"...everybody knows there's something seriously wrong but they don’t know what is really happening."
This 'world order' may be coming to an end, he believes: "It's the collapse of that structure that was built in the 1940s that is behind all of these problems that are popping up in financial markets and economies around the world."
Has the DNA of the global economy been gradually altered by endless injections of quantitative easing, morphing it into a freakish mutant? Are things that are not supposed to happen for centuries on end going to become common occurrences? The collapse of oil prices and jump in the Swiss franc have forced us to puzzle over these weighty questions. In isolation, these events and the direction of their moves did not worry us, but their magnitude, velocity and proximity to each other sent me on an intellectual quest.
QE Inventor: It’s EASY to Create a Full-Blown Recovery, But Central Banks Chose to Make Banksters Rich Instead ...Submitted by George Washington on 03/05/2015 17:14 -0400
QE Is a Sham
Should a tail event such a deflationary spiral or Grexit occur, limits on ECB asset purchases will put Mario Draghi at a disadvantage as other central banks race to the bottom. JP Morgan says this will force the ECB to cut interest rates for cash deposits to minus 3% while the dollar will appreciate by 20%, reaching parity with euro in 2015.
"I am somewhat concerned, at least given the way things stand now, about the market reaction. First, the lack of details will create some uncertainty and concern, particularly because there’s not a great deal said about the “problem children,” the BAC and Citi. Secondly, I think the markets will be disappointed in the following sense: As I will describe, this is a real truth-telling kind of plan. It’s fundamentalist. It’s not about giving the banks a break. It’s not about using accounting principles to give them backdoor capital. It’s very much market-oriented and “tough love.” And I think we all will like that. I like that. But the banks’ shareholders aren’t going to be thrilled about it."
Financial systems that seem robust are more often than not inherently fragile - China is no exception!
"None dare call it a “currency war” because that would be counter to G-10/G-20 policy statements that stress cooperation as opposed to “every country for itself”, but an undeclared currency war is what the world is experiencing. Close to the same thing happened in the 1930’s, a period remarkably similar to what many countries’ policies resemble today.... Negative/zero bound interest rates may exacerbate, instead of stimulate low growth rates in all of these instances, by raising savings and deferring consumption... Asset prices for stocks, high yield bonds and other supposed 5-10% returning investments, become stretched and bubble sensitive; Debt accumulates instead of being paid off because rates are too low to pass up – corporate bond sales leading to stock buybacks being the best example. The financial system has become increasingly vulnerable only six years after its last collapse in 2009.... Central banks have gone and continue to go too far in their misguided efforts to support future economic growth."
Reuters Interview GoldCore. How has demand compared in different regions of Europe so far this year? p.s. Dislike term silver bug and gold bug. Pejorative and we don't call people stock roaches or paper bugs or dollar bugs : )
Somehow, monetary policy is still believed neutral in the long run and that bubbles are market events. Central banks have shown why they cannot command economic performance, but that doesn’t mean they can’t give one hell of a comedic performance. We have taken a monetary ride now into the theater of the absurd.
"Monetary Policy Is Bankrupt" Dr. Lacy Hunt Warns "Bonds, Not Stocks, Are A Good Economic Indicator"Submitted by Tyler Durden on 02/27/2015 19:35 -0400
"While the wealth effect is a theoretical possibility, it is not supported by economic fact. The stock market is not a good guide to the economy, but...the bond market is a very good economic indicator. When bond yields are very low and declining it’s an indication that the same is happening to inflation and that economic activity is weak. The bond yields are not here for any fluke of reason. They are here because business conditions in the US and abroad are quite poor."
Euro-denominated emerging market sovereign issuance will soar to its highest levels in 10 years on the back of the European Central Bank's quantitative easing programme, as issuers outside the eurozone seek to take advantage of falling euro yields, according to bank analysts.
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. During testimony this week, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Janet Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide?
With more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings, when the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks. If you are trusting in the government to save you when things fall apart, you will be severely disappointed.
Alan Greenspan Warns: There Will Be a “Significant Market Event... Something Big Is Going To Happen”Submitted by Tyler Durden on 02/23/2015 06:15 -0400
"We really cannot exit this [era of QE and ZIRP] without some significant market event... The end has to come at some point... Gold will go measurably higher... In any market that is so one sided, that is accelerating so rapidly, that trend will end… it will most likely end in a fairly violent fashion."
The Ultimate "Easy Money Paradox": How The ECB's Previous Actions Are Assuring The Failure Of Its Current ActionsSubmitted by Tyler Durden on 02/22/2015 18:35 -0400
The problem, as several sources told Reuters last week, is that there simply aren’t a lot of willing sellers. Ironically, the ECB’s own policy maneuvers are ultimately responsible for creating this situation. That is, the fallout from previous forays into ultra accommodative monetary policy is now hampering the implementation of quantitative easing - call it the ultimate easy money paradox.