The golden years are behind us. Now we are dealing with these deflationary pressures within the system.
Africa and the Middle East
While the editors here at The Daily Reckoning acknowledge and celebrate Australia’s giddy history as the dominant cricket power, they recognise when it comes to the global economy we’re not quite up there with the big boys.
Because Australia is a small, open economy, as an investor you need to watch developments overseas that can impact here. It might be the US central bank driving up the exchange rate, to European hedge funds shorting the market, to trade agreements in Asia changing the investing landscape.
That’s one reason they Reckon every day. If you need to know about it, they’ll cover it.
I think the ‘longer term’ outlook for iron ore miners is poor. But I wouldn’t bet against them just yet. The market is saying the short term outlook remains strong.
even though Spain’s economy grew last year, it has the second largest deficit to GDP ratio in the EU. And in 2015, Spain failed to fulfil its deficit goals.
What we are witnessing in the US and Europe is the tip of the ‘social and political revolution iceberg’. When people lose jobs, money and hope, the social mood darkens.
The recent stimulus-led growth spike has simply papered over the cracks that are in China’s financial system.
America’s crime-fighting techniques were the subject of one of our Diary entries last week. Readers did not like our comparison of Dublin to Baltimore — not even tongue in cheek.
In a negative yielding world, we are compounding the deflationary problem. Year after year, money is being taken from investors’ principals.
The bad news for the global financial system is that the ‘proverbial’ would really hit the fan if this South China Sea dispute blew up into something bigger.
As the one-year chart of banking sector barometer Commonwealth Bank [ASX:CBA] shows, the sector doesn’t look too exciting.
The issuance of 50-year negative yielding bonds indicates to me that we are reaching the extremities of this economic distortion and disfigurement.
Nintendo’s share price is no joking matter. It surged close to 40% in just a few days due to the overwhelming response to Pokémon Go.
The Deep State is fundamentally a parasitic elite. Their main objective is to transfer wealth and power from the people who earn it to themselves.
If you want to manage your money independently, and provide for you and your family in retirement, you need to learn how to discern your truth from the ‘market’ truth.
It’s all about finding the right balance of growth and inflation — not too hot, and not too cold. Or as the phrase goes: the ‘Goldilocks economy’.
There are no good outcomes with negative interest rates. The lower rates go, the greater the risk of unintended and potentially disastrous consequences coming into play.