The Chinese government announced a new initiative in order to attract more private investment in key areas such as energy and healthcare. The Chinese economy has been losing steam for over three years now and GDP growth broke down below 8% with further deterioration ahead. GDP growth below 7% would translate into catastrophic event s for China. The threat of an increase in the jobless rate as well as social unrest would be two developments which would harm the Chinese economy even more than a military conflict. The most populous country in...
TARP, short for Trouble Asset Relief Program, is one of the most idiotic, self-destructive, counter-productive, socialistic and anti-free market programs in our modern history. TARP will be later known as one of the reasons the U.S. economy never had a chance to recover. Taxpayers were forced into a bailout of banks and left holding the bag. TARP was not a capitalistic move, so stop hating and blaming capitalism! You have the right to be mad, but be mad at the core of the idea which is anchored deep in socialistic ideology. Sure, you will...
Mario Draghi, the ECB President, announced yesterday that the ECB stands ready to do whatever is necessary to ensure the Euro will not become an extinct currency. Thanks to his remarks yesterday global equity markets staged a rally and the Euro posted a sharp rally against its major trading partners. Bond markets in Italy and Spain soared as bond traders expect ECB intervention. Traders were desperate for good news and it only took a little spark to ignite the powder keg everyone was tossing around. There are a few major problems in the...
Gold prices rose at the end of trading on Monday against the backdrop of the continuing expectations of new measures to support the economy from the ECB and the U.S. Fed. By the end of the session, August gold futures on the New York Stock Exchange rose in price by 0.7 dollar - up to 1618.70 dollars per troy ounce. Investors are hoping that regulators will take measures to mitigate the current monetary policy on the background of coming the last weeks weak macroeconomic statistics. In particular, as it became known on Monday, the index of...
Over the past 30 months of the Eurozone debt contagion there have been several Hail Mary plays thrown at the markets, but none of them had a long-term sustainable impact as they were all doomed to fail. Politicians and law makers have never addressed the core of the problems and continue to ignore what caused the debt contagion. The newest hype is an unlimited bond buying bonanza by the ECB. Traders drooled over the idea that the ECB may intoxicate its balance sheet with junk bonds from Eurozone members under water. The focus will of course...
