We have reached a critical crossroads in the world economy. May 7th, 2024, was a profound turning point that changed the course of events as they are starting to unfold. We will be covering Europe, economically and geopolitically, and the rush for a war that will justify not just digital IDs, but capital controls; they will restrict capital outflows, not just wage and price controls or rationing as they did in previous wars.
Like the 2015.75 peak when Russia went into Syra and the German Chancellor Merkel stood up and opened the gates to “Syrian” Refugees, which turned into the invasion from the Middle East and Africa looking for the freed everything but did not assimilate into the culture, but brought their own and has changed Europe Dramatically. While politicians have been allowing the flood of migrants in both Europe and America to firm up their political control, they may believe this will keep the unproductive socialistic agenda and their power, but they have undermined our culture and destroyed our very foundation of who we are.
A new report will be issued covering the Migrant Crisis, tracking the same decision that took place in the Roman Empire during the 3rd century when Emperor Valens also opened the border. What was unleashed was not just civil unrest but civil war.
Now, look closely at this chart, which shows the shift from PUBLIC to PRIVATE (corporate AAA vs US 10 Yr Treasury). In 1984, the NY bankers lent billions to Argentina, which was going into default. They owed $43 billion at the time when a billion was today’s trillion. Because the US Treasury stepped in to bail out the banks, the CONFIDENCE in US Debt suddenly dropped sharply. The flight to qualify was inverted and ran into AAA corporate debt—neutral from bankers and the government. This is what I am talking about in the shift from PUBLIC to PRIVATE. Note that the premium has been declining since 2009.
Because we are facing a Sovereign Debt Crisis, will this alter the view of Commercial Real Estate? Everyone is looking at that sector blowing up banks. They are also not paying attention to government debt, assuming it will always be the flight to quality. History proves that assumption is wrong and could cost you everything.
We will be discussing these issues and more at the London Conference next weekend. I scheduled this specifically to address the ECM turning point of May 7th and the trend from here into 2026 and thereafter into 2028.
