Dow down −1,031.61 (3.56%),S&P 500 down −111.86 (3.35%) and NASDAQ falls by −355.31 (3.71%) on Monday's trading as the threat of coronavirus finally hits an overleveraged Wall Street.European and Asian markets get walloped also.

But will first world central banks allow a sustained sell off.Hell No.The US Fed,European Central Bank,Peoples Bank of China (PBOC) and Bank of Japan will unleash new oceans of liquidity (bigger than what they are doing now) to revive the markets.

US futures markets already point to a higher open.The Plunge Protection Team via the Fed will inject tens of billions of dollars in new money via the repurchase agreement market today and give it to the 6 Wall Street mega banks ie JP Morgan,Citigroup,Bank of America Merrill Lynch,Wells Fargo,Goldman Sachs and Morgan Stanley who will buy back the market.Then the investors who are short the market due to sell off jana will be short squeezed and panic to cover their shorts in a short covering rally hence its highly likely US equity markets will bounce back and who knows close at all time highs this week.



US bond markets also rallied with the 30 year bond hitting all time low yields OF 1.8% and all time high bond prices yesterday.US yield curve continues to invert as 1 month t-bill yields 1.57% while 10 year yields 1.39%.Nuts that a shorter dated treasury yields more than a longer dated treasury but its the silly nature of US markets.This is despite Fed buying 60 billion/month in shorter dated treasuries to uninvert the yield curve.All prior yield curve inversions in the US bond market have 100% predicted a US recession.Worse Eurozone and Japanese bonds sink deeper into negative yields as governments are being paid to borrow money as opposed to the reverse that is the norm.Trump wants negative yielding bonds in US so that investors lose money in buying them and governments gets paid to borrow money like in Germany but long term ends in catastrophe



https://www.cnbc.com/201...id-to-borrow-money.html

US Central Bank ie the Fed money printing shenanigans.The European,Chinese and Japanese Central banks are even worse in the percentage amount of electronic new money creation schemes relative to their GDPs.

Opus Dei cannot pull off a Fed type money printing scheme without hyperinflating the Kenya Shilling.The Fed and developed markets central banks can massively expand the money supply without experiencing instant hyperinflation since their currencies are always in demand in global markets.The US Dollar with its status as the reserve currency can quintuple its base money supply since 2008 meltdown but not crash as the USD is the lynch pin of global reserves and trade.80% of global trade is done in US dollars (for those who know the petrodollar system),60% of global central banks reserves are in USD,there is 11 trillion of dollar denominated debt outside the US so for now the Fed can print almost to infinity and the global economy will absorb the dollars.In fact now there is a USD crunch as foreign nations seeking dollars to bay back their USD denominated debt and the current flight from other major currencies like the Euro,Yen,Yuan that have printed even more money than the Fed relative to their GDPs is keeping the USD stronger relative to other fiat currencies.

This massive global demand of the USD and other major currencies enables the first world central banks to break rules of conventional economics.Its nuts that ever since 2008 crash,the first world central banks are explicitly buying treasury bonds.For instance the US treasury issues bonds to fund its obligations,the 6 Wall Street Banks plus other primary dealer banks buy these treasuries then they sell them to the Fed.The Fed creates new dollars from nothing and buys these bonds from the Wall Street Banks at a profit to the banks.The Wall Street banks then buy their own stocks or other US stocks pushing markets even higher and also loan to their hedge funds,private equity buddies and other major corporations like IBM,Tesla etc at ultra low rates then they buyback their own stocks pushing markets even higher.This entire mechanism is called Quantitative Easing (QE) and its responsible for the massive bull market in US stocks and bonds to all time highs.There is massive inflation from all the new Dollars but it doesnt go into consumer products yet but asset prices of stocks,real estate and bonds.Its no wonder US stock indexes like the S&P 500 have gone up 5 times ever since the 2008 crash as money supply has increased also 5 times.Inevitably this money will leak into consumer prices then things get really nasty.

Europe and Japan are even worse than the Fed.The European Central Bank (ECB)is more reckless than the Fed and buys even corporate bonds in addition to government treasuries.For instance Nestle,Unilever float bonds and ECB creates new Euros and buys them.Swiss and Japanese central banks are worse than this.Japanese central bank (BOJ) explicitly buys Japan's stocks and in the biggest holder of the Nikkei stocks plus has bought over half the Japanese treasury market.Swiss central Bank buys US stocks especially Tech stocks like Apple and Facebook.The ECB and BOJ have bought so many government bonds that treasury yields in the Eurozone and Japan have gone negative thus investors who buy these bonds and hold them to maturity are guaranteed to lose money hence investors in Europe and Japan flee these bonds to buy US bonds that have a paltry treasury yield of less than 2%.

Should CBK do the same?It would be interesting to see if CBK starts buying bonds that the Treasury floats and possibly engage in misbehavior like in Europe and Japan and buy corporate bonds and even buy stocks from newly created Kenya Shillings.If,Opus Dei did this Safaricom stock would trade at 1,000 KES our bond yields would drop to near zero or even negative yields,loan interest rates for mortgages and other loan facilities would drop to 5% and below (some mortgages in Denmark have negative interest rates) just like in the advanced world then Kenyans would go on a borrowing spree,buy houses just like in the US sub-prime debacle then the debt overhang would implode just like the 2008 housing crash.So it would create a sugar bubble high that inevitably crashes but by then the Kenya Shilling would have long hyperinflated.

So no Opus Dei shouldn't engage in such shenanigans and anyway the KES is too weak in global markets to successfully pull it off without hyperinflating the KES.

The developed world central banks have been very "smart" with their QE scheme thus far to ensure it doesnt leak to general consumer prices to a large extent at least for now.A vast proportion of these QE money sits in commercial banks balance sheet as excess reserves and the remainder they lend to their other rich elite buddies like hedge funds.private equity and corporates at ultra low rates to fuel asset price inflation of stocks,real estate and bonds as opposed to general consumer price inflation.To achieve and maintain the ultra low rates the developed nations central banks have to keep printing money and buy government bonds to suppress rates from newly created fiat.Kenyans are jealous of low loan rates in the West e.g. mortgage rates of 5% and below assuming its because Western markets are mature unlike high rates in Kenya but the caveat is Western central banks are buying bonds to suppress interest rates.If their central banks werent engaging in QE,rates in the developed world would be much higher and considering their ludicrous debt to GDP ratios US Debt to GDP ratio is 106% (possibly 1000% if you factor in unfunded liabilities,corporate and household debt),Japan is 250% and China a whooping 300% Debt to GDP so if the US as an example had like our CBK rate of 8.25% debt payments would be impossible and they would implode into a deflationary Armageddon.

As simple illustration of the debt bubble in advanced nations and why they are forced to print money to keep rates ultra low is shown by this simple video.



Also money velocity ie the rate of flow of money in the economy within the general populous is low causing relatively muted consumer inflation but recently the inflation is leaking out to consumer prices.Western central banks target an inflation rate of 2% and purport that inflation is less than 2% to justify their money printing shenanigans.They measure their inflation rate less food and energy in the inflation basket (totally ridiculous) to achieve their less than 2% inflation rate.Ideally inflation should be 5% and higher and recently even with the cooked inflation figures,the US inflation rate has surpassed the 2% target and if the money printing continues consumer inflation will go wild.

Bure kabisa huyo Gov.