Spanish bond yields eased this morning….despite ‘woeful’ economic data having been released. (I may well have more on this later).
In the US, corporate profits are at an all time high: in the final quarter, profit margins for big business went on average beyond 27%. The real American economy is on its arse, and it’s deficit ceiling about to be pierced again: but the stock markets have kept on pumping up against any known standard of common sense.
Last September, the Washington-based IMF forecast Sovereign surpluses of more than 7% of Chinese gdp for 2015 and 2016.Yet the country’s inflation rate was out of control, and all its European markets heading for recession. Now, it seems, the next ‘forecast’ (to be published on April 17 in the IMF’s World Economic Outlook) will downgrade that outlook dramatically.
The price of gold has fallen and then stalled – despite worldwide compromising of fiat currencies, falling economic outlooks, and seemingly inexhaustible demand from China and India: yet in the real world, you can’t get hold of any. At least twice a week, the US Fed is STILL intervening to dump the shiny stuff.
Everything – but everything – is being manipulated by Sovereign States, central bankers, metal miners, oilmen, ETF traders and Russian blaggers.
This week, Zero Hedge has come up with a startling figure on one dimension of this fantasy-maintenance – central bank economic stimulus. The sheer size and concentration of global monetary stimulus is such that over the last 3-4 years, almost $9 trillion MORE has been added…what ZH’s Tyler Durden calls, ‘the greatest period of fiat money creation in human history’.
He illustrates this as follows:
‘Collectively global central banks have created enough fiat money to buy every person on earth a 55” wide-screen 3D television.’
Presumably, so all of us could tune in to be told, one more time, that everything is just fine.
Today in Europe and on Wall Street, there is the sense of a stock market tipping point. But I don’t know if it will happen, because I don’t know just how totally the Bernankes and Draghis of this world are prepared to pauperise every investor in the world in their bid to inflate away the $330 trillion (latest count) of obligation and derivative funny money they all owe.
So far over the last 12 months, staying out of a mad stock market has cost me a lot of money. But I refuse to play this Bedlam Wall Game of Feds printing money and companies selling no tractors just taking the reinvested cash mountain to the bottom line. It’s a scam, it’s a fraud, and it is a policy undertaken quite deliberately to save the hides of a few jerks at the top – at our expense.
Until this ends, investment in every metal, energy form, commodity, currency, Sovereign or Bourse is a complete Mug’s Game. For no matter how much easy money you can make, the coming hyperinflation will wipe it all out anyway.
The Earth has become one gigantic Broadmoor run by the criminally insane. Best to wthdraw for a bit: costly in the short term, wise in the longer-term.