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There Will Be No Further Global Recovery

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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026974/bond-yields-to-hit-fresh-lows-as-world-recovery-wilts-growls-saxo-bear/

If you thought I was gloomy about the state of the global economy, try Steen Jakobsen from Saxo Bank. There will be no further recovery. We have already enjoyed the good times for this cycle. It is downhill from now on, or at least very soon.

The rise in average 1-year rates from 1.50pc to 1.95pc in the G10 economies over the last year has already been enough to push the whole fragile edifice over the edge once again – albeit with a lag. “The world is in depression. There is no way it can survive higher rates,” he said.

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Steen is a Mish feeder. Nothing new.

If US doesn't hit recession by end of year, and if treasury yields keep increasing, then the Fed may have judged it right.

What do I know? LOL.

Edited by okaycuckoo

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The comments range from very dark to very mental, although I agree that if the banks and supermarkets closed down it would go feral very quickly. As in Death of Grass you need a car fuelled up and ready to go North, away from cities to somewhere you can defend with a water supply. Defending it might mean automatic weapons, don`t know if Amazon sell them?

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Janet Yellen may be a dove but this can be misunderstood. Mr Jakobsen says her disgust over rising inequality trumps all else. She too is suspicious of QE-driven asset bubbles that concentrate wealth yet further.

My own view is that critics of QE misdirected their fire for five years. They kept warning that it must inevitably lead to an inflationary blow-up, and they still do.

Well this critic of QE didn't expect inflation. My own view was/is QE supporting zombies, preventing correction, allowing those who'd made over-expansion mistakes to be super-rewarded for idiocy, and lock in those hyperinflated gains - even over-expand more now during QE (many landlords / fippers).

The critics of that position tell you can't have deflation because of 'human suffering'... people who overborrowed / need a certain income, beholden to one huge over-expanded company run by old-brass with the highest incomes, mansions and second homes bought ages ago pre-hyperinflation, and top-exec cars and super perks and mega-pensions, going on past retirment age just for the hell of it... where they have a job at.... yawn. Like there wouldn't be benefits from breaking up such companies and allowing well-position people to become owners in the whole chain of things.

Ambrose Evans-Pritchard honestly thinks our position was just against risk of inflation? Read way too many fan-boy comments from him about QE.... and only now is it convenient to look at the extreme inequality of policy that doesn't allow failure - even when gamblers have taken the most reckless positions - only constant boom and locking in gains, old positions supported by QE/other stimulus? Older winners kept positioned? That barely gives a look in at that inequality, thinking only of other winners, scaremongering a bust is always terrible for everyone. Give them HTB2....

Ambrose Evans-Pritchard: Farewell QE, you have been a magnificent success

By Ambrose Evans-Pritchard, Dec 18, 2013

The moral contours of QE depend on your angle of vision. But would you rather be surrounded by mass unemployment?

As the US Federal Reserve starts to drain dollar liquidity from the global system at long last, let us celebrate success. Quantitative easing has worked marvellously well. Monetary policy has been vindicated.

The US, UK and Japan are all recovering, moving closer to "escape velocity".

Edited by Venger

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Well this critic of QE didn't expect inflation. My own view was/is QE supporting zombies, preventing correction, allowing those who'd made over-expansion mistakes to be super-rewarded for idiocy, and lock in those hyperinflated gains - even over-expand more now during QE (many landlords / fippers).

The critics of that position tell you can't have deflation because of 'human suffering'... people who overborrowed / need a certain income, beholden to one huge over-expanded company run by old-brass with the highest incomes, mansions and second homes bought ages ago pre-hyperinflation, and top-exec cars and super perks and mega-pensions, going on past retirment age just for the hell of it... where they have a job at.... yawn. Like there wouldn't be benefits from breaking up such companies and allowing well-position people to become owners in the whole chain of things.

Ambrose Evans-Pritchard honestly thinks our position was just against risk of inflation? Read way too many fan-boy comments from him about QE.... and only now is it convenient to look at the extreme inequality of policy that doesn't allow failure - even when gamblers have taken the most reckless positions - only constant boom and locking in gains, old positions supported by QE/other stimulus? Older winners kept positioned? That barely gives a look in at that inequality, thinking only of other winners, scaremongering a bust is always terrible for everyone. Give them HTB2....

Good post. Don`t know what is worse, mass unemployment or mass immigration, one cancels out the other I think?

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Good post. Don`t know what is worse, mass unemployment or mass immigration, one cancels out the other I think?

