflation, even BTC isn't out of the question.