EXPERTS ARE WARNING THAT THE 76 TRILLION DOLLAR GLOBAL BOND BUBBLE IS ABOUT TO EXPLODE

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Warren Buffett believes “that bonds are very overvalued“.

by MICHAEL SNYDER | ECONOMIC COLLAPSE | MAY 5, 2015

Warren Buffett believes “that bonds are very overvalued“, and a recent survey of fund managers found that 80 percent of them are convinced that bonds have become “badly overvalued“.

The most famous bond expert on the planet, Bill Gross, recently confessed that he has a sense that the 35 year bull market in bonds is “ending” and he admitted that he is feeling “great unrest”.  Nobel Prize–winning economist Robert Shiller has added a new chapter to his bestselling book in which he argues that bond prices are “irrationally high”.  The global bond bubble has ballooned to more than 76 trillion dollars, and interest rates have never been lower in modern history.  In fact, 25 percent of all government bonds in Europe actually have a negative rate of return at this point.  There is literally nowhere for the bond market to go except for the other direction, and when this bull market turns into a bear it will create chaos and financial devastation all over the planet.

In a recent piece entitled “A Sense Of Ending“, bond guru Bill Gross admitted that the 35 year bull market in bonds that has made him and those that have invested with him so wealthy is now coming to an end…

Stanley Druckenmiller, George Soros, Ray Dalio, Jeremy Grantham, among others warn investors that our 35 year investment supercycle may be exhausted. They don’t necessarily counsel heading for the hills, or liquidating assets for cash, but they do speak to low future returns and the increasingly fat tail possibilities of a “bang” at some future date. To them, (and myself) the current bull market is not 35 years old, but twice that in human terms. Surely they and other gurus are looking through their research papers to help predict future financial “obits”, although uncertain of the announcement date. Savor this Bull market moment, they seem to be saying in unison.It will not come again for any of us; unrest lies ahead and low asset returns. Perhaps great unrest, if there is a bubble popping.

And the way that he ended his piece sounds rather ominous

I wish to still be active in say 2020 to see how this ends. As it is, in 2015, I merely have a sense of an ending, a secular bull market ending with a whimper, not a bang. But if so, like death, only the timing is in doubt. Because of this sense, however, I have unrest, increasingly a great unrest. You should as well.

Bill Gross is someone that knows what he is talking about.  I would consider his words very carefully.

Another renowned financial expert, Yale professor Robert Shiller, warned us about the stock bubble in 2000 and about the real estate bubble in 2005.  Now, he is warning about the danger posed by this bond bubble

In the first edition of his landmark book “Irrational Exuberance,” published in 2000, the Yale professor of economics and 2013 Nobel Laureate presciently warned that stocks looked especially expensive. In the second edition, published in 2005 shortly before the real estate bubble crashed, he added a chapter about real estate valuations. And in the new edition, due out later this month, Shiller adds a fresh chapter called “The Bond Market in Historical Perspective,” in which he worries that bond prices might be irrationally high.

For years, ultra-low interest rates have enabled governments around the world to go on a debt binge unlike anything the world has ever seen.  Showing very little restraint since the last financial crisis, they have piled up debts that are exceedingly dangerous.  If interest rates were to return to historical norms, it would instantly create the greatest government debt crisis in history.

A recent letter from IceCap Asset Management summarized where we basically stand today…

Considering:

1) governments are unable to eliminate deficits

2) global government debt is increasing exponentially

3) 0% interest rates are allowing governments to borrow more to pay off old loans and fund deficits

4) Global growth is declining despite money printing and bailouts And, we’ve saved the latest and greatest fact for last: as stunning as 0% interest rates sound, the mathematically-challenged-fantasyland called Europe has just one upped everyone by introducing NEGATIVE INTEREST RATES.

As of writing, over 25% of all bonds issued by European governments has a guaranteed negative return for investors.

Germany can borrow money for 5 years at an interest rate of NEGATIVE 0.10%. Yes, instead of Germany paying you interest when you lend them money, you have to pay them interest.

These same negative interest rate conditions exist across many of the Eurozone countries, as well as Denmark, Sweden and Switzerland.

Negative interest rates are by nature irrational.

Why in the world would you pay someone to borrow money from you?

It doesn’t make any sense at all, and this irrational state of affairs will not last for too much longer.

