Seriously, I believe WB is the only fund manager that sold all shareholdings, and told his investors they can have their money back, because it is not a good time to be investing in the market at this juncture. You would have to respect that.
Just read a news story that China pumped 1.22 trillion of credit into their economy to reverse the slow down from mid last year. It worked, but how long before that number is 2t for the same effect.... Then 5t.... Then... Then... Then.
The amount of credit in world financial systems is staggering. There surely has never been such a debt binge as this before.
Just read a news story that China pumped 1.22 trillion of credit into their economy to reverse the slow down from mid last year. It worked, but how long before that number is 2t for the same effect.... Then 5t.... Then... Then... Then.
The amount of credit in world financial systems is staggering. There surely has never been such a debt binge as this before.
The markets are pumped up with years of quantative easing and by low interest rate fuelled credit. When the music stops what will happen?
The markets are pumped up with years of quantative easing and by low interest rate fuelled credit. When the music stops what will happen?
No doubt - the silence will then be deafening ...
If interest rates go substantially up, neither the US, nor China, nor any of the larger European countries (and many other countries) would be able to continue to service their debts.
The only viable options I'd see at that stage would be
- basically all world economies defaulting in sync with huge "haircuts" on public and private debt ... or
- inflation rising still faster than interest rates (with inflation basicly repaying the debts).
None of these options would be pretty for holders of bonds or savings / cash accounts.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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