We don’t need to economically define what that means: given the precarious state of the Eurozone, or Japan, or the bubble characteristics of U.S. stocks or Chinese or Canadian real estate, even a hiccup in interest rates could lead to economic pneumonia.
( Full articles coming soon. )
By immediately embracing a Kiev regime whose legitimacy is suspect, the European Union (aggressively pushed by Washington) is engaging in an adventure that will prove extremely costly, both in terms of money and credibility.
Our views vary considerably from the sentiment of most investors. We are less concerned with a dramatic change in central bank policy, but see anemic economic growth and overly stretched stock valuations as a key challenge.
The past few weeks have blown a few holes into such thinking. Bond yields have risen sharply, major stock indices have been under growing pressure and gold has rallied against all currencies.
Markets are so enamored by the prospect of continued and escalating stimulus that they forget the desperate economic circumstances that make bailouts, stability funds and other support operations necessary.
Last year, as the EU’s political elite dithered over rescue packages of thirty and forty billion Euros, we wrote that a mere stabilization of the Euro–crisis would require at least 2.5 to 3.5 trillion.
Since 2008, numerous stimulus packages and QE1 and QE2 have seriously undermined the integrity of the dollar. In the past few weeks, both the Swiss National Bank and the Bank of England have introduced their own versions of quantitative easing, and now the EU is going down much the same path.
The fortune of the United States during the postwar period has been that whatever chaos ill-guided policies in Washington created, Europe and Japan could be counted on to do even worse. And so it is again this time. The European banking system… Read More »The Fortune of the United States
A major financial dislocation appears imminent. I have extensively written about the three catalysts that could unleash calamity: -the reckless granting of low quality real estate loans;-the intransparency of trillions of dollars in outstanding derivatives;-and the lack… Read More »A major financial dislocation appears imminent