History is in the making. By history, I mean that the current financial environment has been evolving towards a critical inflection point unparalleled in the annals of finance and economics...courtesy of modern day technology enhanced central bank inflationism.
But since markets represent a process, the ramifications of current developments will be markedly different as time goes by.
And as part of the progressing symptoms, no less than mainstream media have been caught in the maelstrom of the widening abyss between the effects of inflationism in the financial world as against the real economy
An article from the Wall Street Journal as quoted by the Zero Hedge:
What exactly is the market trying to say about the state of the global economy? Do the recent record highs in U.S. stock markets signal growing confidence in the recovery, or do soaring government borrowing prices and flattening yield curves as borrowing costs tumble at even long maturities signal market fears that the global recovery is a distant dream?
How does one reconcile this year’s 30% rise in the price of gold—usually considered a hedge against inflation—with long-term swap rates suggesting inflation will remain low for years? And how does one explain the strength of European markets as many banking shares are trading at more distressed levels than at the height of the global financial crisis?
One answer to these disparities is that the markets have become so distorted by central bank activity that they are no longer transmitting very useful information about the economy at all.
Given that mainstream media has expressed on such patent discomfort. Such should account for manifestations of increased angst or apprehensions by even the elites.
As evidence, for insurance purposes, the wealthy or billionaires have been stashing record cash reserves. From CNBC:
The world's billionaires are holding more than $1.7 trillion in cash — the highest amount since one firm began recording the measure in 2010.
Because of what they perceive to be growing risks in the economy and world, the world's 2,473 billionaires are keeping 22.2 percent of their total net worth in cash, according to the Wealth-X Billionaire Census.
And some billionaires have even bet heavily against the current tide.
And this only tell us how inflationism has been driving a wedge between policymakers and even the supposed beneficiaries of the "wealth effect". Nevertheless increasing tensions or pressures will eventually find an outlet valve...soon
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