A Pump Too Far

Every day in every way markets get more bizarre as central banks attempt their manipulations. Abe’s money printing is flooding world markets, driving down bond spreads in Europe as investors seek yield and replacement for the Japanese bonds now owned by the BoJ. Equity markets seem to have taken this as a signal of good times, even though PMIs are sliding around the world as even China is now barely in positive territory and Germany has gone negative. Commodities don’t see the same glare from the future and are sliding as they respond to the decline in actual economic activity. Gold seems to have resumed its slide, and of course bond yields are staying low.

This has all gone too far.

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