Ambrose Evans-Pritchard is a financial writer who sometimes has a way of hitting the nail on the head while many others are looking the wrong way. Reading him helped lead me to predict the 2008 economic meltdown more than a year before it happened. Now he has written something else that has caught my attention.
When the stock market tanked a few years ago, many ran to bonds. Smarter people, however, got into precious metals because they realized that the govt money printing schemes were going to eventually destroy the value of bonds which are payable in money.
The Federal Reserve and other central banks have been printing money like crazy for several years now with the intention of propping up the stock market and keeping us out of a recession/depression. But they have shot their wad and have reached the point that some are expecting them to pull back.
Note this comment in the article:
"The great question is whether the world economy really is at the start of a fresh cycle of growth, or whether the roaring asset rally of the last few months is another false dawn driven by central bank liquidity that is failing to gain economic traction."
Nothing the govt has been doing has been helping the economy, just the opposite. They have just been kicking the proverbial can down the road, putting off the day of reckoning, and making it much worse when it arrives.
We are now in the trap people have been predicting for decades. We have a bubble economy being propped up by money printing that they cannot stop because they have to continue to pay for the entitlement state and try to prevent the entire economy from crashing.
The current stock market "boom" is a sucker's rally, and the bonds people have been running to are now seen to be in the process of becoming worthless because they will be repaid with inflated money.
If you have precious metals, be very glad you bought them.