Right now, there’s more than $9.5 trillion in cash on the sidelines – or more than twice the amount of money currently invested in stock mutual funds, according to MoneyNet.inc and the U.S. Federal Reserve. Private equity firms alone are believed to hold as much as an additional $1.3 trillion.
This is the age where politicians get their chance to run up huge debts. “Politics is about what works,” said Hillary Clinton. At least, we think it was Hillary Clinton. Someone said it. Someone who is an imbecile.
We’ve been musing on the fate of US debt for some time now. It’s no secret that we’re bearish on the fate of US Treasurys and the buck. (It’s no accident, dear reader, that your editor lives outside the US of A. We see the threat of inflation on the horizon, a dark and foreboding cloud, and we don’t like it one bit.) And the mixed signals from China and Russia on their Treasury holdings doesn’t make us sleep any easier at night.
I keep marveling at the Financial Times article talking about Angela Merkel, the German chancellor, breaking tradition and ridiculing central banks and their idiotic monetary policies. And apparently her feelings about the absolute stupidity of central banks in general and the Federal Reserve in particular are shared by a lot of people, as more and more countries are now “more resistant to taking advice from Anglo-Saxon quarters,” since they think “these countries’ economic models have been exposed as deeply flawed.”
Chinese business and social culture are generally very subdued and conservative… and above all, respectful. But students at Peking University in Beijing just couldn’t help themselves this week.
Currencies get a tourniquet… BOE And ECB leave rates unchanged…Political uncertainty in the U.K…Aussie dollar to rally further? And Now… Today’s Pfennig!
Can you believe it’s already June? What a month May was for commodities. They are Lazarus, come from the dead to tell us all that the world will not stop turning if there is a financial crisis in the West. Or something like that.
The problem is that the federal debt is rising – and will continue to rise – much faster than gross domestic product, which represents America’s ability to service it.
Back on March 2, I wrote a bullish piece on copper and detailed that the price had stabilized and that the bearish sentiment was over the top at that time. Copper has rallied nicely since then, so I thought it would be a good time to update you on my view.
Should U.S. debt still garner a AAA? One agency shows first signs of downgrade… Alan Knuckman offers “the most important indicator” in today’s market… Chris Mayer’s pair trade “the financial crisis will not undo”… Obama’s latest intervention… how the government plans to fix the derivatives market… A tech industry Patrick Cox says “you want to own” right now