Red Pill / Blue Pill: Change Your Investing Perspectives Now

Would you like to see the financial system for what it really is, or what the financial media and textbooks tell you it is supposed to be?

From the iconic scene in the Movie, The Matrix, the choice of which pill to take offers very different outcomes. One, a life lived in harsh reality but where the individual can think and act independently; and the other, a computer simulation of a comfortable life, but bereft of the ability to think and act of one’s own volition.

The same choice is offered here. Would you like to see the financial system for what it really is, as opposed to what the financial media and textbooks tell you it is supposed to be?

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5 Systemic Alarm Bells You Need To Know As Credit Suisse Fails

Money and people running from a bank

Credit Suisse has failed, and been rescued, over the course of a weekend. While this may have prevented an immediate global banking crisis, danger remains.

Here are five alarm bells that are currently ringing very loudly.

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Silicon Valley Bank: The Big Problem That You Need To Know

Money and people running from a bank

The recent failure of Silicon Valley Bank (SVB) has driven markets into a frenzy of trying to understand why it happened, and what broader systemic implications it may have.

The US government has stepped in to backstop depositors in an attempt to prevent further bank runs, but mainstream narratives continue to miss a broader point – bank runs are symptoms of a much more troublesome problem.

One large enough to potentially trouble the entire global financial system.

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Is The Value Of Your Home Going To Fall As Rates Rise? 6

will higher interest rates reduce the value of your home? Probably not

Let’s conclude our discussion on mortgage rates, house prices and epiphenomena with the Fed’s role in the housing market.

As explained in Parts 3 and 4, higher mortgage rates are primarily a function of a bullish housing market, not Fed hawkishness.

By extension, the Fed doesn’t really have that much control over the US housing market, at least not through the interest rate channel.

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Is The Value Of Your Home Going To Fall As Rates Rise? 5

will higher interest rates reduce the value of your home? Probably not

Mistaking mortgage rates for the real estate market is what is technically termed an epiphenomenon.

The word simply refers to a secondary phenomenon that occurs alongside a primary one.

Since they occur together, people mistakenly attribute a causal relationship to both, even though this often isn’t the case.

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Is The Value Of Your Home Going To Fall As Rates Rise? 4

will higher interest rates reduce the value of your home? Probably not

Now that you have a better understanding of how the interest rate fallacy applies to the housing market, let’s take a look at another often misinterpreted chart.

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Get a different perspective on all things trading & investing every week!