If QE about to shift into overdrive, the stock market is going to rip higher IMHO. It will not pay to have money in savings..you will be eaten by inflation. On the flipside, if the QE experiment comes to an abrupt halt, perhaps due to the shifting political tide in the US, then a severe deflation is in the cards. These are critical times for investors seeking to preserve their wealth. Much more from Ambrose Evans-Pritchard follows:
"The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.
The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7pc in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40pc in a month. This is a volatile index that can be distorted by the supply of new ships, but those who watch it as an early warning signal for China and commodities are nervous.
The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7pc in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40pc in a month. This is a volatile index that can be distorted by the supply of new ships, but those who watch it as an early warning signal for China and commodities are nervous.
Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely (http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm)
because the Fed is soon going to have to the pull the lever on 'monster' quantitative easing (QE)'.
We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable,' he said in a note to investors."
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