Max Keiser says the #1 bubble in the US is the bond bubble that is at a 240-year historic high due to low interest rates. Interest rates are at record lows so that central banks can prop up ailing commercial banks by buying their toxic assets, and that accounts for the $4.5 billion on the Federal Reserve’s asset balance sheet.
Keiser believes that, instead of the bubble popping, the entire stock market may be taken private through a process called leveraged buyouts. By that he means the largest corporations will borrow money created by banks out of nothing to purchase controlling interest in their corporate competitors. To get the money, the borrowers pledge the assets of the to-be-acquired companies as collateral for the loans. After the companies are acquired, the buyer sells off bits and chunks of the assets of the acquired companies to pay off the loans.
When the process is done, the acquired companies are no longer competitors and, in fact, may not even exist; the buyer has made a huge profit, the banks have collected a huge amount of interest; the marketplace is another step away from free enterprise capitalism and a step closer to a new form of feudalism in which there are economic lords and serfs with no middle class. Already, 83% of the stocks traded are controlled by 1% of the population. When that figure becomes essentially 100%, the stock market will be private. -GEG