In the lunar calendar that started February 8, this is the Year of the Red Monkey. I found this description of the Red Monkey quite apt:
"According to Chinese Five Elements Horoscopes, Monkey contains Metal and Water. Metal is connected to gold. Water is connected to wisdom and danger. Therefore, we will deal with more financial events in the year of the Monkey. Monkey is a smart, naughty, wily and vigilant animal. If you want to have good return for your money investment, then you need to outsmart the Monkey. Metal is also connected to the Wind. That implies the status of events will be changing very quickly. Think twice before you leap when making changes for your finance, career, business relationship and people relationship."
In other words, the financial world will be volatile. And few will have the agility and wile to outsmart the market-monkey.
- Beware of increasing financial Repression
- Watch where the global flows of capital are heading
- Expect further strengthening of the US dollar
- Realize that cash is not a bad position in an extremely volatile market. Same with precious metals.
- Why the best opportunities for capital preservation will be local
If you have not yet read The Year of the Red Monkey: Volatility Reigns Supreme, available free to all readers, please click here to read it first.
In Part 1, we looked at the ways fiscal and monetary authorities have attempted to stave off business-cycle washouts, i.e. recessions, and how the fixes have created a global Great Stagnation that is characterized by uncertainty and volatility.
Here in Part 2, we investigate whether the global economy slide into recession, or will new policies such as capital controls save the day? And more importantly, we look to the asset classes where investors can seek safety from the red monkey's antics.Capital Controls
The latest fixes being rolled out by central banks and governments are capital controls—essentially, policies designed to force people to spend their saved-up capital in the home country or invest it in whatever the central bank/state deems supportive of the hoped-for exit from the Great Stagnation.
Negative interest rates are a form of capital control: by charging interest on cash held in banks, governments hope to force people to spend their cash rather than “hoard” it.
Since cash currency is a safe haven from this expropriation, governments are actively seeking to eliminate or limit cash.
When private banks are revealed as insolvent, governments can recapitalize the banks by expropriating depositors’ cash held in the bank—“bail-ins.”
Another expropriation idea making the rounds among “serious policymakers” is forcing everyone with retirement savings to put a percentage of this cash in government bonds—in effect, funding state deficit spending by force.
All of these controls are forms of financial repression—limiting the freedom of people and their capital in order to prop up the privileges of a tiny financial and political elite at the top of the status quo.
To the degree that capital controls inevitably spark blowback and unintended consequences, they add to volatility by...
Daily Digest 3/11 - Good News Friday: Replacing Plastic With Seaweed, Changing How Economics Is Taught
- Changing how economics is taught
- Obama and Canada’s Justin Trudeau Promote Ties and Climate Plan
- Top US International Drug Official Signals Green Light for Countries to Decriminalize
- How Asking 5 Questions Allowed Me to Eat Dinner With My Kids
- Sidekick chemicals reverse antibiotic resistance in microbes
- Spanish company Graphenano claims Graphene Polymer batteries with triple the energy density of lithium ion and commercialization by end of 2016
- New Seaweed-Based Material Could Replace Plastic Packaging
- Americans Want Fewer Politicians, More Sustainability in our Dietary Guidelines
In this week's Off The Cuff podcast, Chris and John Rubino discuss:
- Has A New Bull Market In Gold Begun?
- Maybe, though a short term pull-back is likely
- Has Oil Bottomed?
- Much harder to tell
- Electric Cars
- How long may it really take for them to reach mainstream penetration?
- How Bad Will The Next Market Crash Be?
- Very bad. This next one's for all the marbles.
- Are You Kidding Me? Chinese Exports Plunge 25.4 Percent Compared To Last Year
- Jim Rogers: What to buy, watch and avoid
- ECB pulls out all stops with rate cuts, stimulus boost
- Gold’s Next Move And Price Target
- Is it time for DUST off, Lieutenant? Where is that bird?
- Forget fracking. Choking and lifting are latest efforts to stem U.S. shale bust
- The $9.2 Billion Bet Against OPEC Dominance
- Needless Wars over Oil
- FPL nuclear plant canals leaking into Biscayne Bay, study confirms
- FPL nuclear plant canals likely violating water quality laws
- Dangerous bacteria: Vibro Vulnificus in Florida ocean hospitalizes 13, kills 3
Adam will give a presentation on his & Chris' new book Prosper! at the Grange Hall in Sebastopol, CA on Wednesday, March 30 @ 7pm. Everyone who attends will receive a free copy of the book:
After the formal presentation, Chris will Skype in to join Adam in answering audience Q&A.
To purchase tickets, visit here.