CREDIT BUBBLE BULLETIN
Q4 2013 Flow of funds
By Doug Noland
I have for some time fretted the geopolitical ramifications of a runaway global financial Bubble and its eventual bursting. From a global perspective, the crazy growth in Fed "money" printing isn't unrelated to Draghi's "do whatever it takes" that is not unrelated to "Abenomics" and crazy printing by the Bank of Japan that's not unrelated to crazy Credit excess in China and throughout emerging markets. All the craziness is symptomatic of deep structural maladjustments in finance and economies on a global basis. And with my view of faltering Bubbles and mounting stress in the emerging markets, I have been on guard for heightened geopolitical instability.
I fear that the unfolding Ukrainian crisis and rising tensions between China and Japan are no mere coincidence. I have no
reason to believe that Russian and Chinese officials are coordinating their geopolitical thinking, maneuvers or strategies. I do, however, sense that the changing global financial and economic backdrop is altering incentives, disincentives and the calculus of cooperation, coordination and confrontation.
The world is indeed changing, but certainly not in the manner those seduced by inflating securities prices behold. Sure, central bank liquidity is still expanding and the global debt mountain just keeps rising to the stars, increasingly unhinged from real economic wealth. Yet the global economic pie has begun to decay. I fully expect mounting domestic economic and global political pressures to increasingly dictate a much more aggressive stance with respect to "geopolitics". More ...
Doug Noland is a market strategist for the Prudent Bear Funds.
(Republished with permission from PrudentBear.com. Copyright 2005-2013 David W Tice & Associates. All rights reserved.)
Q4 2013 Flow of funds
By Doug Noland
I have for some time fretted the geopolitical ramifications of a runaway global financial Bubble and its eventual bursting. From a global perspective, the crazy growth in Fed "money" printing isn't unrelated to Draghi's "do whatever it takes" that is not unrelated to "Abenomics" and crazy printing by the Bank of Japan that's not unrelated to crazy Credit excess in China and throughout emerging markets. All the craziness is symptomatic of deep structural maladjustments in finance and economies on a global basis. And with my view of faltering Bubbles and mounting stress in the emerging markets, I have been on guard for heightened geopolitical instability.
I fear that the unfolding Ukrainian crisis and rising tensions between China and Japan are no mere coincidence. I have no
reason to believe that Russian and Chinese officials are coordinating their geopolitical thinking, maneuvers or strategies. I do, however, sense that the changing global financial and economic backdrop is altering incentives, disincentives and the calculus of cooperation, coordination and confrontation.
The world is indeed changing, but certainly not in the manner those seduced by inflating securities prices behold. Sure, central bank liquidity is still expanding and the global debt mountain just keeps rising to the stars, increasingly unhinged from real economic wealth. Yet the global economic pie has begun to decay. I fully expect mounting domestic economic and global political pressures to increasingly dictate a much more aggressive stance with respect to "geopolitics". More ...
Doug Noland is a market strategist for the Prudent Bear Funds.
(Republished with permission from PrudentBear.com. Copyright 2005-2013 David W Tice & Associates. All rights reserved.)
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