Mass unemployment wouldn't have been forever - just transitional. People can get new jobs. Work still needs doing, even if it pays less money, under many new owners. Yes some companies that rely on boom easy money would have gone. I was positioned to help a relative buy a part-share in a company - with other younger people fronting their savings together - had it come to market at fair value. I'm convinced QE has helped the older owners ride out difficult times, still with the mansions and top cars and second homes and homes abroad, and constant holidays.

Supermarkets. Got to protect current owners.... !!!! House of Fraser just sold apparently, and it would have sold for less money in deflation too, to new owners, and still be a business - imo).

Loads of new lending and velocity to younger people able to buy housing - currently so expensive - and older people hogging much of the better stock... family homes underused; malstructured.

Edited by Venger

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But would you rather be surrounded by mass unemployment?

That's a laugh.

The UK already has mass unemployment but it's disguised by part time work, zero hours work, phony self employment, unemployed going into higher education etc along with all the various manipulations of the benefits system and statistics etc.

Edited by billybong

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Well this critic of QE didn't expect inflation. My own view was/is QE supporting zombies, preventing correction, allowing those who'd made over-expansion mistakes to be super-rewarded for idiocy, and lock in those hyperinflated gains - even over-expand more now during QE (many landlords / fippers).

The critics of that position tell you can't have deflation because of 'human suffering'... people who overborrowed / need a certain income, beholden to one huge over-expanded company run by old-brass with the highest incomes, mansions and second homes bought ages ago pre-hyperinflation, and top-exec cars and super perks and mega-pensions, going on past retirment age just for the hell of it... where they have a job at.... yawn. Like there wouldn't be benefits from breaking up such companies and allowing well-position people to become owners in the whole chain of things.

Ambrose Evans-Pritchard honestly thinks our position was just against risk of inflation? Read way too many fan-boy comments from him about QE.... and only now is it convenient to look at the extreme inequality of policy that doesn't allow failure - even when gamblers have taken the most reckless positions - only constant boom and locking in gains, old positions supported by QE/other stimulus? Older winners kept positioned? That barely gives a look in at that inequality, thinking only of other winners, scaremongering a bust is always terrible for everyone. Give them HTB2....

The 43% collapse in wholesale gas prices and the collapse in other commodities since the new year supports the fact that speculation and QE were the only things keeping the deflationary wolf from the door.

Why we talk up inflation on here God knows. A house is an inflationary hedge, no inflation and you have buyers that are bent over a barrel for a painful shafting with no hope of redemption and indebted for life.

Edited by crashmonitor

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Well this critic of QE didn't expect inflation. My own view was/is QE supporting zombies, preventing correction, allowing those who'd made over-expansion mistakes to be super-rewarded for idiocy, and lock in those hyperinflated gains - even over-expand more now during QE (many landlords / fippers).

The critics of that position tell you can't have deflation because of 'human suffering'... people who overborrowed / need a certain income, beholden to one huge over-expanded company run by old-brass with the highest incomes, mansions and second homes bought ages ago pre-hyperinflation, and top-exec cars and super perks and mega-pensions, going on past retirment age just for the hell of it... where they have a job at.... yawn. Like there wouldn't be benefits from breaking up such companies and allowing well-position people to become owners in the whole chain of things.

I'd add that QE has now created an even bigger problem those rewarded for idiocy believe they now what they are doing, the central bankers believe they know what they are doing. However at some point a recession will come that they can't "fix" they've just created an even bigger problem however that will be dealt with at some future timepoint, thus its not a problem....

It will be interesting to see how many zombies have used the QE money to restructure but I'm guessing the owners will just have took the money as "their" business plan is working.

Having a recession in 2008 and cleansing the system would have been painful and tough but we would now have a real economic recovery, instead we've just climbed higher to have an even bigger fall at some future timepoint. We are now in a new economic paradigm where recessions have been "banned" only growth of GDP matters to meet all the crazy unfunded liabilities run up by politicians of the past.

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The 43% collapse in wholesale gas prices and the collapse in other commodities since the new year supports the fact that speculation and QE were the only things keeping the deflationary wolf from the door.

Why we talk up inflation on here God knows. A house is an inflationary hedge, no inflation and you have buyers that are bent over a barrel for a painful shafting with no hope of redemption and indebted for life.

:o

Good comment.

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That's a laugh.

The UK already has mass unemployment but it's disguised by part time work, zero hours work, phony self employment, unemployed going into higher education etc along with all the various manipulations of the benefits system and statistics etc.

