Hyperinflation

Paul Fisher Head of Markets at the Bank of England told the economic worriers of the UK that the BoE would not pull the stoppers out on the economic stimulus plan in the UK and that the “macroeconomic outlook here is not as bright as in the US, therefore we are some way behind them in terms of return to anything like trend growth”. Has Mr. Fisher been to the US recently?

Milton Friedman once said that “if you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand”. I think if he were around still, he would need to revise that.

Goldman Sachs has suggested that there may be up to 349 Initial Public Offerings (IPOs) taking place in China this year. But, it’s not the Chinese capital markets that those companies will be wanting. Chinese firms are still hell-bent on getting floated on the world’s biggest and best stock exchange, and rightly so.

Here are the worst IPO fails of all time in the world. The ones that we thought would be unfailingly good. The ones that we thought we could bet our bottom dollar on and still strike it rich.

• S&P Revises U.S. Credit Outlook To "Stable" From Negative

• Fed's Bullard Details How QE Can Be Cut

• Fed Retreat From Bond Buying Expected By Fourth Quarter - Poll

• U.S., Japan Leading Recovery In Major Economies - OECD

"By propping up asset markets, the Fed has created an illusion that wealth is being created. The next step, according to Bernanke’s plan,  should be for growth to follow. In fact, there is no reason why the rise in prices of financial assets should lead to actual investments or a rise in the median income. So far, it has not. There has been no real increase in the private sector propensity to borrow, and the danger may be that any further public sector borrowing will hasten the decline because of our “permanent asset hypothesis”. This means that, should the Fed lose control of asset prices (is this what is now happening in Japan?), then the game will be up and the downside move in markets may well be terrifying."

Privatization is back on the political stroke economic agenda this morning after a report commissioned by Chancellor of the Exchequer George Osborne in the UK looks like he will be set to return bailed out banks to the private sector.

Looks like the sun has gone behind the clouds in China for a bit! Not only are the solar panels creating friction between China and the EU, but now it turns out that last month saw Chinese export growth unexpectedly decrease.

If you hold precious metals in your portfolio, there is a good chance you fear hyperinflation and the crash of fiat currencies. You probably distrust governments in general and believe they are self-serving and have no interest in your economic well-being. It is likely that your holdings in gold are your lifeline – your hope to get you through these times while holding on to your wealth. But have you ever given any thought to the possibility of having this lifeline confiscated by the authorities? If you fall into this camp, you're in good company. As terrible as the thought is, it seems unlikely to us that the government will not confiscate gold, as they have little to lose and so much to gain.

The uncertainty about when the Fed will begin tapering its programme of asset purchases has increased volatility, both pushing and pulling on global financial markets. “at this juncture, the markets are more concerned about tapering than about weak [US and global] growth,” says MIG Bank’s Chief Economist, Luciano Jannelli.

Here are some of the most recent top insider dealing stories in the USA. The biggest in terms of fines!

In November, NYU Professor Nouriel Roubini stated, “gold at $1,500 is utter nonsense.” In less than two years, gold was above $1,900. This week, the mad professor is back with his swiss-cheese logic and anti-gold rants.

Year-over-year inflation in Venezuela accelerated to 35.2% - up from 20.1% YoY in December. Goldman is concerned as the 6.1% MoM (the highest on record) in May means inflation is now endemic and the economy could easily veer from the current stagflation equilibrium into the dangerous and slippery road to hyperinflation. In a sentence that rings all to close to home, they sum up: All in all, we are increasingly concerned with the inflation and monetary dynamics in Venezuela as the classical Sargent and Wallace (1981) “unpleasant monetarist arithmetic” of severe fiscal dominance brought about by growing monetization of fiscal deficits and very weak policy credibility could easily degenerate in a recessionary hyper-inflationary spiral. That must mean it is time to buy the Caracas Stock Index (+72% YTD, +600% since Jan 2012)?

There are times when some people bite their own nose of just to spite their face. According to a report that has just been published by the Chartered Institute of Personnel and Development (CIPD), the people working in the financial sector in 120 different countries in the world think in the overriding majority of cases that they are paid far too much for what they do. Were they serious?

If we are to believe what they said, then this is the year. 2013! It’s going to happen.. The stock-market is ready to crash yet again this year and this time it’s going to be a big one. Let’s take a look at what was said, when, why and by whom.