Axel Merk: Why Asset Prices Must Return To Lower Levels
Saying it's been a busy week and half on the central bank front is perhaps a sizeable understatement.
First, the Swiss National Bank stunned the world (and its brethren central banks) by removing its peg to the Euro. This was quickly followed by Mario Draghi finally making good on his longtime threat of firing QE bazooka, announcing that the ECB will pursue a 60 billion Euro per month easing program for the next 16 months. And amidst all the smoke, the Canadian central bank snuck in a surprise rate cut to its interest rate.
To make sense of both the "Why?" behind these extreme moves, as well as the "What?" in terms of their implications, Axel Merk, founder and Chief Investment Officer of Merk Funds joins us this week.
In his opinion, recent events are exactly the kind the symptoms he's been expecting as the prime strategy pursued by central banks since 2008 — to force capital into speculative assets — approaches its natural and inevitable denouement. Indeed, he projects the surprises in store for us and the systemic instability we're beginning to see are just getting started:
Ultimately, central banks are just sipping from a straw in the ocean. I did not invent that term. Our senior economic advisor, Bill Poole, who is the former president of the St. Louis Federal Reserve taught us this: that central banks are effective as long as there is credibility.
What central banks have done is to try to make risky assets appear less risky, so that investors are encouraged or coerced into taking more risks. Because you get no interest or you are penalized for holding cash, you've got to go out and buy risky assets. You've got to go out and buy junk bonds. You have to go out and go out and buy equities.
The equity market, volatility until not long ago, has been very low. When volatility is low, investors are encouraged to buy something that is historically risky because it is no longer risky, right?
But as the Swiss National Bank has shown, risk can come back with a vengeance. The same thing can happen of course, in any other market. If the Federal Reserve wants to pursue an "exit" to its intervention, if it wants to go down this path, well, volatility is going to come back.
Everything else equal, it means asset prices have to be priced lower. That is the problem if you base an economic recovery exclusively on asset price inflation. We are going to have our hands full trying to kind of move on from here. In that context, what the Swiss National Bank has done is it is just a canary in the coal mine that there will be more trouble ahead.
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Axel Merk: Why Asset Prices Must Return To Lower Levels
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Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson, of course. Well, 2015 is certainly proving to be a lot more interesting than 2014. Volatility has returned to equity markets. The oil market, which continues to flounder at less than half its former highs is confounding experts and currency markets. Lots of volatility there as well. Now while the ruble commanded much of the attention in 2014, falling by roughly half, it is the Swiss franc that has so far been the story of 2015.
On January 15, 2015, the Swiss National Bank broke the three year long pay that kept the Swiss franc at roughly 1.2 Swiss francs per euro. Within minutes it soared to just 0.8 francs to the euro causing a lot of mayhem to a lot of trading accounts before finally settling closer to parity with the euro at one to one. To help us understand this move, today we are speaking with Alex Merk President, Chief Investment Officer, and Founder of Merk Funds. Axel is a noted expert on world currencies. He manages several mutual funds that manage currency risk for investors.
Nobody better to talk to about this today; and for years, he has been an outspoken critic of U.S. monetary policy warning investors that the current course risks seriously de-valuating the dollar. He is the author of Sustainable Wealth, a very readable guide to understanding our macroeconomic environment. The risks today investors face and how they can manage their finances to achieve financial stability. Axel, thanks so much for taking the time to join us today.
Axel Merk: It is great to be with you, Chris.
Chris Martenson: Well, you have mentioned that there are some…. You are a critic of the policies that could lead to risk for the U.S. dollar. But let us turn our attention to what happened over in Europe and what is going on there. It is not everyday that a central bank pulls the rug out from under everybody in such a sudden and large way. In fact, as recently as just three days before the move, Swiss National Bank president, Thomas Jordan said the Swiss National Bank would be maintaining that peg. Then bam, the peg is gone. What happened?
Axel Merk: Well, we can talk about it from many different angles. Let me first take the very big picture view. The fact is that central banks have been masking risks. Risky assets do not appear risky anymore. The Swiss franc did not appear risky. As you say, they pulled the rug out. It is risky. That can happen anywhere. Now, and we can go into that in a minute.