At some point, investors are going to come to the realization that the 35 year bull market for bonds is finished, and then there will be a massive rush for the exits.  This rush for the exits will be unlike anything the bond market has ever seen before.  Robert Wenzel of the Economic Policy Journal says that this coming rush for the exits will set off a “death spiral”…

Anyone who holds the view that the Fed will not soon raise interest rates,and soon, fails to understand the nature of the developing crisis. It will be led by a collapse of the bond market.

Market forces, somewhat misleadingly called bond-vigilantes, will lead the charge.

I am not as bearish in the short-term on the stock market. The equity markets will be volatile because of the climb in rates and look scary at times but the death spiral will be in the bond market.

As this death spiral accelerates, we are going to see global interest rates rise dramatically.  And considering the fact that more than 400 trillion dollars in derivatives are directly tied to interest rates, that is a very scary thing.

And in case you are wondering, the stock market will be deeply affected by all of this as well.  I believe that we are going to witness a stock market crash even greater than what we experienced in 2008, and other experts are projecting similar things.  For example, just consider what Marc Faber recently told CNBC

“For the last two years, I’ve been thinking that U.S. stocks are due for a correction,” Faber said Wednesday on CNBC’s “Trading Nation.” “But I always say a bubble is a bubble, and if there’s no correction, the market will go up, and one day it will go down, big time.”

“The market is in a position where it’s not just going to be a 10 percent correction. Maybe it first goes up a bit further, but when it comes, it will be 30 percent or 40 percent minimum!” Faber asserted.

Where we are right now is at the end of the party.  There are some that want to keep on dancing to the music for as long as possible, but most can see that things are winding down and people are starting to head for the exits.

The irrational global financial bubble that investors have been enjoying for the past few years has stretched on far longer than it should have.  But that is the way irrational bubbles work – they just keep going even when everyone can see that they have become absolutely absurd.  However, eventually something always comes along and bursts them, and once that happens markets can crash very, very rapidly.

Second Suspected Gunman in Attack on Free Speech Event in Texas Identified – Here’s What We Know

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BY JASON HOWERTON

The second gunman suspected in the attack on a free speech event in Garland, Texas, has been identified as Nadir Soofi, the roommate of the previously identified attacker Elton Simpson, according to several reports. Both men reportedly lived together in Phoenix.

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While Simpson was reportedly known by the FBI and convicted in 2010 for lying to authorities about plans to travel to Africa, Soofi was apparently not under surveillance by law enforcement or widely known.

Both Simpson and Soofi were both shot and killed after they allegedly opened fire outside a Prophet Muhammad art exhibit cartoon contest in Texas. The stated purpose of the event was to promote free speech.

Arizona lawyer Kristina Sitton, who previously represented Simpson, told the Associated Press that the man was a devout Muslim and respectful of the legal process. She said he had converted to Islam as a young man.

Federal law enforcement officials reportedly searched Simpson’s property in Phoenix on Monday as well as vehicles at the location.

As previously reported by TheBlaze, it was speculated that Simpson sent out a cryptic tweet before allegedly attempting to carry out the attack in Garland.

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GUNS: THE DIFFERENCE BETWEEN GARLAND AND PARIS

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When armed terrorists attacked Charlie Hebdo headquarters over Muhammad cartoons on January 7, unarmed police officers were forced to flee for their lives

by BREITBART | MAY 4, 2015

When armed terrorists attacked Charlie Hebdo headquarters over Muhammad cartoons on January 7, unarmed police officers were forced to flee for their lives. When armed men attacked people gathered in Garland, Texas, on May 3 over Prophet Muhammad cartoons, armed police cut them down — and the Daily Mail reported that the body of one was left lying the street while police searched for explosives.

The difference between Garland and Paris can be summed up in one word: guns.

On January 7, CBS News relayed reports from Britain’s Telegraph newspaper that the first two officers to arrive “were apparently unarmed” and “fled after seeing gunmen armed with automatic weapons and possibly a grenade launcher.” The UK’s Independent reported that “three policemen arrived on bikes but had to leave because [the attackers] were armed.”

BBC reported the Paris gunmen killed 12 in their attack on Charlie Hebdo headquarters; that number includes 8 Charlie Hebdo “eight journalists, two police officers, a caretaker and a visitor.”

Moreover, the terrorists were able to continue their attack at different points in and around the city for the next 48 hours.

