In February it looked as if financial markets were going to crash. They didn't. This is the FTSE 100 index for the first quarter of this year:
It now looks as if it could be said that the panic is over. I beg to differ. Indices do not tell the whole story.
First that is because they can be manipulated. Share buy backs are, for example, a deliberate exercise in share price inflation.
Second that is because volumes matter. And we now know that these have crashed for investment bankers.
Third, we also now know that there is a flight to cash amongst private investors.
The FT index represents the rump of a market from which people are fleeing, making it all the easier for prices to be played. The underlying economic crisis remains. And I am as worried as I was.
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Interesting article from an investors viewpoint….
“The last time the world deleveraged was during The Great Depression. The defining quality of The Great Depression was the destructive deflation that gripped the economy. Deflation destroys financial asset values like stocks and corporate bonds and hard assets like real estate. It also lowers incomes while making debt more expensive to service as debt to income ratios rise. The world economy is on the precipice of another Great Depression”
http://palisade-research.com/2016-the-end-of-the-global-debt-super-cycle/
Well worth reading and contemplating..
Fear of deflation = flight into cash?
Just listened to an Interview with Ann Pettifor (RT’s Boom and Boost program) who fears that Central Banks are in (private) panic and the grip of ideology might not loosen until deflation has got a grip and then it’s too late.
One third of American citizens can just afford the ‘basics’ and we’ve now got ‘generation rent’ pushing up rents – how long can this garbage go on?
Ann is usually right
The article you linked to makes very interesting reading. However, as we know, humanity faces and existenial crisis with respect to climate change & the (urgent) need to make very large-scale investments in low/zero carbon generation coupled to energy efficiency measures. This need for very lareg scale investments sits rather badly with the forcast looming financial crash. Something to think about.
Mike don’t you think though that other factors are causing damage to the environment far more quickly than CO2 emissions. These are:-
1) Leaking nuclear power stations chief amongst these being Fukushima.
2) Deforestation around the world.
3) Dumping of waste from toxic chemicals, (eg fracking industry) to raw sewage in the various waterways of the world.
As far as CO2 goes it is China that needs to clean up its act fast more than any other nation. For some reason , it seems to be given a pass.
The three issues I have identified above are of far more pressing need of attention and could endanger all life on this planet far more quickly than rising CO2.
The fixation on CO2 alone is a scam driven by the elites in order to raise carbon taxes.
Apology to Star Trek, these are not markets as we know them Jim, they are something else.
We need to rightly remain worried because:
1) Unfortunately the wrong people still believe in markets (those for example who have the working lives of steel workers on their hands).
2) Those who do not believe in them anymore who will rotate out of them and then mess up something else instead.
Incidentally, I posted yesterday and today, Land and Deliver and Back to the Land on the subject of the Land Registry privatisation. You may be interested.
So any advice for folks that don’t have company pensions and would like to save a few bob before the end of the tax year. Are cash SIPPs safe?
This site cannot be sued for financial advice
Sorry
Sorry for asking, I realised after pressing send it was not appropriate.
Don’t worry! I just have to be careful
Do you think the US Presidential election might have some relevance in managing a crash?
Thom Hartmann (who has been predicting 2016 for the last couple of years) believes that the Obama will be trying to stave off the next crash just as George W managed to delay the 2007 crash until 2008… neither wanting the crash to happen on their watch.
https://youtu.be/06WOhNgXBZw
Possible…
I am not predicting a crash though
More another downturn