Finally we taper. Last week Ben Bernanke saved the dollar… I mean stopped raping the dollar quite as hard as he had been. He’s going to trim QE by $10bn per month and slow down his dishing out of the funny money to £75bn a month.
It’s the biggest news in the markets this quarter and something we didn’t think he’d do for a while.
Clever old Ben.
Now if the financial system really implodes in years to come he can claim he had no choice to deploy the policy measures he did in 2008 and then tried to bring it all back. Tried to rein it in. Tried to get back to sound money, sound finance and sound markets.
The changing of the mantels
It’s funny. After Bubbles Greenspan we thought Ben Bernanke was the poor sod – picking up a crock of shit economy, swelling welfare state and crazy president.
Now the mantels are changing.
Janet Yellen now inherits something unimaginably worse. A US economy more drug addicted than eight years ago. A dollar that’s been the victim of the greatest monetary experiment in history. And, a president who whilst being all speeches and no soundness is also an economic knucklehead.
Poor Janet. What a hospital pass.
It’ll be fascinating to see how she manages it. And, it’ll be excellent to see a woman pulling the monetary levers in the US.
A new era in American high-finance starts in 2014.
But, when come the next financial fireworks?
Well, we’ve been waiting a while. How much longer?
After a 12 year gold and silver bull market, the dollar still floats. After 40+ years since Tricky Dick floated the world’s money, things still muddle on.
Some predict another market meltdown before 2020. Some predict a new reserve currency even sooner. The snow is indeed falling, but not even the super far-sighted, fractal visionaries can predict the avalanche.
Certain is not the same as imminent.
Equity markets are strong. Housing too. Unemployment is ticking down. Inflation is still not a problem… well, not really. And, gold and silver have had the living shit kicked out of them this last two years.
It feels so wrong, but so it is.
The ball is really in the court of the emerged Asian nations – now creditors to the world. If they decide the Western bloat is too much they can start a long-term bond bear market. Those who hold the great oceans of accumulated capital are those most able to unleash financial tsunamis.
The Chinese, Indians, Russians and others all have their interests to manage in the currency wars. Janet Yellen has an increasingly powerful BRIC-pack to manage, pander to and try to bluff.
As we wish you a very happy Christmas, we wonder if 2014 will be the year for financial fireworks?