Nieuws

Marc Faber: A Hard Landing for the Chinese Economy

Jim Reid (Deutsche Bank): ‘Zonder groei lopen we tegen de muur’

Het westerse schuldenprobleem mondt uit in een inflatieprobleem. Intussen wachten ons nog een paar moeilijke jaren, te beginnen met 2012, waarschuwt Jim Reid, de strateeg van Deutsche Bank.

Marktstrategen zijn in alle maten en kleuren verkrijgbaar, maar slechts weinigen drenken hun analyses in een bijzonder diepe historische context. De grafieken die de strateeg van Deutsche Bank fabriceert, beginnen niet zelden in 1900. Sommige tonen zelfs trends vanaf de achttiende of zeventiende eeuw, of zelfs vanaf de middeleeuwen.

Van 1200 tot de Eerste Wereldoorlog is er nauwelijks een spoor van inflatie. Daarna, en vooral na 1971 – toen de dollar losgekoppeld werd van het goud – is geldontwaarding eerder regel dan uitzondering. “Ik ben ervan overtuigd dat inflatie de hoofdrol speelt in het eindspel van de westerse schuldencrisis”, zegt Jim Reid.

“Het deflatiegevaar op korte termijn dient als opstapje naar hogere inflatie op langere termijn, omdat deze deflatoire dreiging een nog veel agressievere reactie van de westerse centrale banken uitlokt, zeker in de VS en het Verenigd Koninkrijk. Naarmate dit decennium vordert, stijgt het risico op pittige inflatie (meer dan 10%). Ons schuldprobleem mondt uit in een inflatieprobleem. Na deze inflatiegolf, ik schat vanaf 2020, klinkt er weer een grote roep naar een soort van gouden standaard als anker van monetaire stabiliteit. Het experiment van de voorbije 40 jaar, met de papieren dollarstandaard als baken voor het financieel systeem, wordt dan begraven.”

Jim Reid verwacht dat ook de Europese Centrale Bank meer overheidsobligaties koopt, maar slechts op het laatste moment. “Dat zou de markten weer enkele maanden kunnen kalmeren. Daarna wordt het erger. De impact van de bezuinigingen in de zuiderse eurolanden op de groei wordt schromelijk onderschat.

De tweede helft van 2012 wordt nog slechter dan de eerste helft. Heel 2012 wordt in recessie gedrenkt. Maar we hebben een decennium van normale groei nodig om de overmatige westerse schulden weg te werken. Groei doet wonderen, maar zonder groei lopen we tegen de muur. Of we krijgen de volgende jaren economische groei of we riskeren een heel ernstige ineenstorting.”

China Enters The Danger Zone, SocGen Presents The Four Critical Themes – ZeroHedge

The hidden dangers of low interest rates – Reuters

Investment or Malinvestment? – LvM Institute

US vs. China Money Supply – Who is Printing More? – Mish

The Myth of Japan’s Failure – The NY Times

Mafia is Italy’s biggest business – The Telegraph

China Will Actively Push Investors Into Stocks – ZeroHedge

Something rotten in Switzerland – The Local

Collapse, No. Huge Losses, Guaranteed. – Gary North

China loan growth quickens – Reuters

China No Country for Old Men as ‘Demographic Tsunami’ Begins – Bloomberg

Hungary Under Pressure – Gates of Vienna

How to understand the federal deficit in 3 minutes

Keynesians insist that what is true of the individual is not true of the national government. They are wrong. We will find out how wrong they are in the Great Default.

Would the Break-Up of the Eurozone Produce a Catastrophe? Yes. For the New World Order

The eurozone of 17 nations has a centralized currency run by a central bank. Why is this good? Why is centralized fiat money better than regional fiat money?

I will extend the argument. The European Union of 27 nations is a bureaucratic monstrosity in which the voters have almost no say. Why is this good for liberty?

Voters in the 27 nations are restricted by the bureaucrats in Brussels from exercising their political sovereignty. Why is this a positive development?

The European Union is a free trade zone. This reduces costs. It increases per capita wealth. But is this increase worth the surrender of national sovereignty? The New Word Order’s corporate oligarchy thinks so. Why should anyone else believe it?

We are told by just about every commentator that the break-up of the European Union, or even the eurozone currency, will produce a disaster. It will for the NWO.

Why will the restoration of considerable national sovereignty produce an economic disaster? Yes, it will produce higher costs, as the legal system adjusts and as the economies adjust. But that is always true all the time. Things change. People adjust.

Where is the evidence that the benefits of restored national sovereignty will not outweigh the losses of a central bank and its manipulated fiat currency. If these NWO types want a unified currency, let them set up a currency system based on the gold coin standard. Let them accept the dictates of the people, who will be in control of the monetary system. This is what the NWO has opposed ever since 1914: the outbreak of World War I. They could have had stable money. They do not want stable money. They want manipulated money and a central bank that bails out stupid bankers who use high leverage yto get very rich. Then they transfer their losses to taxpayers.

Every time you read about how the break-up of the eurozone will produce a catastrophe, ignore it. It’s a lot of NWO propaganda. If some economically naive conservative parrots the words of the NWO, have pity for him. He does not understand economics. He has inadvertently bought into the Keynesian/NWO Party Line.

The break-up of the eurozone means the end of the European Central Bank’s control. It means that the idiot commecials bankers who loaned money to PIIGS governments at 3% will take a big hit. It means the end of cross-border bailouts of bankers. Why would that be a catastrophe?

If national politicians vote to bail out the big banks inside their borders, the voters can vote them out of office. If they refuse, then they bear the costs. Voters across a border don’t. I say this: “Contain the bailouts. Let the EU break up.”

Marc Faber: Sensex may hit 12k-15k, enter India in 6-9 months

Q: What are the expectations you would have of 2012 from equity markets given how bad last year was for equities worldwide?

A: We have to clarify the statement about how bad it was for equities worldwide because the US market was flat and it significantly outperformed most other markets in the world in particular emerging economies stock markets. This resembles the underperformance we had in 2008 that made the major buying opportunity. What we will have in 2012 is initially maybe some further weakness in emerging economies against the US market and then a major low in emerging stock markets, including, India. I was looking for India to bottom out the Sensex between 12,000 and 15,000 and we are getting there slowly.

Q: It’s not just India but all the BRIC markets fell off between 20% and 30% in dollar terms last year. Are you expecting significant outperformance from those markets relative to the US in 2012?

A: What we had in 2008 was the outperformance of the US and emerging economies’ stock markets and commodity markets got hit very hard but it lead to a major low in emerging stock markets that bottomed out between October 2008 and March 2009 and after that emerging stock markets outperformed the US until say the end of 2010.

So I think we may get a similar picture. That’s why when I read all the strategies that say – I think we should invest in the US, I say maybe that’s correct for the next three months or so but I would rather be looking at an entry point in markets like India over the next six to nine months.

Q: Where does all this leaves the commodity markets for 2012? If you had to take calls on gold and crude, how do you think they will do this year?

A: We have to distinguish between precious metals and industrial commodities. My concern is that the Chinese economy is going to be weaker than is expected and that the demand for industrial commodities will probably disappoint. So I am not particularly keen on buying industrial commodities at this stage. In the case of gold, as you know we had a 10-year bull market and we peaked out in dollar terms on September 6. 2011 at USD 1,921 per ounce at which stage the gold price had somewhat overshot on the upside and we are in a correction phase.

I happen to think that the correction phase is not completely over but recently sentiment on both silver and gold have turned very negative. We may have a trading rebound year -trading rally and then some further weakness into possibly February-March and then probably a major low.

Mish 2012 Predictions; 2011 Year in Review with Max Keiser