On January 19, Breitbart News reported that French police were demanding more guns as well as guns that were more powerful.  The Charlie Hebdo attack was very lopsided — in favor of the terrorists — because of policing and arms policies, and had revealed a very important point: Gun control was not working.

Fast forward to Garland, Texas on Sunday, where approximately 75 attendees gathered in the Curtis Culwell Center to attend a contest for the best cartoon of Muhammad. The contest was sponsored by New York-based American Freedom Defense Initiative.

Just before the contest ended, two armed men allegedly drove up near the Culwell Center and shot and wounded a security guard before both were killed by heavily-armed Garland PD.

According to a City of Garland May 3 press release:

As today’s Muhammad Art Exhibit event at the Curtis Culwell Center was coming to an end, two males drove up to the front of the building in a car. Both males were armed and began shooting at a Garland ISD security officer. The GISD security officer’s injuries are not life-threatening. Garland Police officers engaged the gunmen, who were both shot and killed.

There was no prolonged, two-day pursuit of attackers, nor were there unarmed police officers dodging bullets on their bicycles. But there were plenty of guns in the hands of good guys who were keeping watch over the cartoon contest and who were charged with stopping any bad guys with guns who might show up.

*(HEY OBAMA, WHAT IS THIS?)* Kenya government: ‘We will not allow homosexuality in our society’

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‘It violates our religious and cultural beliefs’

BY DARREN WEE

Kenya’s Deputy President William Ruto said Sunday (3 May) the government will not legalize gay sex, which is punishable by up to 12 years in jail in the African country.

‘We will stand with religious leaders to defend our faith and believes,’ he said during a church service in Nairobi.

We will not allow homosexuality in our society as it violates our religious and cultural beliefs.’ 

Last week, a court ordered the Attorney General and the National Council of NGOs to register an LGBTI group, the National Gay and Lesbian Human Rights Commission.

In the landmark decision, the judge ruled that the constitution protected the rights of sexual minorities and does not allow the limitation of rights on moral or religious grounds.

But Ruto sent out a very different message.

‘There’s no room for homosexuality in this country. That one I can assure you,’ he said.

‘When we say this, we are not saying so as to get votes, but to protect what we all believe is not right.’

Kenya is one of the most homophobic countries in the world. A 2007 survey found that 96% of Kenyans found homosexuality unacceptable.

*(WHERE IS OUR FIRST GAY PRESIDENT? HOW COULD THIS GO ON?)* Islamic State in Libya shoots three accused homosexuals in the head

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Every day I publish reports of Muslim oppression of gays under sharia. And every day I publish stories of another gay group attacking counter-jihad initiatives in support of Islamic groups.

Gays supporting Gay-hate.  Gay groups ♥ Islamic law.

“Three men accused of homosexuality executed by IS in Derna,” by Ayman Amzein, Libya Herald, May 1, 2015 (thanks to The Religion of Peace):

Benghazi, 1 May 2015: Three men, accused of being homosexual, are reported to have been executed by the Islamic State (IS) in Derna yesterday.

They were shot in the head at the town’s main Ateeq Mosque following afternoon (Asr) prayers. They were reportedly seized some months go.

The three have been named as Naseeb Al-Jazwi, Faraj Al-Shewi and Saad al Fahakhri. .

Following the creation of a Sharia Court in Derna last year, IS has imposed rigid Sharia law in the town. There have been public beheadings, people have been lashed for drinking alcohol, and a fortnight ago, a man accused of stealing gold had his hand cut off.

Its rigid interpretation of Islam in the town, has also included a ban on smoking and strict gender segregation similar to that imposed in Afghanistan during the Taliban era.

However, many see in its imposition of such action, a reign of terror designed to maintain its rule in the town.

In November 2012, 12 men said to be homosexuals, were arrested by the Islamist Nawasi Brigade in Tripoli at a transvestite party. They were supposedly released a few days later by this was then denied. They have not been heard of since.

– See more at: http://pamelageller.com/2015/05/islamic-state-in-libya-shoots-three-accused-homosexuals-in-the-head.html/#sthash.tblrngOn.dpuf

“Cubs of the Caliphate”: Islamic State trains youngsters on jihad *(THESE ARE THE CHILDREN THAT WILL KILL OUR CHILDREN. WAKE UP AMERICA!)*

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Erbil, Kurdistan Region – The radical group of Islamic State (IS/ISIS) has allocated several camps in the areas under its control in Mosul and Ramadi in northern Iraq and in the city of Raqqa in northeastern Syria, to train minors dubbed as “Ashbal al-Khilafa” (Cubs of the Caliphate) to carry out “jihadist” operations”, pro-IS media outlets reported.

