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\\n \\t* The carnage in global stock and bond markets continues; it really got started last night in Japan
\\n \\t* The JGB (Japanese Government Bonds) dropped for the 3rd consecutive day
\\n \\t* The biggest 3-day drop in bond prices in Japan in over 3 years, so yields surging, along with the Japanese yen
\\n \\t* Of course, this is not supposed to be happening because they\'re doing more stimulus and they\'ve got negative interest rates, yet the Japanese yen is appreciating anyway
\\n \\t* The Reserve Bank of Australia also came out last night and cut interest rates to 1.5%
\\n \\t* That is an all-time record low
\\n \\t* Why did they do that? Is it because there\'s not enough economic growth in Australia?
\\n \\t* Are they trying to revive a slumping property market
\\n \\t* They\'ve got a bubble in the real estate market - there\'s no valid reason for cutting interest rates from already low levels
\\n \\t* The actual reason that the Reserve Bank of Australia gave for the rate cut was that inflation was not high enough
\\n \\t* It\'s about 1%, the way they measure it, and their goal is to have it between 2 and 3%
\\n \\t* In other words, the cost of living is going up by 1% a year and the Reserve Bank of Australia says, "That\'s horrible! We need to make sure that things get at least 2-3% more expensive this year and we\'re going to slash interest rates to make sure that happens."
\\n \\t* Of course, when you do that, you have all sorts of risks, and what is the payoff?
\\n \\t* Why is the cost of living going up 2-3% better than it going up 1%?
\\n \\t* What\'s wrong with the cost of living not going up at all?
\\n \\t* How about if it actually went down?\\xa0 What if people could actually buy the things they need for less money?
\\n \\t* What\'s horrible about the standard of living actually going up?
\\n \\t* Of course, the real risk is, what if inflation goes from 1% (at least the way they measure it) to 4 or 5%?
\\n \\t* Was it worth it? Now you have an inflation problem on your hands
\\n \\t* If you\'ve got 1% and you want 2% - You\'re close enough!
\\n \\t* Obviously this has got nothing to do with inflation, they\'re simply trying to stop the rise in the Australian dollar
\\n \\t* But the Australian dollar went up anyway!
\\n \\t* They\'re trying to keep it down because they have this Keynesian world view that a weak currency is good and a strong currency is bad
\\n \\t* But we\'ve got to an inflection point where the central banks are losing this battle
\\n \\t* The yen is rising despite the efforts to suppress it
\\n \\t* The Aussie dollar went up, despite efforts to suppress it
\\n \\t* The problem is, the U.S. economy is a disaster
\\n \\t* We got the terrible GDP numbers, and we got a lot of other bad economic news today
\\n \\t* We\'ve got a lot more bad news coming out later in the week
\\n \\t* We might get a horrific report on non-farm payrolls
\\n \\t* We got that surprise good number last month, but who knows? We might revise that down and come up with another disappointing number on Friday
\\n \\t* But the Fed, instead of acknowledging this, are still talking about rate hikes
\\n \\t* In fact a Fed official just yesterday said the market should not rule out the possibility of a rate hike in September
\\n \\t* First of all, if the economy comes roaring back (no chance that\'s going to happen)
\\n \\t* Even if it comes back, they didn\'t say they WOULD raise interest rates, they said they might
\\n \\t* Which also means they might not
\\n \\t* It doesn\'t matter what happens to the economy, they can\'t raise rates
\\n \\t* The economy is not getting better
\\n \\t* We are either in recession or on the cusp of one
\\n \\t* And the data continues to prove that, but the Fed continues to talk as if they\'re thinking about raising rates
\\n \\t* That is part of the problem, because if the market doesn\'t believe that the Fed is coming to the rescue...\\n\\nOur Sponsors:\\n* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.com/ \\n\\nPrivacy & Opt-Out: https://redcircle.com/privacy'