In the long term, QE2 is obviously not a sustainable course. Nonetheless, QE2 can continue as long as (1) the United States remains politically stable, (2) the U.S. dollar remains the world reserve currency and (3) the value of the U.S. dollar strengthens, remains flat or decays in a controlled manner, i.e., at a relatively stable, gradual rate. Although Bernanke clearly believes that the risks are contained, the Federal Reserve’s policies are, in fact, debasing the U.S. dollar and have already guaranteed the end of the U.S. dollar as the world reserve currency.
Never in history has there been an economy this large with such serious economic structural problems: Unemployment 23%, unmanageable debt north of 128 trillion, the largest & ever-growing money supply that is sparking hyperinflation and causing global unrest in emerging nations whose workers spend up to 50% of their wages on food, massive & unstoppable monetization of governmental debt, an unbalanceable & uncuttable budget. We have an ace up our sleeves, there is an easy way out, but for whatever reason our economic engineers of disaster, many who helped create this unmitigated disaster, are hell bent on proving the Mayan's correct by "fixing" serious structural economic problems with lies.
When the Tunisian, then the Egyptian revolutions succeeded we were all surprised. Many believed that at last democracy had won in the Middle East. When the King of Jordan changed his government a feeling of contagion set in. Then we heard of riots in Yemen, Libya, Bahrain, Iran and we now look at the entire Middle East as ripe for contagious revolutions. The question hangs in the air, “Are these revolutions or just exuberant demonstrations?” Will they topple regimes and disrupt oil supplies.
The USD/JPY was one of the strongest trending pairs of 2010 as it dropped from its 2010 HI of 95.00 in March to its 2010 LO of 80 by October. The pair tends to move in a much less volatile manner than other pairs such as EUR/USD and GBP/USD, so the run down in USD/JPY was smooth and clean.
After the close yesterday, FedEx preannounced that this quarter's results were going to be negatively impacted by the weather and fuel costs. However, the stock was not badly affected after hours, nor were the futures. And, lo and behold today, FDX was higher on that news. It's not like FDX was necessarily a sale on that announcement, but I don't see why folks would be racing into it, either. Then again, we are in a crazy environment.
Suppose I told you that there was no device or method ever invented that will allow us to predict the course of the markets? Suppose I told myself the same thing (and I have) -- then what would be the point in studying the market and writing these sites? Actually, I do follow the action of the stock market, and I follow it closely. Here's the real story:
Our argument in Endgame is that while the debt supercycle is still growing on the back of increasing government debt, there is an end to that process, and we are fast approaching it. It is a world where not only will expanding government spending have to be brought under control but also it will actually have to be reduced. In this chapter, we will look at a crucial report, “The Future of Public Debt: Prospects and Implications,” by Stephen G. Cecchetti, M. S. Mohanty, and Fabrizio Zampolli, published by the Bank of International Settlements (BIS).
Fed and primary dealers need to be considered
Based on fundamentals and technicals, our analysis below makes what we believe is a strong probabilistic case the next correction will not kick-off a new full-blown bear market.
Misunderstandings can be quite expensive for investors, and this article will examine two common but mistaken beliefs about short-term government debt and inflation.