Signs of a slowdown are spreading. Here in the US, despite all the happy talk about rising stock prices and falling deficits and the imminent unwinding of the Fed’s debt-monetization program, today’s numbers were ominous.
Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.
This regular column reviews the condition of several different markets including: stocks, commodities, currencies and precious metals. This week focuses on the Dow Jones Industrial Average, the S&P 500, sugar, the US dollar, and gold.
Marc Faber of the Gloom Boom Doom Report was interviewed by Bloomberg on Friday, and of course topic number one was the brutal takedown of gold. Not all that surprisingly, he likes the resulting buying opportunity and expects “a major low in gold within the next two weeks.”
Shinzo Abe is pressing ahead with his goal of devaluing the yen. On Tuesday he pressured the BoJ into adopting a 2% inflation target which paves the way for open-ended asset purchases. However, Abe’s cure could very well prove worse than the disease.
Richard Martin believes that Britain is heading for a financial collapse and that “no country has ever recovered from the financial position Britain finds itself in today.” I spoke to Richard to find out more, and to find out what investors can do to protect themselves.
There is a clear link between fiat money, the supply of money in an economy, and the 30-year boom that came to an end in 2008. By understanding this link investors can see how fragile the system is, and what to do to protect themselves from its inevitable collapse.
Very few people have heard of the Forgotten Depression of the 1920’s that affected the US from 1920 to 1921. Despite its severity economic growth was quickly restored thanks to a President who chose not to intervene in the markets and rather let free-market forces cleanse and reset the system.
The true purpose of QE is to whip deflation. That’s because politicians and central bankers are petrified of allowing another deflationary depression such as the Great Depression of the 1930’s to taking hold. Perhaps, then, Ben Bernanke, Mario Draghi and Mervyn King should start wearing Whip Deflation Now (WDN) badges?
ECB President Mario Draghi, aka Super Mario, disappointed investors yesterday when he failed to deliver any new bailout measures. As a result of the central banks lack of action markets across Europe and Asia tumbled, and Spanish and Italian bond yields shot back up to dangerous levels.
The choice facing world leaders is a simple one: Either they engage in massive money printing, or they let the world slip into another great depression. This article examines why they have no choice but to print money, something which will have significant consequences for everyone.
The recent strength in the Japanese yen versus the US dollar and the euro, coupled with the deteriorating global economic outlook, has increased the likelihood that the Bank of Japan will carry out more money printing. This adds to the case for going short the Japanese currency.