Doug Noland’s Credit Bubble Bulletin: Crisis Management

(Before It's News)

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

wallstreetexaminer.com / by Doug Noland via Credit Bubble Bulletin / February 20, 2016

The current global backdrop remains alarming and, especially on bad days, darn right frightening. Yet as a macro analyst of Credit, money and the markets, I’m the proverbial kid in a candy store.

De-risking/de-leveraging and attendant market tumult (once again) reached the point of provoking concerted global crisis management measures (see “Global Bubble Watch”). Japanese stocks surged 6.8% this week, with Chinese shares up 3.5%. The Mexican peso rallied 3.6%.

This week saw the People’s Bank of China revalue the yuan currency higher (“biggest one-day advance” in more than a decade), a surprise move clearly meant to inflict pain upon the speculator community. One of China’s internationally respected officials reemerged in the public stoplight, with PBOC “Governor Zhou Xiaochuan breaking his long silence to argue there’s no basis for continued yuan depreciation” (Bloomberg). And what would Crisis Management be without talk of boosting government stimulus: “China is stepping up support for the economy by ramping up spending and considering new measures to boost bank lending” (Bloomberg).

With their economy apparently slipping back into recession in the face of ongoing massive QE, Japanese officials are keen to jump on the concerted global crisis management bandwagon. “Bank of Japan Gov. Haruhiko Kuroda… called on finance chiefs from the world’s major economies to find ways to stabilize global financial markets…” (WSJ). And a Thursday headline from the Financial Times: “Japan will have to double down on stimulus to save Abenomics.”

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Thanks to BrotherJohnF

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