The world is now six years into history’s greatest concerted monetary inflation. Unprecedented policy measures have incited an unmatched global speculative Bubble. There is the ongoing global securities market Bubble that inflates on the back of central bank liquidity pumping and market backstops. This week, however, provided added confirmation of the ongoing deflation of the “Global Reflation Trade.” I believe history will look back on the crude, commodities and EM currency collapses as warnings that went unheeded in manic securities markets. In the worst-case scenario, the faltering of the global Bubble at the Periphery ensures that central bank liquidity stokes “Terminal Phase” excess at the Core. The global monetary experiment is failing spectacularly, though over-liquefied securities markets remain in denial.
Posted on: Sun, 30 Nov 2014 01:20:07 +0000
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