Gunn System — Junk Bond Index, What in the World Economy Now?

A YouTube blogger named Gennady M shared his thoughts and opinions on global financial markets.

The chart shows the Junk Bond Index. Let’s take a look at what is happening in the Gann system and the global economy in general.

The junk bonds shown in the chart do not represent a single global liquidity reference. They are accumulated in sufficient quantities in the balance sheets of all the banks in the world. As you can see, it was actively sold last year. But the problem is that there are no buyers. The only buyer left is the central bank, which the central bank rejects.

To avoid high margin calls, you need to go ahead and buy a car. It should be covered with fluidity.

Liquidity

First, liquidity is the essence of today’s global financial system. Liquidity is the ability to exchange an asset (something) for money. The faster you can get money for your asset, the more liquid it will be.

Junk Bond Index

Second, this liquidity is currently under pressure at a fairly rapid pace due to the tightening monetary policies of some of the world’s major central banks (mainly the Fed).

Bank of England

In this way, the major central banks reduced their balance sheets by 3.1 trillion dollars. This is unprecedented in the monetary world for at least the last 20 years. But according to the United Kingdom, the financial system cannot afford this burden, and the Bank of England has returned to its asset purchase program. 

In doing so, he created the unprecedented (absurd and stupid in the context of a still functioning financial system paradigm) of raising monetary policy rates and at the same time operating a printing press.

Third, the Bank of England exposed the intentions of other central banks. Maybe the printing press will start in other countries too.

Will this help to save the system?

Not. Metaphorically speaking, it’s like pouring gasoline to put out a fire.

Can central banks buy time with this?

Yes they can But this is a matter of a few months after which the fall will be stronger and worse. There is no doubt. Control has been lost and the entire concept of the global financial system is in dire straits.

To summarize the above:

If the banks soon announce the urgent repayment of government debt (which is the basis of the global system), i.e. start pouring money into the economy, it could provide medium-term stimulus for all markets and currency pairs. the dollar rose But the funeral procession is already underway, and the money will only be on the completion of this score in an epic and paradoxical way.

Technically, we will see a big explosion in the white corner (like the covid year). If the printing press is not operated now, the index will fall by 30%, leading to an immediate recession and a repeat of the Lehman Brothers crisis of 2008. If the central bank starts buying this “junk”, it is likely that the index will test a corner at ~99 and horizontal volume will build up to 108 (which seems fundamentally utopian).
But it does little in the medium term, and less in the long term. The Gann magnet at index 60 has been activated.