I think Cruz's reading zero hedge while smoking something illegal. I laughed when he said that he wanted asset values to go up. Asset price inflation is a product of unconventional monetary policy and it hurts the poorest the most.
If countries break down and food prices skyrocket, other countries will 'rescue' them. Maybe defaulting countries will lose control over some of their sovereign rights and resources, but the effects will contained. I doubt this will be America's fate. For the DOW to fall to 5000, it requires a fall of 70%. We didn't even see 20% falls during Greece crisis. The next fall may be 10% over the next couple months?....but that'd just be part of standard risk management around brexit and elections.
Over the next few years, I see financial risk taking declining - there is a trend towards reducing bonus incentives in the banking system to make it boring, in order to reduce the incentive for risk taking. Politicians and people want engineering to take precedence in all sectors excepts financials....
In the markets, I think we will see slow and steady declines(in real terms) over the next few years as risk takers lower expectation for global growth - This would have to be the case until we see more structural reforms in South America, Asia and Africa - perhaps, when these reforms start to take shape, we will see a push towards more risk taking.
If a financial accident were to occur and it is fixed with unconventional monetary policy, we are likely to see huge asset price inflation (which is bad enough already). Governments will do anything to reduce this risk. The stability of the stock markets over the past several years and friendly relations with Cuba, TPP, inclusion of RMB in SDR basket etc indicates that there is global cooperation between major economies. We are likely to see more of this....
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On Monday, I expect DOW to rise once again - buy orders worth over 2.5b notional value were executed at close on Friday. To me this indicates that the recent falls were simply an attempt to book April profits. They're going for another buying spree in May.
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I think Cruz's reading zero hedge while smoking something...
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