Are Rising Rates Setting a Debt Avalanche in Motion?

Bob Moriarty, Michael Oliver and Chen Lin return as guests on this week’s program.

Virtually every time the Fed has started raising rates, they continue to raise rates until something breaks. While a portion of the air is left out of the credit bubble that the Fed pops, they never go all the way in letting all the excess air out of those past mal-invested bubbles. Instead, they pile one bubble on top of another such that, over the past 60 years since gold was removed from the dollar, the Fed has created the greatest bubble ever! So, when this current bubble is broken it is possible that the financial system will be reset with a new global financial system. That’s because we know from experience that in a globally connected world financial distress in one market in a corner of the world can’t necessarily be kept from spreading. Global markets have been so distorted by the Fed and other central banks that have manipulated interest rates way below their free-market levels that even the smallest interest rate snowflake rise can be the next one to set the entire dollar-based financial system into a destructive avalanche.

Bob provides his insights into current events that may be set to break the system and we will seek his advice regarding how he believes we should prepare. Michael recently wrote that “This was not a controlled adjustment in rates. This is a collapse situation.” We asked him why he thinks a total collapse of the bond market is a foregone conclusion. Chen who has just returned from travels in Kazakhstan, Turkey and Finland tells us where he is investing his money during these troubled times.  

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Robert Moriarty was born in New York in 1946. He began training as a military pilot in 1965 and became the youngest Naval Aviator during the Vietnam War in 1966. With two years in Vietnam and some 832 missions in combat, he left the Marine Corps in 1970. He worked in computers for a few years before beginning a 2nd career as a ferry pilot delivering small airplanes all over the world. He made over 240 ocean crossings mostly in single engine airplanes. He holds 14 international aviation records.

Bob and Barb Moriarty brought 321gold.com to the Internet in 2001. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. 

Chen Lin had been a doctoral candidate in aeronautical engineering at Princeton. However, Chen found his investment strategies were so profitable that he put his Ph.D. on the back burner to devote full time to private investing and writing a newsletter titled “What is Chen Buying? What is Chen Selling?”  Chen’s track record has been phenomenal!  In one account we tracked, in which he used no leverage, he was able to grow $5,411 starting in 2002 to over $2.2 million by the end of 2012.  You can visit his website at http://chenpicks.com

Michael Oliver entered the financial services industry in 1975 on the Futures side, joining E.F. Hutton’s International Commodity Division, NYC. He studied under David Johnson, head of Hutton’s Commodity Division and Chairman of the COMEX.

In the 1980’s Oliver began to develop his own momentum-based method of technical analysis. In 1987 Oliver, along with his futures client accounts (Oliver had trading POA) technically anticipated and captured the Crash. Oliver began to realize that his emergent momentum-structural-based tools should be further developed into a full analytic methodology.

In 1992 he was asked by the Financial VP and head of Wachovia Bank’s Trust Department to provide soft dollar research to Wachovia. Within a year Oliver shifted from brokerage to full-time technical research. MSA has provided its proprietary technical research services to financial and asset management clients continually since 1992. Oliver is the author of The New Libertarianism: Anarcho-Capitalism. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.