Now, let us go a little bit more technical about what is happening here. First of all, there is one thing I agree with that is Jordan. That if you are to remove the peg, you have got to do it instantaneously. It does not do anybody any good, if he is going to say well, maybe I will remove it, and maybe tomorrow, or maybe next week sort of thing. That would call a market that is just going to pile in on that. It is going to cause some other sort of distortions and mayhem. That is no good. The challenge is he really pulled the rug out from under himself as well. The way I see it is – and remember how he got into the office.
There was this predecessor, Mr. Hildebrand, who put this policy into place except that his wife was caught currency trading. He had to resign. Then Jordan came in and as far as I can tell, he is more of a bureaucrat. He is certainly not a charismatic speaker. I do not think he was ever too much on board with this policy. He got cold feet. He basically said, “My God. This is going to get too expensive, if the European central bank is going to age in quantitative easing. Why do we not cut our losses?”
The challenge of it is that even from the Swiss Nationalist point of view, if you put yourselves into their shoes, it was not handled very well. The reason I say that, I have never been a friend of the peg in the first place. But the way it was removed, it was pretty absurd as well. Late November, for example, they lowered interest rates to be negative. Then that worked. That eased the pressure on this Swiss franc.
Well, what a prudent central bank would have done is they could have continued to lower those interest rates. If that did not work anymore, then to evaluate whether to remove it. Whereas they pretty much pulled the band-aid off and stumbled trying to explain it. I would be very surprised if Jordan is going to be in office a few months from now.
Chris Martenson: Well, as you had mentioned, not even the Swiss National Banks seemed to prepare for them. They were holding a huge position in euros at the time they announced the removal of the peg. They took an immediate 18 percent loss on that. Why did not even the SNB prepare?
Axel Merk: Well, because it is impossible in some ways. Because the thing is, you can hold a peg. You can debase your currency at any time. Because you can always print an infinite amount. The only limit to that is political. If you were to never remove the peg, you would never have to realize any losses. That is the academic theory. Now the practice as we see it, it looks a little bit different. Because most of these people do not really like the euro. They do not like to adopt the euro. They kind of like to export things. But when they were – if they were asked how would you like to join the European Union? Would you like to adopt the euro? They would say no.
There is always this risk of a political backlash. Clearly, well, with Draghi about to engage in quantitative easing, the question is, is it worth the risk? Now, the challenge is the arguments that Jordan gave for leaving the peg are the same arguments of why they should have never entered into it in the first place. There is a clear lack of consistent policy. That is one of the things that caught people by surprise. Also note, I have not seen any headlines of folks making hundreds of million off this trade. Everybody I see lost money at this. Part of that is that this is a risk that is all but impossible to manage. The biggest gyration was about a 40 percent move. That is unheard of in financial history to have in the major currency.
Think about if somebody – if a major bank provided liquidity for options, well you do the same thing as in the stock market. They do delta hedging. They offset their risk. Well, you cannot do that, if the next price you get is 40 percent or 20 percent away from the previous move when you are expecting on a typical day to have like a fraction of a percentage move; maybe one, two, or three percent on an extreme day. These risks were all but impossible to manage. The only way to manage that risk would have been to stay away from the Swiss franc in the first place.
Chris Martenson: Well, let us talk about managing the risk as well as a political dimension to this. It was just in November 20th that the Swiss voters turned down a referendum to have the Swiss National Bank hold more of its reserves in gold. At the time, I believe it was the Swiss National Bank president who was out there very loudly saying this would tie our hands. It would not give us very much cover. Did this move here actually – did this confirm or did this refute the Swiss National Bank stance on not wanting to hold gold? That is, did they just give political ammunition to the people who were on the pro gold referendum?
Axel Merk: It gave ammunition to the folks that say that central bankers do not what they are up to.
Chris Martenson: Yeah.
Axel Merk: The market pressures are ultimately stronger. Maybe that the best short-term policies is a prudent long-term policy. Because if you try. I mean, that the reason this quote unquote peg was put in place is because the Swiss National Bank said we do not like this exchange rate here. It hurts our exporters. Let us move it until the market comes our way. Well, guess what, the issue in the euro zone have just been dragged on. Things have not got dramatically better. You can argue whether things got better or worse. Sure enough, there was still substantial pressure on the Swiss franc to strengthen. That means that instead what should have happened, of course, is that….
