Quantitative Easing, Take 3 – The Global Shutdown

posted by Nima

September 15, 2012 · Posted in Global Economics 

QE3 is the ultimate move of desperation. Open ended bond buying and monetization of debt.

So this is it folks: Once people see that this measure, too, will have failed to spur sustainable job and economic growth, there’s most likely going to be no other fantasy left to look forward and cling on to.

Expect gold and other save haven investments to break out, while stocks and junk bonds finally hit their ceiling and economic crises around the world, in particular China, Australia, and Japan, move to the center of attention while the US, too, will enter its next and well deserved recession.

King World News writes:

Today Mish warned King World News that investors should prepare, “… for a big plunge in economic growth worldwide.” Mish also said that despite the plunge in the global economy, “I expect to see gold breakout to the upside and I think we are starting to see that right now. The same thing is true for silver.”

But first, here is what Mish, who runs the Global Economic Analysis site, had to say regarding the plunge in economic activity: “We are seeing a decline in the global economy. China has slowed down dramatically, so any commodity exporters which export to China are slowing down as well. We’re already seeing this happen in countries like Australia. We are also starting to see the Australian housing market begin to crash.”

Government intervention is aggression. Aggression breeds malinvestment. Excessive aggression breeds excessive malinvestment. Excessive malinvestment calls for radical correction. Radical correction is what we’ll get, whether we like it or not.

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