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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Is The Value Of Your Home Going To Fall As Rates Rise? 1

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

The recent rally in interest rates has seen 30y mortgage rates in the US rise sharply to about 4%.

These levels were last seen in 2019, and have given rise to concern and commentary in some quarters that rising mortgage rates will cause home values to tumble.

Are these claims and concerns valid?

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Russia’s SWIFT Ban Is NOT Nuclear. This Is What Actually Is

SWIFT sanctions are not the nuclear option everyone thinks they are. Here's what's important instead

Concerted sanctions by the West against Russia keep rolling in.

Out of these, the selective SWIFT ban has captured the most attention, and been attributed as doing the most economic damage. Unfortunately, it really isn’t as effective as the media and politicians make it out to be.

Here’s why.

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Why The Dollar Poses A Global Headache 6: Recurring Crises

"The Dollar is our currency but it's your problem" John Connally

The unwillingness on the part of USD lenders to actually lend Dollars during a crisis is a crucial part of the problem.

Since money is created by the private sector and not central banks, the Fed cannot coerce banks into lending USDs globally.

They simply do not have the mandate to do so, and probably aren’t willing to do so, given the public and private uproar such coercion will generate.

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Why The Dollar Poses A Global Headache 5: Crisis Lending

"The Dollar is our currency but it's your problem" John Connally

Everyone’s need for Dollars, coupled with their inability to increase its supply when needed, is what led former US Treasury Secretary John Connally to refer to the USD as “our currency, but your problem”.

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Why The Dollar Poses A Global Headache 4: More Isn’t Better

"The Dollar is our currency but it's your problem" John Connally

Since, in general, only American banks can access the Fed’s liquidity programs, like the SRF and the Reverse Repo overnight facility, the rest of the world is left with no way to raise the Dollars they so desperately need.

Which is where foreign central banks step in by selling their foreign reserves to provide their local banking systems with Dollars – but having more reserves isn’t necessarily better.

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