Economy

The infographic below captures three megatrends that are the driving forces behind global real estate investment.

The economy and, more importantly, inflation really need to tank hard to justify current bond prices and economic growth, and earnings really need to soar to truly justify current stock market valuations. It's not hard to imagine a scenario in which both could be very wrong.

The unwinding of the "Central Bank Bubble" will be worse than either the Dot.Com Bubble or the Housing Bubble. It seems like most investors continue to show apathy even with the warnings by us and quite a few others of the "unintended consequences" of the central banks doing things that have never been done before. Those investors are in good company because it appears to us that the leaders of the major central banks of the world do not have any idea of the "unintended consequences" either.

The Gold/Copper price ratio is a way to examine the state of the economy through the relative performance of the "pro-growth" copper price and the "anti-growth" gold price. This filters out the distorting effect of currency inflation/deflation, and allows us to focus only on gold and copper themselves. In 2016 we have a historically high Gold/Copper ratio, the likes of which we have only seen before in the Great Depression, the "stagflation" of the 1970s, and the 2008 Great Recession. This is a clear sign of a slowing, weakening global economy. Below are the details.

Alan Greenspan, the former Chairman of the Federal Reserve has warned that Brexit was a “terrible outcome in all respects” and that we are in the “early days of a crisis.”

Brexit is a return to inefficiency and trade wars and will spike inflation throughout the whole world. It will trigger a rise in unemployment mainly in Europe, but will also hurt the rest of the world through contagion. [Let me explain further.]

Brexit could be the beginning of a brave new world, in which trade becomes freer and business becomes less burdened by taxes and regulations. The only politician here who is talking about such "radical" ideas is Trump, but he is gaining traction, as did the "leavers" in the UK. There is room for hope.

Might Brexit be just the tip of the iceberg in terms of long-run consequences as it gives vital ammunition to groups that are seeking their own referendums for independence?

Apparently the biggest banks in the U.S. didn’t learn their lesson the first time around because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again! Words: 896

When growth becomes exponential the likelihood is that it won’t last and that there will a substantial move in the opposite direction. This article looks at the unsustainable trends in most asset classes, population numbers, inflation and credit growth and discusses the dire consequences that are most likely to unfold in the years to come as a result.