One of the things by the way that Jordan had said is that this is…. We are doing a favor to Swiss businesses because they have had now a couple of years to prepare for this. Well, the opposite of this is true. In 2011, when the peg was introduced, the incentive for businesses to hedge currency risk was taken away. They trusted their government. Now, they have pulled the rug from underneath them. It caught the business off guard. They ultimately – an advanced economy cannot compete on price. They have to compete on value. When the rest of the world around is in shambles, well what do you do? Do you destroy your own economy? Do you destroy your own currency? Do you blend in better? I sometimes compare it to being in a neighborhood where everybody dumps their garbage in the backyard. To blend in better, the Swiss started to dump their own garbage in their backyard, too. It just does not make any sense.
Chris Martenson: Let us talk about this. You said that a prudent short-term policy is the same as a prudent long-term policy. Now, the Swiss National Bank move, I am interested. Do you think this is just an indication that a small central bank was caught by forces too large for it? Or, does this possibly suggest, gasp, that market forces are actually larger than any central bank?
Axel Merk: Ultimately, central banks are just sipping from a straw in the ocean. I did not invent that term. Our senior economic advisor, Bill Poole, who is the former president of the St. Louis Federal Reserve taught us this. That central banks are effective as long as there is credibility. Now that is so far as what he had said. Now, let me add to that. What central banks have done is as I indicated in the beginning. Central banks have been trying to make risky assets appear less risky so that investors are encouraged or coerced into taking more risks. To no longer have cash because you get no interest or you are penalized for holding cash; you got to go out and buy risky assets. You got to go out and buy junk bonds. You have to go out and go out and buy equities. The equity market, volatility until not long ago, it has been very low.
When volatility is low, investors are encouraged to buy something that is historically risky because it is no longer risky, right. As the Swiss National Bank has shown risk can come back with a vengeance. The same thing can happen of course, in any other market. If the Federal Reserve wants to pursue on this “exit”, and if it wants to go down this path, well volatility is going to come back.
Everything else equal, it means asset prices have to be priced lower. That is the problem if you base an economic recovery exclusively on asset price inflation. We are going to have our hands full trying to kind of move on from here. In that context, what the Swiss National Bank has done is it is just a canary in the coal mind that there might be more trouble ahead.
Chris Martenson: This is a very fascinating topic because this is central to something that I have been warning about for a while, which is that the longer the central banks have waded into and become dominate forces in the markets, they have done a number of things. The most important of which I think you have identified. It is not really the driving up of the asset prices that concerns me near as much as the compression of the risk premium.
We are seeing this now play out in the junk bond market in the U.S. shale plays, right. There were companies there obviously burning cash and obviously very risky players. Obviously exposed to a volatile commodity price; which is oil. They were paying five percent on their junk bonds, nothing even remotely close to anything historically you would recognize as normal.
Let us talk about this for a second. Because you mentioned, very important. I think this is a central concept. The central banks' effectiveness, it continues as long as they have that credibility. You are suggesting here that the Federal Reserve really is going to have an extraordinarily difficult time trying to get away from its accommodative monetary policies. Let us go further. Do you think they can even do it without suffering that loss of credibility without financial asset markets revolting?
Axel Merk: Probably not, and let us start out with the central theme of Janet Yellen these days that investors are encouraged – that the fed will be patient. Well, by saying investors should be patient, what she is really saying is that investors should be complacent. Volatility should stay low because that is the only way that they can kind of start raising interest rates. Janet Yellen has all but promised to be late in raising rates. If you look at some of the economic numbers, we can argue how good the recovery is. But there are some indications that maybe we have not turned the page yet.
Maybe we should not be because we should not be at a zero percent interest rate environment, if things are really that great. If you, as you move higher, these risk premium have to expand as the principle have to be re-priced. We cannot – obviously the Federal Reserve is supposed to focus primarily on the U.S. economy. It should not be worrying about what others do in the world. But the ripple effect, the Wall Street Journal for now has finally started to say well the strong dollar is hurting some exporters. Some people will start complaining. The lower oil prices are destroying the high paying jobs. We are creating low paying jobs.
Wages do not go anywhere. Sure, if you were – if you pushed the accelerator hard enough, we will get some growth somewhere. But I think yes, Janet Yellen is going to have a hard time. If you go back to what Bernanke always used to say. He always said is when you are faced with a credit bust such as the Great Depression the biggest mistake is to withdraw monetary policy, monetary accommodation too early. Meaning, if you tighten too early, the deflationary forces will take over again. That is why – and I am interpreting here. You have got to be late in raising rates; which means that you have to wait until inflation shows its ugly head. Because that is something that the central banks think they know how to handle.
