Friday 9 June 2017

The waning power of monetary inflation - the asset market crashes get closer to the core

The US/ Chinese policy post-08 was reflate the imbalances again via monetary and fiscal stimulus. Inflation has most impact closest to the source. 

This initially lifted all assets, but since then multiple assets have deflated sequentially. The markets collapsing have gotten closer and closer to the source of the inflation:

Dubai end-09
Greece 10
PIGS 11-12
Hard commodities 11-16
EM 11-16
Oil 14-16 and double dipping now
UK June 16-

What next:
US retail, or CRE
US import/ labour arb industries if BAT tax is passed
France, Italy?
Chinese real estate?
Indebted states like Vene, munis like Puerto Rico (already defaulted), Illinois, Connecticut?

I think it will take 2-3% Fed funds to tip the US economy over outside of a shock or other event.

No comments:

Post a Comment