voda schreef op 24 december 2014 12:00:
Dark clouds on horizon for global economy - Analysts view
With 2014 coming to end, analysts across the world have started to look at the crystal ball to see the future ahead
Mr Mitch Feierstein a noted hedge fund manager and author of the bestselling Planet Ponzi has claimed that the real story behind falling oil prices and commodities is the lack of growth in the global economy caused by excess liquidity, too much leverage and debt fuelled recovery, bigger now than when the crisis started in 2007.
In an exclusive interview with Every Investor, Mr Feierstein explained: “The global central banks; the Fed, The European Central Bank, the Bank of Japan, the Chinese and the Bank of England have created so much excess liquidity with their money printing that it has led to inflation of massive asset bubbles, these actions have allowed investors to misallocate free capital on a grand scale into risky asset classes. It has destroyed markets’ normal ‘price discovery mechanisms’ causing mis pricing that distorts valuation and risks. This is turn has reduced demand, leading to less capital investment, more share buybacks, courtesy of zero interest rates, financially engineered higher share prices and earnings per share (less shares) and bigger executive bonuses for positive stock performance. We are witnessing depressed global growth as well as record underemployment and youth unemployment.”
He argues that falling demand for oil, and for commodities in general, notably 50% in iron ore and multi year lows on copper, are together reflective of lower global growth. He explained “It is a pretty big stretch to say that the oil price is being manipulated, if you look at what is happening to the global economy. The real story is that global GDP is falling. Not only is Europe falling into recession but Chinese growth has also slowed markedly. As evidence of a very severe Chinese slowdown he cites falling consumption of electricity and coal. Over in the US, a weak recovery has not been driven by high paying jobs but by low quality, low paying jobs.”
What he contends has been manipulated are official stats on everything from US unemployment numbers to Chinese growth and most global GDP figures. He says “Tomorrow, the Chinese are adopting US and European measures to boost their GDP, so they’ll be able to include R&D, military spending, prostitution and drug dealing to boost their numbers.”
Similarly, he believes that with the Russian economy in freefall, one of the main props to the London property bubble has gone. “The rich Russians and oil rich middle-easterners aren’t now buying so much central London property. There will be a crisis in the UK economy when the property bubble bursts as the recovery has been driven by the property sector. According to the office for national statistics back in September 2013, 1 in 4 jobs created in the past year was in the property sector. The UK is an economy reliant on asset bubbles created by massive debt; for example, the property bubble, stock and bond prices. When, not if, these bubbles burst things will get ugly.”
Despite all the deceit and manipulation by the authorities in an attempt to keep this Ponzi scheme going the cracks, he argues that 2015 could well be the year that reality is revealed.
Seven predictions he does make for 2015-6 are:
1. The Federal Reserve comes back with QE4; because when rates rise at 100 times leverage the Fed and its 5 Trillion dollar balance sheet with no exit explodes; ‘You can never taper a ponzi scheme’.
2 .Slowing of real global economic growth
3. Massive uptick in global credit defaults
4. Greece will default on its debts and probably leave the euro
5. The UK housing market will come crashing down
6. The end of ‘US Dollar Hegemony’
7. Physical gold and silver will rise significantly in price
With inputs from everyinvestor.co.uk