That is why Janet Yellen will be “late” in raising rates. If you ask me whether she can raise rates? Yes, she will be raising rates. But she will be raising nominal rates. If you look at real interest rates, interest rates after inflation, they are negative in the U.S. They are negative in the euro zone. They are negative in Japan. I am almost certain in a year from now, they will continue to be negative in those regions in the world. Because even as nominal rates will go up, I would think that real interest rates will continue to be negative. They might even be more negative than they are today.
Chris Martenson: This is a fascinating idea. Because the central theme and the narrative that you just outlined is look we have got to be patient. Bernanke has said the big mistake is just to come out of this stuff early. Let us talk about Japan for a second. Has Japan not basically proven to the whole world that a central bank can go actually too far and still not achieve its inflationary aims?
I mean, the Japanese bond market, it is now recognized as being completely dead leaving the Bank of Japan as pretty much the sole participant. They have an enormous increase in the monetary base. That has been achieved. Yet, nothing of note is really happening with inflation itself, inflation expectations or economic growth. What is going to be different this time in the U.S. and in Europe?
Axel Merk: I do not think we have seen anything yet with the Japanese by the way. They are taking a step back for now. But they have not handed out cash to citizens yet. There are all kinds of things they will try. I mean, they have Kuroda and Draghi get together. They will talk of something of what else they are going to do. Just because the policy does not work, it does not mean they will not double down. Of course, that causes ripple effects in other markets. Now the one thing that everybody thinks is that okay, the Japanese have printed money. The currency weakened.
The stock market went up. Draghi is going to do the same thing. I am not so sure whether that is actual going to happen exactly in the same fashion because of the headwinds that the Federal Reserve is going to create. I do not think the Federal Reserve will be able to tighten significantly. But they will try. Just the attempt is going to cause ripples around the world. Everybody who knows exactly the playbook; and it is going to play out because it has happened like this before is going to be in for a surprise. That is one of the reasons why volatility is back. As we discussed earlier, volatility is the enemy of inflated asset prices.
Chris Martenson: Indeed, well, it is certainly, we have got volatility coming back. Then let us turn to today's leaked announcement, today being Wednesday. What do we have here? The 21st, and today's leaked announcement was the European Central Bank's quantitative easing program, the QE is now going to pegged at fifty billion euros a month. I guess that is six hundred billion euros a year. Mario Draghi has said with this quantitative easing that Japan has tried and hasn’t worked. The U.S. has tried with questionable results. He says he is trying to fix inflation, which is too low. First, why is low inflation exactly bad for the people of Europe? Second, is that what he is really targeting with QE?
Axel Merk: Yes, a couple of things. First of all we are the day before the actual announcement. We have had just so many leaks about the program that we think we know everything. The only thing Draghi is going to add in the actual announcement is that he is going to potentially modify the program. He has said in the past, he is willing to modify the size, composition, and the pace of the balance sheet. With that he is going to threaten to do more. His bazooka is bigger and so forth. Now, to your question, though. What is he achieving?
Well, that is a fabulous question. Because last time I checked, German five year notes were at negative yields. Even the borrowing costs of the European periphery has plunged. Low interest rates are not the problem that Europe is facing. Europe is facing a lack of structural reform. The one country that has done structural reform is Germany. They are doing actually quite well. They do not need QE. The other countries that should have structural reform, want QE. But once you have, of course, the asset purchase by a central bank, you have a disincentive to engage in structural reform.
What Europe needs is banks that are not impaired. They are working on it. But it takes time. Because in Europe, lending goes to the banking sector rather than to the credit markets. Banks are the traditional way that people get loans. Those are the ones you need to fix. If you want to boost European growth and you want me to get rid of sanctions against Russia. I am not saying politically that is a good or bad decision. I am saying that economically that would boost the European economy.
Printing money does not solve anything. The one thing that printing money does is it puts pressure on the euro even though even there, the announcement of QE, at least with regard to the fed has been far more effective than the actual money printing. In the Bank of Japan, the printing itself also weakened the yen. But the program was magnitudes larger than anything that is proposed anywhere else in the world. It is really questionable how effective is going to be to do what Draghi says. The reason that he is doing it. He says that inflation expectations are too low. He wants to move back up at two percent.
