And Back To The Inferno
Tyler Durden's picture
Submitted by Tyler Durden on 05/30/2012 08:06 -0400
Central Banks
China
European Central Bank
European Union
France
Germany
Greece
Ireland
Portugal
Real estate
Reality
Recession
From Mark Grant, author of Out of the Box
And Back To The Inferno
“There is nothing wrong with being scared; it is what you do when you are scared that is essentially important.”
The Wizard
It was in the fall of last year when one of the largest money managers on the planet wrote to me and said that business would be scarce as I had scared him sufficiently. I have thought about this repeatedly since then. As I look down the long road from our present position I ask myself, “Did I scare him enough,” because I fear I did not. It was around the same time that I predicted the ten year Treasury was going to 1.25%; a number that draws ever closer as Europe comes unglued which will just be the first step to falling apart.
I have predicted many things since I took my first step on this path in January 2010 when I said that Greece was going down. I later marked the exit for Ireland, Portugal and predicted Spain which is just about to fulfill my observation. Solvency is never solved by liquidity and austerity in a recession only makes the recession worse. There is talk, this morning, that the Spanish Central Bank Governor is the fall guy for the government as he is resigning and leaving his post early but this may not be the reason at all for his departure. There are whispers that he does not wish to preside over the Central Bank when Spain is dragged by economics to the bastion of remorse and extends its begging cup in hopes of nourishment. There is also talk that outside auditors are coming to examine the banks’ books and that the valuations for the Spanish Real Estate and construction loans may not be, how shall I put this, Kosher.
“Truth hurts. Maybe not as much as jumping on a bicycle with a seat missing, but it hurts.”
-Naked Gun
The backdrop for all of this should also be squarely in your sights. The world came out of the American Financial Crisis based upon the expansion in the monetary supply. A huge amount of the stabilization since then and one giant reason for the corporate profits that we have had in America has been based upon this stimulus and this is largely ignored in the press which credits everything in the world but the stimulus for our better economic conditions. Consequently we all should square off with the reality that is now clearly in our sights and that is NO MORE STIMULUS. The Fed has stopped, the ECB has quit and China is paddling in the same boat so that everyone’s expectations should be curtailed by the facts; the stimulus in the world has ended and it is to be sink or swim now based upon fundamentals and not the largesse of the world’s central banks. Neither do I think they will be back anytime soon and if any one of them returns it will mark an exaggerated decline in economic conditions that will signal a severe impairment and it will not be a cause for joy rather a cause for the reintroduction of Fear that we are all about to enter the gates of Dante’s Inferno once again.
Hell is where the chefs are British, the mechanics French, the lover's Swiss, the police German and it's all organized by the Italians.
The newly elected President of France ran and was elected based upon any number of positions that fly squarely in the face of the yet to
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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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