QE at $45 billion looks as the last cut for this year
Can we expect further cuts in FED’s QE program? I think NO. $45 billion per month is exactly what the government needs to finance the budget deficit. Up to now the most reliable factor for prognosing the QEs was the need of US federal government of money. So with planned $560 billion deficit, Obama needs exactly about $45 billion monthly. So my prognosis is we saw the last QE cut for this year and may be for a longer period of time.
China becomes top world economy under PPP
Is China already the world’s biggest economy? It depends on the methodology. If calculated as nominal values, USA is still number one. Just like it was in the entire 20th century. Errr… a little mistake. Some years ago, based on nominal values, number one was… Zimbabwe. Yea, with its hyperinflation, even one banknote of 100 trillion dollars was bigger not only than US economy but even than the entire world economy.
Nokia on the road to absorption
Obviously Nokia will survive. One day the company will may be selling anti-gravity engines for spaceships or energy cells based on cold fusion. But it will never be the same Nokia – the legend in mobile phones and market capitalization close to the value of 1 billion troy-ounces of pure gold.
S&P = Serving Politics
The business of credit ratings agencies took another blow after the suicidal decision of S&P to enter officially in politics by involving in the global battle between USA and Russia. By lowering the credit rating of Russia to just one level above junk, S&P showed it is not a professional agency using reliable methods of evaluation, but is politically dependent PR agency. An agency, needed to help American government in a moment it is losing an impressive duel on global stage and falling in disgrace.
Read more...ECB will not start QE, as it is always in QE
Mario Draghi’s comments on bond-purchases are nothing else than a verbal attack on the Euro as a part of global currency war. You don’t need to worry on ECB starting to print too much money, simply because it is already printing. And printing heavily.
The latest results of Greece, Spain and Portugal bond sales showed an enormous demand and that led to very low interests paid on them. For countries that are de facto defaulted this simply means someone with “easy money” has appeared on the market and is buying. And that is exactly equivalent of quantitative easing.
