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Gregory Mannarino: Debt Is The Nature of The Beast

Gregory Mannarino doesn’t think it is a big surprise to anybody that, yet again, they’re going to  raise the debt ceiling. “They’re gonna kick the can down the road,” he told me on The GoldSilverBitcoin Show.

“We’re gonna have to re-address this relatively soon. Imagine my utter shock here. What this whole thing boils down to is very very simple: we’re in a situation where without the continuous and relentless acquisition and adding on of more debt in perpetuity, we are just done. That’s the nature of the beast here; a debt-based economic model, which means at its core debt must be piled on at an ever increasing amount just to maintain where we are.”

Most people have no idea that that’s how this system works here, he says. “But, that is a fact. The debt is never meant to be paid back. It’s only meant to be expanded on exponentially. So, this is all nonsense. Here is a big show that ‘Oh, we’re really going to do something about it now. It’s all theater. And we have no representation here in the United States or anywhere around the world. We’re being ruled and governed by central banks, and their plan is to continue to inflate. Period. The End.”

Mannarino says understanding can simplify life. “What we need to do is stay on the right side of that, and we can do this in many many different ways. But that’s what it comes down to here: the relentless acquisition of debt on an unprecedented scale in perpetuity. No matter what the Fed does, no matter what our so called representatives do, that’s the way it’s gonna continue. It’s just that’s the way it is. It’s the nature of the beast.”

It’s a really crazy situation. “Never get into anything at all that you don’t fully understand,” warns Mannarino. “And, although the markets seem like they’re very complicated, they’re really not. Just understanding where cash is moving is a big key here. And how do we gauge that? It’s very simple, in my view.”

He adds: “You look at the debt market, which is the backbone of the financial markets. More specifically, the 10 year yield, which is the benchmark—every trader that I know from going back to when I started back in the 80s through ‘til today follows that 10-year yield. You can look at the whole dollar yield curve. But you can glean a lot of information just by watching that 10 year yield right now.”

Greg wonders, if we have a situation where rates are suppressed, like they’ve been since the last meltdown, What does that do? He believes it creates a deliberate environment of risk. 

“In other words, cash making its way over into the stock market, inflating a bubble. That bubble in the stock market, which we have, the largest in history right now, is being fueled by the debt market. So, if we understand that mechanism, we also know that it’s going to continue to inflate. What does that tell us? Where do we want to be? We want to be again in equities and hedging ourselves longer run with metals and cryptocurrencies.”

Watch the full show here:

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