Then, back to your question are low inflation expectation – is low inflation a bad thing? Well, it depends on who you ask. Now, if you have a lot of bet, you want inflation. If you are a saver, you do not want inflation. The interest of governments are not aligned with the interests of savers. That is really the core problem. In the U.S., inflation expectations have also come down, not quite as much as in the euro zone. Bernanke would have spooked by now. But now it said lower oil prices is not the problem. In the U.S. actually some businesses do suffer from lower oil prices, the shale industry. In Europe, the euro zone is an oil importer. Europe benefits greatly from lower oil prices. They should be happy about it. But Draghi is using it as an excuse because weakening the euro is a stimulus that makes the European region, and periphery in particular more competitive. It is far less painful than telling folks that they have to cut their salaries to be more competitive.
Chris Martenson: When you said inflation benefits debtors more than savors; obviously, it hurts savers and benefits debtors. Is that not really actually true, if and only if you have rising income at the same time? I mean, if I am holding a big piece of debt, and we have general inflation. That is costing me more in terms of I do not know my healthcare costs more or tuition costs more. Food and fuel costs more, but my income is not rising. That actually harms me even in the inflationary environment, right?
Axel Merk: Of course, I mean, high inflation has never led any country to prosperity. But it is the path of least resistance. When you have a lot of debt, would you not love it, if the value of your debt was debased? Now, clearly your income has to grow at the same time, otherwise it does not work. In practice, of course, that does not happen. It goes and printing money does not – it does not create real income, and real wages, and so forth. But it makes you live one other day. It eases the pressure. If you can have a magic wand to call the printing press, it is so much more pleasant than if you actually have to engage in structural reform. If you have ever tried or sort of watching your local community when they are trying to take a benefit away. How much of a fight that is. Or, think about international scene, cutting pension benefits is a major battle. Well, why not just have a handout, and print some money? Politically that is much easier.
What has happened, of course, in Europe is that many of the political parties have suffered. More popular and smaller parties are on the rise. That is really one of the dangers when you drag on structural reform that the smaller parties that are on the fringe are crowding out the bigger mainstream parties. The policies those guys want do not necessarily make things better. That means we are going to have a political disintegration. You might have chaos down the road. Then Draghi thinks, well printing a little bit of money, it might not be the bad of, the worst of all choices. He says he is not political because he is just sticking to the legally mandated inflation target of two percent. But, of course, everything he does is highly political.
Chris Martenson: Of course, now for the benefit of myself and some other listeners. When you say structural reform, give us a couple of examples. You might have mentioned a few there with pension reform or things like that. But when you say structural reforms, Germany has undertaken them. Other countries need to. What do you mean?
Axel Merk: Well, structural reform is such a wonderful, benign term. But it really means that countries need to get their act together. It means that it should not take you 12 months to get a license to start a business. It means that you need to balance your book on the government's side. It means that you need to be competitive on a global stage. You need to be, locally be able to balance your books. You can do that by raising revenue or cutting expenses. Well, most of these countries already have very high taxes.
What you need to do is you need to be able to balance your books in a way that does not make everybody suffocate. It means you need to allow people to work. It means pension benefits. It means minimum wages are very harmful and that. If minimum wages are high, many jobs are not being created. If the pension age is too high or if healthcare benefits are too high; and so, clearly we are talking here about very important social issues. It is politically extremely difficult to make some changes here.
Ultimately what it comes down to however is that we have mad promises. With we – I am referring to Europeans, to Americans, and to Japanese. The developed world has made promises they cannot keep. That is the problem. Structural reform is to try to bring in line the liabilities together with the assets. Revenues and expenses are brought back in line at least in the way that they are sustainable. Most of these countries do not think they are going to be debt free. But you have got to be able to live another day. Many of these countries have policies where they can have deficits of say two, three percent, if they were able to achieve it. That might even work for an extended period, if they can get three percent growth. But they have aging societies. But if they do not – and pursue some of these steps and reform, they can never get the growth back. They will just drown in the debt they have.
Chris Martenson: An excellent response. Thank you for that. That really helps clear it up. I think I have got a picture now. The Swiss National Bank has spent three years defending this peg. It is increasingly expensive for them. It is providing limited returns back to their country in terms of export competitiveness, and other things like that. The risk that the cost return ratio, it starts to go a little upside down on them.
