Global contagion & QE
Maximilian Walsh wrote a very sobering article for the Australian Financial Review yesterday warning of the very real threat of dire global market contagion highlighted after a week that reported simultaneous slow downs in the US, China and Emerging Markets in the wake of tapering of QE and China’s growing debt bubble fears. He suggests we may well be in a period of “secular stagnation” where the interest rate required to generate the demand to drive employment and growth is negative for a long time. i.e. zero interest rates are too high and the unconventional policy support [ala Quantitative Easing] needs to continue. Whilst not a nice prospect, it bodes well for owners of real gold and silver.