The so-called Caliphate’s Cubs are also trained to slaughter, assassinate, and physically and psychologically torture others.

Speaking to ARA News in Mosul, civil rights activist A. I. said (on the condition of anonymity) that the radical group has recently closed schools in Mosul, and obliged male youngsters to join the training camps.

The source pointed out that hundreds of children were forced to join IS camps.

“However, other underage children were forced to join by their own families, under the pretext of defending the alleged caliphate, from Iraqi army attacks,” the source told ARA News. 

The same source stated that the IS camps, in which children are trained, used to be military centers for Iraqi regular army before the group seize the area months ago. 

The youngsters are reportedly subject to training sessions of one month and a half, and are then dispersed among the suicide squads and bomb-making workshops.

“Dozens of minors are taken to battlefields by IS militants to implement specific missions assigned to them by the group,” he said.

In the meantime, a tribal source in Mosul revealed that the IS hard-line group is training hundreds of children aged from 9 to 12, in the al-Furat area of the sub-district of Heet west of Ramadi.

“The radical group took advantage of the tribes of al-Tarabsha and al-Bu Nimr to collect the Syrian and Iraqi children to be trained in the al-Taqa headquarters of al-Furat district,” the source said, pointing out that many minors have also been utilized as human shields.

 

Reporting by: Sarbaz Yousef

HOUSE COMMITTEE APPROVES $200 MILLION FOR ARMING UKRAINE

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Authorizes Pentagon to “accept.. contributions, including in-kind contributions, from foreign governments”

Citing an anti-Russia policy brief, US lawmakers approved $200 million for providing “lethal weapons of a defensive nature” to the Ukrainian government as part of the $600 billion Pentagon budget proposal for the fiscal year 2016.

The House Armed Services Committee passed its proposal for the 2016 National Defense Authorization Act (NDAA) with a bipartisan vote of 60 to 2, in whatDefense News described as a “marathon” session that ended around 4:30am on Thursday.

Section 1532 of the 498-page document calls for the US to provide assistance, “including training, equipment, lethal weapons of a defensive nature, logistics support, supplies and services, and sustainment to the military and national security forces of Ukraine” through the end of September 2016.

In addition to the $200 million allocated for the program, the proposal also authorizes the Pentagon to “accept and retain contributions, including in-kind contributions, from foreign governments.”

The bill says the purpose of the assistance is to back the government of Ukraine in “protecting and defending the Ukrainian people from attacks posed by Russian-backed separatists,” as well as “securing its sovereign territory against foreign aggressors” and “promoting the conditions for a negotiated settlement to end the conflict.”

The NDAA sub-section dealing with weapons for Kiev specifically referenced a February 2015 report authored by a coalition of foreign policy think-tanks urging the US and NATO to resist “Russian aggression.”

Chaired by Texas Republican Mac Thornberry, the committee recognized that the White House has done much to provide “nonlethal security assistance” to Kiev, including a $75 million commitment announced last month, but nonetheless “believes that defensive weapons and training are also necessary to enhance the defense of Ukraine.”

Members of the 173rd Airborne Brigade arrived in Ukraine earlier this month as part of a training program aimed at Kiev’s military and security forces, prompting the Russian Foreign Ministry to question Washington’s motives.

“What will these foreign military experts teach them – how to continue killing those who speak Russian?” asked Russian Foreign Ministry spokesman Aleksandr Lukashevich.

Lawmakers have also pushed the White House for months to send lethal aid to Kiev. Last month, the House passed a non-binding resolution with a 348-48 vote, demanding lethal weapons aid for the “people of Ukraine to defend their sovereign territory from the unprovoked and continuing aggression of the Russian Federation.” However, the White House has remained silent on the issue.

The NDAA could be regarded as another attempt to influence the White House. Adam Smith (D-WA), the ranking Democrat on the committee, told Defense News that the bill has historically been a “vehicle for Congress to put its imprint on national security policy.”

Most of the draft legislation deals with funding the various weapons procurement programs. Additionally, up to $429 million would be allocated to Kurdish and Iraqi Sunni forces fighting the so-called Islamic State (IS, also known as ISIS).