Then, Jordan has to be looking forward and saying, my goodness. It looks like Draghi is serious about this QE. This QE thing is going to happen that is only going to increase the pressure. He has got to get out before the – while the getting is still relatively good. In this story, does the potential Greek exit weigh into this at all for him?
Axel Merk: Only that because these fundamental issues in the euro zone have not been resolved, that does create opportunities for crisis to come up. Obviously, we have an election in Greece coming up. Odds are that the current opposition party is going to get huge gains. With that, there is a threat that they are going to be default on their debt. I am actually quite certain that is going to happen at some point and time. They will need to restructure their debt. The question is what are the implications for the euro and for the world?
The big thing that has changed is that a couple of years ago it was the European banks that held the Greek debt. Those were risk adverse investments. In the meantime, everybody knows that Greek debt is risky, which means at least from outside of Greece, the folks holding Greek debt are hedge funds. They are risk friendly investors. That means if Greece is to restructure its debt, it is not going to have – it is not going to cause a financial meltdown. I am sure there might be some nervousness in the market. We have seen that as the markets have turned negative in Greece including the bond markets, the other European markets were pretty much shielded.
There was not a so-called contagion. But, of course, that does not mean that Jordan did not – and the swiss national bank – were not afraid that it might. You just do not know what is going to happen. It comes back to this thing. You need to have a longer term philosophy on how you approach those things. Clearly, the Swiss National Bank did not have it. The summary you just gave; if Jordan had given that summary, I think he would have gotten away with it. Instead, he looked like a school child who did not get his homework done when he gave his press conference.
Chris Martenson: I know that was pretty awkward. Maybe, as you mentioned, you might not be the best public speaker. Let us talk about what this means going forward. From my perspective in my lifetime, it seems to me like central banks have gone from sort of quiet background stewards of fairly ho-hum monetary policy to very active in market engaged individuals to the point that this might be a false perception. You could have a different one. But it appears to me that every time the market seems to have a little bit of weakness, one fed official, or a central bank official, or another comes out and says calming words. This might be on a one percent or a two percent decline; very nominal, tiny down moves.
It feels to me in my seat that it looks like the central bank officials are now so caught up in this narrative of propping markets, of shepherding them, and of being the stewards of them, of rising asset prices. They feel responsible. I might have this wrong. But that is how it looks to me. They feel responsible for things that were not typically in their kitchen such as maintaining market stability and even targeting rising asset prices as if there is a correct value they know. Is that a misperception? If not, where does this mean we are headed?
Axel Merk: I think the perception you are describing is one that many people have. If you ask any fed official, they will deny it. They might not even do it intentionally, at least some of them not. There are a few folks that they seem to have press secretaries these days, these regional fed presidents there to go out and speak on CNBC, and whatnot as much as they can. That is historically not their role and the job that they have. You are absolutely right. They have gotten very involved.
The problem with even in the fed minutes to state that one of the “benefits” of the fed policy has been rising asset prices. They owned the problem. When asset prices come down, everybody is begging the fed to print more money. That is not the role of a central bank. But that is exactly the sort of policies we have put in place. I mean, you have seen all of these tweets and studies that the balance sheet of the Federal Reserve is highly correlated with a length of the FOMC statement and things like that. Things should not be that complicated. That is though the world we have gone to that the central banks manage things more and more.
I mean, basically what has happened is that we have printed all of this money. We have created this amazing asset bubble. The folks who have assets have benefited from that. The folks who do not have assets have been left out. Now we have a call for policies to tax the rich and give it back to the poor. I mean, it is all absurd. Instead, we should have had policies in place that help one build a solid business without any of the distortions of the central bank whereas we are creating these distortions. Then policymakers come in and said, my God. We have got to fix it. Because there are some people that are abusing the system. Of course, people abuse the system because the federal – central bank pretty much forces you to engage in speculation.
Chris Martenson: Yes, very well said. That is pretty much my view at this point and time. As I look at this, everything is hinging then on this central bank credibility. By the way I think they have already lost their credibility with me. Because I do not think you can. They are trying to have the tail wag the dog, right. If they can just engineer these inflated asset prices, the rest will take off. Look, Axel, how many years into this experiment are we?
We have some growth. There is a little bit more in the U.S. than elsewhere. But when you av
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