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What’s Happening In The Markets?
Porter's Journal Issue #28, Volume #2
Porter Stansberry
March 10, 2025
A Global Reset Of The Financial System
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
There are major structural changes taking place to the markets and the economy… The dollar may not reign supreme forever… Short-term pain will lead to long-term gain for the U.S. economy… Recession indicators getting hotter and hotter… |
Table of Contents
What’s happening in the markets today isn’t merely a “correction.”
There are major, global, structural changes taking place. These changes will put America in a much stronger competitive advantage. And they will end the “financialization” of the world.
Before I explain what’s happening, let me ask you a few simple questions.
First, does it make sense that for several years trillions in capital were invested into bonds with negative yields? Not negative “real” yields, i.e. yields after inflation. No, these were flat-out negative nominal yields, where investors were signing up to lose money, guaranteed! From 2016 to 2019, more than $10 trillion in debt (sovereign bonds, corporate bonds, mortgage bonds) had negative yields! At the peak, there were almost $15 trillion in financial assets with negative yields.
Why would any investor invest in bonds that are guaranteed to lose money?
Here’s another head-scratcher.
In the aftermath of the 2008-2009 Global Financial Crisis, as central banks around the world began printing trillions of new currency and buying bonds, one central bank – Switzerland’s – decided to buy foreign (mostly American) equities. Between 2015 and 2019, Switzerland printed about $600 billion (out of thin air) and bought foreign securities, including about $150 billion in large-capitalization U.S. stocks, including Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN).
Does it make any sense to use equities as a monetary base? How do you price equities if equities are money? Nobody talks about it, but this was the ultimate perversion of the global financial system. The world’s monetary system became like an M.C. Escher drawing: an endless loop. And this was the Swiss central bank, which had long been the most conservative bank in the world!
Why were these incredible monetary experiments happening?
Here’s the explanation.