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The Printing of Money
Central banks are now flooding the world with electronic money that provides a basis for explosive inflation in the future. Why is it unrealistic to expect that a growing number of investors will take the view that some of their wealth is safer in assets whose value cannot be consistently degraded by official policies, because their quantity cannot be expanded without limit by irresponsible governments? [Read more…]
US Federal Reserve
Perhaps the most frightening aspect of the US Federal Reserve’s decision to “print” money on a mind-boggling scale is that if it fails to trigger stronger, sustained growth in the economy, it will seriously damage public confidence in the competence of central banks and governments. [Read more…]
The massive “printing” of money and supply of virtually-free credit by central banks is destroying the foundations of valuation on which investment choices are based.
Printing Money Madness
That’s why we are now experiencing such oddities as investors’ buying index-linked bonds to lock in a negative return. That’s why bonds and equities and gold have all been rising together – they are not offering conflicting forecasts about deflation or inflation, merely rising together on the floodtide of money and credit. [Read more…]
Investors generally are even more confused than normal about where to put their money.
The bond markets, with their record high prices for the lowest-risk securities, suggest a long period ahead of poor economic growth. Equity markets, by contrast, have come through a troubled summer in good shape, suggesting that the gloomy forecasts of a double-dip recession ahead are wrong. [Read more…]
