Headed into the global financial crisis of autumn 2008, the market put aside its concerns about the banking system and fixated on surging growth in emerging markets and rising commodity prices.
The ECB put aside systemic risks and raised rates in July 2008. Shortly there after the poop hit the fan for a third time…(summer 2007, mortgage-backed securities funds imploded, March 2008, Bear Stearns was forced into the arms of JP Morgan and the Fed took $30 bln of their toxic assets onto its books).
In Europe, we’ve had Greece (May 2010), Ireland (December 2010)… What’s the next domino to fall?
Here we are with copper at an all-time high, Oil near $92…
The Fed is hopelessly behind the curve, the thinking goes, and assets have to be snatched up quick before inflation causes prices to balloon…We’ve seen this movie before, and though the dollar emerges from the grave at the very end, it is beaten beyond all recognition along the way…This process may just beginning to gather momentum.
Looks like the sequel is just opening.
