(FT) “If you think people were upset about bailing out banks where the CEOs were making $50m a year, how are they going to feel about bailing out private equity firms where the CEOs make $500m a year?” said another investor.” Read morehttps://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4
Check out some of these junk bonds from SGMS's 2019 annual report.
As you can see, rates can run as high as 10% per annum, meaning on just $1 billion in principle, the note holder will realize $100 million in profits every single year.
Does it seem fair for a PE fund to have the right to collect $100 million in interest every single year without taking any risk?
Michael Every of Rabobank: “when money gets printed, those closest to it within the institutional structure get to skim the cream, and those farthest away get none”
“Aggregate assets of the Group of Ten (G10) central banks have increased by about $6 trillion since mid-January, more than double the increase seen during the two years of the global financial crisis from December 2007, with the rise in assets accounting for almost 15 percent of G10 GDP”, IMF GLOBAL FINANCIAL STABILITY UPDATE (June, 2020)
Should we really be all that surprised by this outcome? Think about it for a second: there’s currently a broker (investment banker) and a trader (stock exchange) occupying the top two board positions at the New York Fed; the very people who stand to gain the most from unadulterated money printing and excessive stock market volatility.
Key Points From Stephen S. Roach on Dollar Debasement
-During the financial crisis of 2008, the personal savings rate collapsed into negative territory for the first time ever, averaging -1.8% of national income from 3rd quarter 2008 until 2nd quarter 2010, but on June.8th, 2020, in a recent Bloomberg Op-Ed, Mr.Roach predicted that the savings rate could eventually fall by as much as -5% to -10%..Read more
– Still believes that the greenback is strong at this present moment, but could soon reverse by as much 35%, retesting July 2011 lows.
– Protectionism will result in higher costs as trade is diverted away from China
-In an interview with MarketWatch on June.23rd, he indicated that he believed dollar devaluation could happen much sooner than people might like to believe:
“I do think it’s something that happens sooner rather than later,”
“In a COVID era everything unfolds at warp speed”
Lastly, on Project Syndicate, he reiterated his 35% drop prediction, saying that it could happen within as little as 2-3 years.
“The dollar’s real effective exchange rate fell by 33% between 1970 and 1978, by 33% from 1985 to 1988, and by 28% over the 2002-11 interval“
Recent Fiat Money Printing Has Led to One of the Greatest Wealth Transfers in Human History
from Bitcoin – The Currency of the Internet