Global Currency War Intensifies . . . .

[errolanderson]

This morning, the ECB has increased their bond purchase (money printing) program by about 30%. . . . $60 billion to $80 billion Euros per month.

Stock markets are thrilled. More investing and funds parked into equity markets. Bank shares soar. The U.S. dollar rocks higher as the Euro heaves. The loonie is stumbling. Risk-is-again-on, life is good. But that may all change. Central bankers have the steering wheel, but the car is now out-of-control.

Financial markets are pleasantly surprised as a panicked ECB is now 'throwing-the-kitchen-sink' in a effort to battle deflation.

Group . . . this desperation by central banks suggests massive financial market volatility ahead. But for today, everyone is smiling as money printing remains gift wrapped as 'stimulus' to investors, not as the reality of an intensifying currency war due to failed central bank policies . . . .

I had to vent . . .

[ajl]

One would think that after 8 yrs of this policy failing that they would try something new. The other question is why does deflation need to be fought? Deflation benefits the poor. (That is the answer) The lower gas prices lately allowed people in lower wage jobs to keep more of their income. Best thing that has happened recently.

[boarderbloke]

Errol, does it really matter? really, does it matter.

I've had my doubts and fears since the first QE, and the result has been that I've missed some excellent opportunities. Then QEII came along and I was sure the shit would hit the fan. Nothing, so I joined the crowd and have been better off for it. The trend is your friend, and the trend is that people are still sticking in the money and most things are still going up. When the value of lower oil prices start to add to the bottom line of large and small business I think stocks are going to go up even more.

All media and stock reports tell us everything is fine. They say look at the unemployment rate, look at the stock market, look at the USD. Nobody ever mentions those things along with the $10 trillion Obama has added to the U.S. debt. I always say, lets balance the ledger and include the debt added, then lets look just how good is the economy is doing. But no one in the media will mention it, retail investors don't want to hear it and everyday workers don't care, so long as the pension plans are breaking even or are even making a little.

It just doesn't seem to matter.

[cottonpicken]

You can run an engine without oil for a time but we all know what that leads to. This is the same thing and more and more are sencing it everyday. China just went full retard as well

[SASKFARMER3]

The shit show continues!

[errolanderson]

boarder . . . good point.

In my mind, it does matter. The risk to financial markets now (IMO)is now higher than during the sub-prime crisis. Agree with ajl . . . What is wrong with deflationary pressures? Deflation housecleans the inefficiencies out of markets, but a threat to old money in markets. It's easy to run a business during heady inflationary times.

Another question of this brewing currency war; what's the endgame?

If central bank stimulus now has a diminished benefit offering less support and response and central banks have run out of ammo, what will global markets and economies look like one year from now?

[perfecho]

Key words, Errol...."Old Money"...the house cleaning would be detrimental to old money and banks....
Could be mistaken, but...the Federal Reserve is owned by the banks....the Federal Reserve decides when to print extra money to lend to banks..(at a very low interest rate),simplistic however, why would we expect a different outcome?
If I am wrong, please educate me..as I am only trying to wrap my head around all of this...

[tmyrfield]

AS in the movie the big short you can be totally right but if the herd i running against you you'll still be trampled

[errolanderson]

tmyr . . . so true. if one can see the turn in the market road, it often takes longer-than-expected to get there.