Loading ...it might explain what is happening it may not….what I will say is that the economic/political/financial mess in the EU is as said and worse and it is way past time their chickens came home to roost….plus we have the HK situation still festering etc……the Rig is the only reason it hasn’t all gone tits up…so far….Armstrongs models may be right.
Go follow Armstrong Economics. Back at the World Economic Forum in Rome the first of the year Armstrong had said that the models are showing a massive liquidity shortage after labor day as the CONFIDENCE is lost in Europe and in Asia. Capital has been buying treasuries and anything dollar based fleeing the coming collapse the models forecast would start in 2020. Large capital does not trust banks in Europe due to Merkels and the EU Commission policies on bail ins and the models also forecast it will be a miracle if the euro last past 2021 in its present form. Armstrong was told that what Lagarde wants to do is have the euro have an expiration date forcing consumers and businesses to spend or lose it. Armstrong has been warning clients to get out of any sovereign debt especially in Europe as speculators betting Draghi will keep cutting rates as he is trapped has been bidding up prices forcing rates negative and as the ECB cuts, bonds appreciate and they are then flipped setting up the largest bond bubble the planet has ever known. The $100 bill is the most sought after currency outside the US now especially in Europe as capital flees to dollars and treasuries. This has created a collateral crisis in the US as banks and investment banks use treasuries to meet overnight reserve requirements and there is little to be had. Investment banks need overnight funding to meet day to day operations needs as the income flow from financial deals does not always flow on a consistent regular basis. Adding all this up, this forced the FED to intervene all caused by Draghi and his policies in Europe which has created a domino effect causing the massive dollar strength, making the trillions and trillions in dollar denominated loans hard to service especially from the emerging markets, collapsing the banks in Europe who have loaded up on the emerging market debt when Draghi started to charge banks to park capital so they went where yield was all leading to 2020 as we see unfolding now with the collapse in sovereign debt, the pensions crisis there in Europe also as they must hold gov debt with no yield followed by the monetary crisis in 2021/22. I think that sums up the coming collapse very nicely in Europe, Japan, Australia, emerging markets, etc. Didn’t even mention how Brussels Green New Deal is totally destroying the German auto and manufacturing industry along with the rest across the EU, but we’ll save that for another sunny day!
All this will end up causing even more capital to pour into the US and dollar based assets like the US equity markets as capital flees the coming collapse outside the US. The models forecast the US will only be mildly effected because of the strong consumer economy and the shear amount of capital flooding into US assets! The FED’s fear is this will cause even more massive dollar strength and this will collapse not only the international financial system but cause havoc in the US. This capital has been flowing to the US and dollar based assets like the Dow since 2009 and looks like it is not going to let up soon if the models are correct.