Tuesday, December 16, 2014

Euro Zone QE will be the last nail in the coffin for the Euro, the single currency will fail. The moment the ECB pulls the QE trigger they will find themselves in a difficult position. The ECB will struggle to unleash the amount of QE required to drag the Euro Zone out of the economic mire and at the same time QE will silently destroy huge amounts of productive capacity.
The net outcome will have a huge impact on the UK economy. We will import deflation, we will be infected by the Euro Zone disaster. Ramping up the valuations of old houses and importing huge numbers of immigrants is not going to save us.  The time has come for the UK to negotiate a gradual exit from the EU. We do not need to be full members, we only need a customs union and harmonisation of laws. As long as we maintain our place at the Council of Europe we will maintain our legal basis to trade with our European neighbors.  The immediate danger for the UK is an economic stall as a result of Euro Zone QE and the rampant super-USD. Take care , don't take on more debt than is absolutely necessary, look at what has happened to the Japanese economy.... Swapping government bonds for reserves actually *removes* money from the economy because the interest normally paid to bondholders would instead go to the ECB and be returned to the states via the ECB bank dividend.
That's why other asset prices go up. There is less income around in general from assets in the currency.  At best QE relieves pressure to cut spending or raise taxes on the governments, and it is actually simple fiscal policy that increases the level of spending and therefore real activity in the economy.  I think ongoing indicative trends in energy sector , particularly oil and gas seem to be corresponding to predictions made by this writer on 2 June 2014 in article - " Stressful times ahead for world economy in 2015 and 2016" - published online at www.astrologyweekly.com. Briefly speaking, the following were mentioned :
(1). The trends are likely to commence from November 2014 and onwards ;comment(2). The commodities likely to be impacted by the trends include " minerals and metals" and " oil and gas".
(3). Regions or countries which could be possibly be impacted by the likely trends have also been mentioned though this is only artistic interpretation and may not be construed as conclusive.
(4). Readers may like to know that such likely trends are suggestive or indicative and not deterministic. There is always a room for reform and improvement through a still better strategic planning and prudence.
(5) I think a further period of one and a half month covering January to mid February next year 2015 could perhaps be a bit disturbing for, among other things, minerals and metals and oil and gas.

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