EU bail out fails to address or even identify the cause.
Ref: WSJ article ... http://tinyurl.com/5udjn32
Problem solving 101 - Before any attempt to solve a problem can have a chance of success it is vital that the root cause of the problem is correctly identified and thoroughly understood.
Consequently even if the announced agreements are eventually implemented, they are with high probability of being useless.
The proffering of widely misconstrued smoke and mirrors is all that any political body with survival instincts can/will offer.
A systemic consequence originating from the EU is thereby unavoidable.
Expectations of avoidance by the USA and major trading nations due to US dollar 'safe haven' label appear flawed to an increasing extent.
The logical rules of problem solving and the related fundamental analysis of cause and effect cannot remain overlooked indefinitely.
Investors beware. The markets may not be allowed to get themselves ahead of the truth due to the new norm of ongoing Gx manipulation.
The nature of this inevitable 'systemic event' remains indeterminate. The cascaded freezing of most all accounts for an indeterminate period would be a probable consequence.
Back in 2009...
Surmising the Americans cannot have a recovery and a truly strong dollar at the same time. As recovery gathers pace the only direction for interest rates is up (inflationary). Major currencies have been and still are competing for weakness. Quantitative easing devalues a currency, but this must still continue until jobs become self-generating. The ongoing carry trade will not suddenly decide to control itself, the supporting short-term interest rate differentials need to reduce, but how? World population is increasing by over 217000 per day (GeoHive). It is apparent that the smart money is looking for safety (+ growth) in gold and for investment in essential commodities. Gold is still the safest alternative for preservation of buying power going forward. Even when (if) the recovery commences there will then be inflation. The balance of sentiment of the carry trade operatives is controlling day-to-day market direction. Most of the mountain of money that shifted to bonds is still waiting to return to equities and is increasingly frustrated with negative real growth (less risk averse).
October 2010...
Slowly, slowly the impending future unfolds before us and the unwanted days of further reckoning draw ever closer.
A most unprecedented experiment is being played out, from which some may prosper, but many many more may become truly desperate and multiply the numbers of those that are indigent. The stakes are perilously high.
There is no choice here, QE is not optional - it is the only hope left for manageable peace during the passage.
This bid for reparation for the endless wrongful acts of the past generations of American leadership has absolutely no guarantee and affords only hope for a successful outcome against heavy odds.
This hope is almost analogous to a religious belief of everlasting life except that the beneficiaries are not intended to be restricted to the unquestioning and fearful or otherwise indoctrinated faithful.
Should we pray?
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