Monetary Policy

How Billionaires Are Investing In 2016: "The Only Winning Move Is Not To Play The Game"

"The world’s central banks can’t save us anymore." That was the message from some of the world’s most prominent investors at the World Economic Forum in Davos, Switzerland, on Friday. Each was resistant to putting on fresh positions and expected asset prices to head downward. In short, they say, the only winning move is not to play the game. “The trade now is to hold as much cash as possible,” said Nikhil Srinivasan, chief investment officer for Generali, a European insurer with $480 billion in assets. “Equity markets could go down 15% to 20%.”

700 Days In No Man's Land - Why They Can't Keep It Up

The global economy has had its artificial boom and CapEx frenzy already and years of deflationary liquidation and correction lie ahead. Money printing has failed. Any effort by the central banks to double down on another $20 trillion of bond purchases would blow the world’s financial casinos sky high. Contemporary central bankers function like a team of monetary wranglers, herding the retail cattle toward the asset gathers. At the end of the day, the asset gathers will profoundly regret what they are clamoring for.

"China 2016 Is US 2008" Felix Zulauf Warns "The Outcome Of A Major Yuan Devaluation Would Be Disastrous"

"China is to the current cycle what the US housing market was for the Global Financial Crisis in 2008. It will take years to correct the excesses that were built up in China... the consequences of a weaker yuan would be disastrous...If China devalues, all the other countries in the region will follow suit which will lead to a global deflationary shock. There is a real chance of a bigger correction than many investors realize..."

What Sent Stocks Soaring Overnight: DB's Jim Reid Explains

"Away could yesterday mark the start of another plate spinning cycle from the central banks? The market chatter is now looking towards Kuroda to signal more action when the BoJ meet this time next week. Will Yellen also signal a more cautious and dovish stance at the FOMC next Wednesday? We continue to think central bank money printing globally remains in the early stages. Such policies could go on for several years yet even if there are periodic pauses."

Global Stocks Surge, Oil Soars As Hopes For Central Bank Stimulus Return

"There is hope of more stimulus in March and potential for even more stimulus in Japan and China, so if we get concrete positive economic news the rebound could last into next week,” said John Plassard, senior equity- sales trader at Mirabaud Securities. “I told my clients to fasten their seatbelts and wait for better news, and this is finally happening."... "The turnaround in sentiment came amid signs central banks may be prepared to act after $7.8 trillion was erased from the value of global equities this year on China’s slowdown and oil’s crash."

Recession Signs - 2008 & Now

Is the economy “nowhere near recession?” Maybe. Maybe not. But the charts above look extremely similar to where we were at this point in late 2007 and early 2008. Could this time be “different?” Sure. But historically speaking, it never has been.

 

Canada's "Other" Problem: Record High Household Debt

"Household vulnerabilities could be exacerbated by a severe recession that is accompanied by a widespread and prolonged rise in unemployment. This could reduce the ability of households to service their debt and cause serious and broad-based declines in house prices."

War On Cash Escalates: China Readies Digital Currency, IMF Says "Extremely Beneficial"

Remember when Bitcoin and its digital currency cohorts were slammed by authorities and written off by the elite as worthless? Well now, as the war on cash escalates, officials from The IMF to China are seeing the opportunity to control the world's money through virtual (cash-less) currencies. Just as we warned most recent here, state wealth control is the goal and, as Bloomberg reports, The PBOC is targeting an early rollout of China's own digital currency to "boost control of money" and none other than The IMF's Christine Lagarde added that "virtual currencies are extremely beneficial."

Why We Need A Recession

"The return to monetary stability does not generate a crisis. It only brings to light the malinvestments and other mistakes that were made under the hallucination of the illusory prosperity created by the easy money."