When Hype and Reality Collide

(Will reality lose?)

Does A Commodities Crash Mean Global Depression, Mass-Devaluation Or Both?

John Rubino on July 21, 2015

First, precious metals peaked and began drifting lower. Then copper fell, oil plunged and it became obvious that these weren’t isolated events. …

(But) the US was reporting lower unemployment … and Europe and Japan had begun aggressive QE programs … So despite the occasional hiccup, 3%+ growth was a lock going forward. … Growth of 3.3% is not bad at all, and it remains the consensus forecast for 2016. …

Can there be growth, inflation and all the other good things that governments have been promising while raw materials prices are tanking? The answer is probably no, which means the other numbers — GDP, deficits, interest rates — will have to be adjusted to conform with the commodities complex rather than the other way around.

Which in turn means that the world’s governments are about to panic. Expect some Hail Marys in 2016, including sharply negative interest rates, a serious war on cash to facilitate those negative rates, and a return to QE in the US, where the idea of raising interest rates will be quickly abandoned. …


About icliks

Biding my time in central ms ... yours too, if ur reading this.
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