Simply too many people in the country IMO. The young should get out and vote UKIP, at least let`s have the discussion about forcing down wages with cheap labour.

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Good comment.

Indeed - inflation isn't just 'nice' for current buyers/mortgage holders - it's almost essential... and it isn't coming (IMHO).

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I think they deliberately deceive when they say 'those who were against QE were wrong about a (hyper)inflationary blow up'

Yes, some (Schiff) have been wailing get out of the dollar and buy gold non-stop for the last 6 or 7 years, but others (denninger, I think Mish too) have just said its stealing purchasing power, a couple of percent, each and every year. Which is exactly what has happened.

3 to 5% inflation might not be considered 'massive' inflation, but when wages are rising by only 1 or 2% its every bit as damaging in real terms as the 'stagflation' of the 70s.

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Indeed - inflation isn't just 'nice' for current buyers/mortgage holders - it's almost essential... and it isn't coming (IMHO).

There are only two mechanisms for bringing asset prices and cash flows back into equilibrium in a runaway depression: severe asset price deflation and/or elevated current price inflation. A sovereign debt issuer can always guarantee the latter but the consequences of current price inflation almost inevitably bring about the former too.

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Simply too many people in the country IMO. The young should get out and vote UKIP, at least let`s have the discussion about forcing down wages with cheap labour.

UK wages are going to converge with those in the developing countries which are joining the global labour force. Theirs will rise and ours will fall. This is the logic of international trade, and no politician can do a thing about it short of turning the UK into a North Korea-style hermit kingdom. Since Farage is keen on trade with countries outside of the EU, I'm guessing that's not UKIP's plan.

Falling UK wages wouldn't be such a problem if the central bank would allow the cost of living to fall to compensate. I have yet to hear a UKIP spokesman argue for deflation in living costs to counterbalance their international free trade policies.

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UK wages are going to converge with those in the developing countries which are joining the global labour force. Theirs will rise and ours will fall. This is the logic of international trade, and no politician can do a thing about it short of turning the UK into a North Korea-style hermit kingdom. Since Farage is keen on trade with countries outside of the EU, I'm guessing that's not UKIP's plan.

Falling UK wages wouldn't be such a problem if the central bank would allow the cost of living to fall to compensate. I have yet to hear a UKIP spokesman argue for deflation in living costs to counterbalance their international free trade policies.

...if you think the "masters and servants" scenario is playing out here you are seriously wrong.

..just wait and see what happens to the "masters" after their 15 minutes of fame....it ain't pretty.(actually it's biblically horrid)

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If uk wages fall, or exhibit low rises, then the credit issuers are screwed,

If they rise, then jobs will go and the credit issuers are screwed.

Personally I wouldn't take on large amounts of debt, well ever, but that's just me.

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UK wages are going to converge with those in the developing countries which are joining the global labour force. Theirs will rise and ours will fall. This is the logic of international trade, and no politician can do a thing about it short of turning the UK into a North Korea-style hermit kingdom. Since Farage is keen on trade with countries outside of the EU, I'm guessing that's not UKIP's plan.

Falling UK wages wouldn't be such a problem if the central bank would allow the cost of living to fall to compensate. I have yet to hear a UKIP spokesman argue for deflation in living costs to counterbalance their international free trade policies.

Globalisation isn't inevitable but declining UK living standards for the majority are all but guaranteed.

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Globalisation isn't inevitable but declining UK living standards for the majority are all but guaranteed.

I don't agree. Globalisation is the only way the politicians can keep the goods on our shelves nice and cheap. In an era of stagnant or falling wages, banning cheap imports would be a recipe for electoral disaster and possibly public disorder. This is not the 1920s, people (including the political class) are used to foreign travel and freedom of choice and don't like being told what to do.

We will see what happens to living standards, all I know is I'm personally expecting stagnant or falling nominal wages for much or most of my remaining working life (I am in my early 30s) which is why I refuse to borrow a silly multiple of my salary to buy a house.

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We will see what happens to living standards, all I know is I'm personally expecting stagnant or falling nominal wages for much or most of my remaining working life (I am in my early 30s) which is why I refuse to borrow a silly multiple of my salary to buy a house.

If you are in any way typical this is bad news for house prices- but sadly the supply of greater fools seems abundant at present.

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If you are in any way typical this is bad news for house prices- but sadly the supply of greater fools seems abundant at present.

Do you mean good news?

Don't let the newspeak propagandists get to you, WP. :lol:

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