The main tools governments have been incorporating is Relative Currency Devaluation along with Relative Money Printing, all of which are hard to pull off with a Standardized Centralized Approach which is the European Union.
"The opinions of experts concerning the future are accorded great weight . . . but they’re still just opinions. While I take a dim view of forecasts, and especially of opinions presented as facts, I do believe there are such things as facts. Unfortunately, however, the concept of 'facts' is among the casualties of the increasingly partisan environment. Recently we have seen both the elevation in status of 'non-facts', as well as the tearing down of 'real facts'."
After hitting a recent high of $34 billion in gains three months ago, the reported amount of net unrealized gains has tumbled, and from a gain it has turned into a loss of $14 billion as of the week ended December 14. On a 4-week rolling basis, the change amounts to $37 billion in losses, the biggest monthly drop since the 2013 Taper Tantrum.
Another day, another prominent hedge fund shutters it doors in less than a year after launching a world in which investors increasingly skip "active investing", and instead give their cash to far cheaper, and far more effective - if only for the time being - "passive" strategies.
It is official: Trump or no Trump, foreign central banks, wealth funds, and virtually every other official institution in possession of US paper is liquidating their Treasury holdings at a record pace, amounting to an unprecedented $400 billion in the past 12 months.
"Looking further ahead, the most worrying signs relate to the risk of greater protectionism. Those signs have been multiplying in recent years, and prospects have darkened considerably with the most recent political events,” said Claudio Borio, concluding that "there would be no winners, only losers. Lower global growth, and possibly higher inflation, would benefit no one."
It is official: Trump or no Trump, foreign central banks, SWFs and virtually every other official institution in possession of US paper, and as of this month, private investors too, are liquidating their Treasury holdings at a record pace.
In the US, easy central bank policy leads to greater corporate bond issuance and leverage, which in turn result in companies buying back their own equity - and to that extent QE is now residing on individual company balance sheets. In contrast, in Japan the BOJ simply buys Japanese equities directly. This difference is important
It is becoming increasingly obvious that foreign central banks, sovereign wealth funds, reserve managers, and virtually every other official institution in possession of US paper, is liquidating their holdings at a very disturbing rate.
"They know the economy is in the shitter and the average American is not better off than they were four or eight years ago. As a last ditch effort to keep this tsunami of history from rolling over them and sweeping away the last vestiges of their corrupt rule, they have ramped up the printing presses and government spending to try and make the masses believe the economy is hitting on all cylinders. It will fail, and the peasants will be coming for them."
"So for what it’s worth however the ECB decides to navigate their latest challenge we are less inclined to embrace the classic financial sector meltdown led risk off trade that forces core rates significantly lower. Or at least it would need a spectacular display of policy incompetence first. (On second thoughts..?!)"
On the current path, the world is experiencing the largest artificial asset allocation in modern history, one that is driven by a misguided interest rate regime that has lost its efficacy and is producing more harm than good. Yet the fear of withdrawal pain is keeping central bankers from doing the inevitable: Quit. The response is predictable: "I need the drugs!"