Friday, 8 June 2012

Greg Weldon Interview(s): Europe a Forest Fire, Turbulence Ahead


Here’s a three-fer from Greg Weldon, who’s on a roll these days sharing his negative outlook on Europe, Japan, and the rest of the developed world.

First, here’s Weldon with Jim Puplava on the Financial Sense Newshour, where he says Europe has turned into a “forest fire” and Japan is the next major problem area.

Next, an excerpt from Weldon’s Money Monitor, courtesy of John Mauldin’s Outside the Box:
In the meantime, we remain bearish on European stock indexes, along with the US S+P 500 and German DAX. We continue to focus on the Spanish IBEX, the Euro STOXX-50, the ‘Dutch’ AEX, the UK FTSE, and the Italian MIB.
We also remain bullish on the US Dollar, with concurrent bearish focus on the Eurocurrency, the Swedish Krona, the British Pound, the Indian Rupee, the Korean Won, the Brazilian Real, the Chilean Peso, the Mexican Peso, the African Rand, and the New Zealand-Australian-and-Canadian Dollars.
We remain bullish on the US and Australian 10-Year Bonds … and bearish on the Italian 10-Year BTP Bonds.
You can read the full issue of Weldon’s Money Monitor here, in which he advocates the return of the German D-Mark!

And finally, Weldon interviewed by Louis James at the recent Casey conference.
The recovery is a perception that has been generated by trillions of dollars added by the central banks to the system – and I think the answer is a little bit of both. I mean, the reality is that they’ve added trillions of dollars to the system and this has successfully reflated asset prices.

Unfortunately it has not successfully fixed any of the fundamental problems, particularly in the US – housing, labor. Labor is not healthy; housing is not healthy. I don’t care what the pop media wants to tell you – it’s not. The real facts are that there are nine million chronically unemployed people in this country that are not being put back to work. You can’t even generate employment growth that meets the population growth. Without that, and if you don’t generate real income growth, there’s really no housing market reflation to be had. That doesn’t mean housing can’t move sideways, but it’s not growing, it’s not generating wealth for the owners of homes.

Nothing is fixed, and the second central banks stop adding liquidity, markets run into a little bit of turbulence. This is problematic going forward, in terms of having become addicted to this central bank liquidity, and if you don’t have it, running into trouble keeping asset prices inflated.
Video embed here (use link above if this doesn’t show):


Source: http://contraryinvesting.com/financial-gurus/greg-weldon-interviews-europe-a-forest-fire-turbulence-ahead/

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