2014 OUTLOOK: Can You Hear the Popping Sounds?
The Tides in have turned watch out below!
Opening volleys of currency wars
Trial and tribulations of CHINESE mandarins
The State of STOCKS
Once again the smell of NAPALM is in the air. Reversals in liquidity and Massive markets reaction to PUNY emerging market outflows PROBABLY signals the next waves of insolvencies are STRIKING as I write this. Most main stream economists, banksters, brokers, governments and public servants are calling for continued recovery in developed world economies; to me it APPEARS we just saw the PEAK.
As Warren Buffet once said “When the tides go out we find out who has been swimming naked” and we are about to see this statement in ACTION!!!
Now the weakest hands (IN AT THE TOP) are set for the firecrackers they call developed world stocks and UBER LEVERAGED financial assets to IMPLODE, blowing massive holes in their portfolios and lives, sparking a momentum driven liquidation as overleveraged players meet their WATERLOO as the leverage which is epidemic in the FINANCIAL Systems and their investment positions FAILS. Most people live in the matrix and cannot SEE as the media and governments in which they have placed their trust BLACK OUT critical issues from their eyes, ears and MINDS. This episode is no different. They are in for a surprise.
I believe Janet Yellen is being met at the door as she assumes control of the central bank to the world by the next CRISIS for the Global financial systems and economies. Every Fed chief in the last 60 years has been subjected to trial by FIRE; hers may be arriving before she does. LET ME BE CLEAR: the GLOBAL financial system and financialized economies CANNOT withstand ANY TIGHTENING and a lot is being SERVED UP NOW! The reason the rout did not start in December is that the actual taper did not start till now.
These challenges include Dodd Frank (stealth political directed tightening and politically directed lending to favored constituents: students, US government and the housing industry to name a few), the taper, and the emerging markets convulsions as investment flows reverse. Take a look at the EM rout which has just unfolded since December’s taper announcement.
This rout has just BEGUN, as the outflows have been PUNY compared the total FDI ($4Trillion foreign direct investment) since 2008. Check out this chart from John Mauldin’s latest Missive (do not miss this it is one of his best ever, http://www.mauldineconomics.com )
This run has barely begun; the first country to set up capital controls will IGNITE the BOMB!
The beginning of the proverbial run on the bank of the emerging world actually began back in May when Bernanke floated his HOT AIR TRIAL balloon of the TAPER. The reaction at that [. . .]