There's an old rule of dramatic writing popularized by the great Russian author Anton Chekov: “If in the first act you have hung a pistol on the wall, then in the following one it should be fired. Otherwise don't put it there.”
It's not clear whether or not European Central Bank chief Mario Draghi is familiar with Chekov's famous admonition, but in 2012 he hung a pistol on the wall. That was when he began the first of many, many promises that if worst came to worst he would be do “whatever it takes” to shore up the Eurozone economy, including “unlimited” bond purchases in an open-ended QE. This promise became known as 'Draghi's bazooka,' harkening back to Henry Paulson's observation during the 2008 Fannie Mae / Freddie Mac crisis that “If you have a bazooka in your pocket and people know it, you probably won’t have to use it.”
Unfortunately for Draghi, Paulson ended up having to use his bazooka. Lehman went bust just months after his original pronouncement. Even worse for Draghi, Pauls...
... however the SNB fallout lands and whoever it lands on, it's not doing anything to help the bleak outlook for a world on the edge of deflation.
What we know for sure at this point is that the fallout of this move is going to be massive, long-lasting, and global. Some traders are already predicting the collapse of financial institutions and smaller hedge funds.
There is a case to be made that the potential downside of this round of deflation is worse than catastrophic. There is an estimated $22 trillion worth of global commodities-based derivatives.
For all the hoopla, you might have thought this was going to be something historic. But in retrospect, all the swollen, self-important talk about the Eurasian Union seems horribly out of step with the reality of what has been birthed here.
...deflation remains the bugbear of the Japanese economy, even after the unprecedented easing in recent years by the Bank of Japan.
Why is it that in contemplating the future our thoughts usually turn to disaster and calamity? Why are we seemingly incapable of imagining things going well for a change?
All of these revolutionary actions represent people interacting directly with each other in ways that cannot be interfered with, regulated or proscribed by the globalist institutions that are seeking to bring about their New World Order.
Sanity will likely return once the markets have had time to process the move, but the wild market volatility displayed this week shows just how unbalanced these markets have become and just how delicate the situation is.
Announcements, news and information.
Freeze Dry Guy is pleased to offer this highest quality product at a fraction of the manufacturers, suggested retail price. The Mountain House Freeze Dried Eggs with butter flavor is a must have for your food storage.
If you love Pineapple as much as I do, you’re really going to love ours. We are very excited to offer you our finest quality Pack Away Foods 100% Freeze Dried Pineapple at an introductory price for the month of May.
The creator of the International Forecaster, Bob Chapman.