while employment statistics are decreasing. Strange Days indeed!
Hendry on Gold Japan, China, Eurozone and Euro. Einhorn on Quantitative Easing. Both say stuff I have said repeatedly on these pages.
"At present, we have little reason to believe that the data-generating process we are observing here is anything “out-of-sample” from the standpoint of a century of historical evidence."
I disagree, the level of global indebtednss is unprecedented, as is the concommitant level of central bank intervention.
"There is no future tense in Sicillian dialect-that's why nothing get's done."
FT Quotes Artemis. Artemis articulates my analysis of how risks have changed in the global economy.
"In addition by keeping interest rates artificially low the Fed is creating a large funding gap for pension systems and other programs leading up to what could be a demographic time bomb. It is very hard to justify the risk to reward payoff of this monetary experiment. The defense of quantitative easing rests largely on an assessment of what would have happened to the economy absent its support. Nonetheless we should fear the law of unintended consequences because it takes a very small shift in perception to result in uncontrollable socio-economic change. We may get higher asset prices today but at the expense
of inflation, class warfare, social unrest or something even worse tomorrow."
"Moving on, Chanos tackled an even bigger storyline on Wall Street — the belief that the economy is being hurt by too much regulation and uncertainty. This narrative just "doesn't hold" when you look at the numbers, Chanos said. For example, The Fed Register of financial regulation has grown just as much under President Obama as it did under President Bush.
And as for investment: "They say people are holding back investment ... and again, the numbers belie that," said Chanos. "Domestic GDP investment in the U.S. is back up just about to pre-recession levels and bottomed out in 2009, 2010 ..."
The problem, he said, is actually that "the investment we're all looking for is actually saving labor ... Look at what the internet is doing to retail," he added.
According to Chanos, investing in technology that makes things more efficient doesn't save jobs. So we're looking at a capital-labor tradeoff that's been going on for years. In the early years of the Bush administration this was masked by strong construction jobs but since the housing market collapsed, those are gone."
Long time readers of this blog will know this lines up pretty well with my views on structural unemployment.
Those wishing to see the video on Bloomberg.
So if anyone wants to continue to be very bullish about Chinese growth prospects over the next decade, it seems to me that he must address and answer these three questions:
"Wrong on sooo many levels. Yeah, when you "invest" in millions of units of housing that are empty then this is both a misallocation of capital and an overinvestment of capital. You have lit money on fire. This money is gone forever. Also, "The Economist" provides no hope or insight as to why a flawed investment process (driven by corrupt SOEs) will do better the next time around."
I guess we like to hear the same things over and over.
"Reflecting growing signs that the economy may slip into a recession, the BOJ is expected to cut its long-term economic and price forecasts due out at the Oct. 30 review, and admit that Japan remains years away from achieving its 1 per cent inflation target, say sources familiar with the central bank’s thinking."