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Not to be outdone by Bernanke’s Mad Money Machine, the European central Bank has magicked up 530 billion euros on the cheap for European banks to gorge on. The mainstream is finally seeing what’s going on. Bob Janjuah, head of tactical asset allocation at Nomura, correctly states:

“We have Monetary Anarchy running riot, where the elastic band between the real economy and the current liquidity-fuelled markets is stretched further and further beyond credulity.”

He adds:

“Bubbles are visible in all asset classes because central bank balance sheets are at the core. If/when the current cycle implodes, central banks which have seen explosive balance sheet growth will add to the problems, rather than being able to act as credible lenders of last resort.”

The phoney, manipulated recovery will implode, but not yet. First will come severe price inflation, the first waves of which are lapping at our feet, followed by central banks turning off the liquidity tap much too late. That’s when another great bust will happen and experts will again claim that “the free market has failed”.

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