Thursday, December 29, 2011

2012 offers Very Few Reasons for Optimism

[ via Business Insider ] 28 Dec

As the year draws to a close, understandable confusion reigns in the minds of many investors. While short-term indicators, such as consumer confidence, appear to beckon recovery, the longer-term strategic issues remain shrouded in the smoke and mirrors of central bank monetary manipulation. 


From the perspective of someone who has keenly observed global economics for more than a half century, I see little reason to believe that our economic morass will soon improve. Indeed, I do not believe we will see meaningful change until the Breton-Woods era of U.S. dollar dominated paper money finally comes to an end. In other words, our current experiment in unlimited monetary expansion will continue until it explodes, says John Browne at Business Insider



Browne is of the view:
  • American and European Union politicians have shown utter paralysis in tackling intractable economic problems
  • Banks are clearly not lending to small businesses, the vital source of economic recovery
  • The euro is so shrouded in doubt that investors are fleeing to the U.S. dollar and U.S. Treasuries as a safe haven


Unless major structural changes in fiscal policies are combined with sustained economic improvements, there is a significant likelihood that the euro will disintegrate in the coming years. 

Read more: Business Insider

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