Read the story here. Advertise at Before It's News here.
Profile image
By CoyotePrime (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

The Economy: “50 Shades of Dull Gray”

% of readers think this story is Fact. Add your two cents.

“50 Shades of Dull Gray”
by Bill Bonner
Gualfin (“End of the Road”), Argentina – “Life on the ranch: Fatima, a girl of 10, has asked to learn English. She wants to be able to talk to an aunt who lives in New York. What an unexpected pleasure – for us, not for her – it is to give her lessons. We’ll let you know how it goes. 
Now, back on our financial beat… Wow! We never thought we’d have so much help from central bankers. At the start of 2010, for example, we announced our new “Trade of the Decade.”
The idea: Sell short Japanese government bonds, which are doomed, and buy Japanese stocks, which are likely to catch a break after decades in the doghouse. In the event, the break the Japanese stock market caught came to it from the Bank of Japan – more eager than ever to wreak havoc on the economy and its financial markets.
A Wild Ride: We have never seen anything like it. Well, nothing outside Zimbabwe and Argentina, where the authorities put a gun to the economy’s head and pull the trigger once every few years. We didn’t expect to see it in Japan. Or Europe. Or the US. But in all three developed economies the custodians of the banking system seem hell-bent. Which is, of course, where they belong. Too bad they have to take us with them! But it’s going to be one wild ride. 
Yesterday, the Dow fell 128 points, or 0.7%. Gold barely budged. It’s lodged at $1,146 an ounce this morning. But there is a powerful tailwind behind stocks – the hot air and hotter credit provided by the world’s leading central banks. They are driving up stocks, while practically guaranteeing that their nations’ debt becomes worthless. 
First, this report from the Wall Street Journal: “So far this year, $36 billion has flowed into European equity funds and $7.6 billion into Japanese stock funds, with $15 billion going to “international” developed-market equity funds, said fund tracker EPFR. The three categories together more than offset net outflows from US and emerging-market equities, which had previously enjoyed strong gain.
Behind these numbers are the asset-buying programs – also known as quantitative easing, or QE – instituted by the Bank of Japan and European Central Bank.The BoJ’s purchases of both bonds and stock index-based exchange-traded funds are topping up Japan’s financial system each month with an average 6.7 trillion yen, or $56 billion.”
Free Money! The backstory is that central bank policies, which were sold to the public as a way to “stimulate” their economies, have been a total failure. A complete washout. An unequivocal flop. Japan limps along after 25 years of stimulation… with an economy that is not a yen larger than it was two decades ago.
Europe has some bright spots. But it has dark spots too. Put them together and you get 50 shades of dull gray – with bond yields that are perverted and sick. Together, they suggest the continent is being dragged down into a black hole from which it can never return. 
What else could happen when governments can borrow at a rate of less than zero? How will they say “no” to citizens who want more health spending… better pensions… and a municipal pool? It’s FREE MONEY, for Pete’s sake. And if they can’t say “no” to free money… where will the spending – and debt – stop if not at the bottom of some dark and depressing hole somewhere?
Hotter Than Napalm: Meanwhile, the brightest spot on the planet is the US economy and its unbelievably brilliant, shiny and sparkly dollar. Heck, it’s hotter than napalm. And more attractive than an unexploded grenade. But is it something you want to play with? 
Here’s Bloomberg with a surprise: “It’s not only the just-released University of Michigan consumer confidence report and February retail sales on Thursday that surprised economists and investors with another dose of underwhelming news. Overall, US economic data have been falling short of prognosticators’ expectations by the most in six years.
The Bloomberg ECO US Surprise Index, which measures whether data beat or miss forecasts, fell to the lowest since 2009, when the nation was in the deepest recession since the Great Depression. This month alone, personal income and spending, manufacturing as measured by the Institute for Supply Management, auto sales, factory orders, and retail sales have all come in a bit weak.”
Let’s see – more than two decades of failure in Japan… six years of failure in the US (we won’t mention the decades of flops and foolishness that preceded the crisis of 2008)… and in Europe, Mario Draghi promised “whatever it takes” to revive the ailing economy. But whatever it took was apparently not what it got. Now it’s going to get more of it. Draghi is pumping in another trillion euro by way of QE. All over the developed world, the policies that failed are not being thrown out; they’re being stepped up. 
“Stooopid,” we said to Fatima. “Stoopeed,” she replied. We recognize that our views sometimes seem contradictory. For example, we see central banks pushing up stocks. But we still advise readers to get out. Tomorrow – we attempt to explain ourselves. Stay tuned…”


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Immusist Beverage Concentrate - Proprietary blend, formulated to reduce inflammation while hydrating and oxygenating the cells.

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.