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The great Keynesian
lunacy is finally beginning to end.
Generally since 1999, and
especially since 2008, the financial world has been dominated by Keynesian
lunacy. Collectively, Central Banks have cut interest rates over 500 times
and printed more than $12 trillion combating a brief 9-12 month period of
deflation.
The pinnacle of this
madness hit the US in 2012 when the Fed announced an ongoing QE 3 and QE 4
programs. However, globally, we hit peak Keynesian insanity in Japan in April
2013 when the Bank of Japan announced a $1.4 trillion QE program. For clarity’s
sake, this represented a single QE program equal to 28% of Japan’s GDP.
The results speak for
themselves. Japan saw about an uptick in economic growth for two quarters
before the whole thing fell apart. Household spending is down 6% year over
year in July 2014. Japan’s economy shrank at an annualized rate of nearly 7%
in the second quarter of 2014.
The rest of the world
hasn’t fared much better. This is, hands down, the weakest recovery on record
since the Great Depression. By the Fed’s own admission unemployment
is only lower 0.13% better thanks to its insane policies. The negative
consequences have been horrific: with interest rates at 0% those depending on
interest income (retirees and others) have been screwed while the wealthy
elite have been able to leverage up to increase their wealth dramatically.
In a nutshell, we’ve
found that global Central Bank’s Keynesian policies:
1) Failed to
create sustainable economic growth
2) Increased
wealth disparity and concentrated wealth and assets in the hands of the few
3) Wasted
trillions of dollars in capital
With the Fed looking to
end QE completely in October the Keynesian lunacy is finally beginning to
end… for now. Between this and the ECB’s decision to cut interest rates to negative,
the US Dollar has now rallied for 9 weeks straight.
A strong dollar has
historically been stock negative. Which is why the massive stock market
bubble is looking more and more precarious:
Buckle up. Big
trouble is brewing.
This concludes this
article. If you’re looking for the means of protecting your portfolio from
the coming collapse, you can pick up a FREE investment report titled Protect
Your Portfolio at http://phoenixcapitalmarketing.com/special-reports.html.
This report outlines a
number of strategies you can implement to prepare yourself and your loved
ones from the coming market carnage.
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