Bob Janjuah On Brewing Popular Anger At The Failure Of Keynesianism
If you are like us, you just can't get enough of Bob. The only economist from RBS whose opinions are worth reading, who will never make any financial pundit lists (especially not ones that have Jim Cramer on them), due to his unpleasant habit of being too "truthy", shares 17 minutes of his latest perspectives in this CNBC Europe interview. Not surprisingly, Bob blasts the lunatic response of resolving debt problems with more debt. This time he also shares some additional political perspectives: “Having elected people who said everything would be all right, ultimately the US and UK had to elect Reagan and Thatcher to get us back on track” and eventually angry voters in the developed world will shift to the far right. Some more US-centric perspectives: “The US mid-terms will be crucial. We will see a shift to the right as the Tea Party movement demands change. "There are 220 million people in middle America who are angry and believe stimulus spending has been wasted on vested interest and the banks that they believe got us into this mess. For all the talk of positive growth in America, those outside of LA and New York are hurting and want cuts in government spending, not more borrowing and spending.”
And just like all other skeptics, Bob sees deflation in the near term...
“Over the next 6 months we will see private sector deflation pushing 10-year yields down to 2 percent. This will see the policymakers mistakenly attempt to kick-start the economy and market with a global quantitative easing program worth between $10 and $15 trillion dollars."
... followed by inflation: his advice is to buy gold, safe, boring megacaps with no debt, and have more Asia-centric exposure.
His conclusion: “We are seeing a repeat of 2007 and 2008 with the inter-bank market in trouble, people are ignoring this."