QE is the connection between international tensions and your investments- Dr. Malmgren

Video: Dr. Philippa Malmgren explaining the connection between your investments and all the geopolitical wrangling taking place right now.

The exec sum:

  • Leading industrialized nations carry (and continue to pile on) unsustainable levels of debt
  • Most options for reducing the debt are non-starters:
    • Reduce current spending- Not good for re-election in a democracy
    • Reduce future spending by cutting retirement and healthcare benefits- Also politically untenable
    • Repudiate debt- Advanced economies run on debt and can’t afford to be cut off from debt markets
    • Restructure debt- Again advanced economies can’t afford to cut off from debt markets
  • But there is one tried and true method

 

  • …. used since money was invented- inflate your way out via money printing
  • Major central banks around the world have all been doing this on steroids since the financial collapse
  • This makes the price of things go up, good for producers and investors, not so good for consumers
  • Where citizens spend a large portion of their income on food; rising food prices = civil unrest and political instability
  • Leaders want to keep their jobs so are determined to secure resources, especially food and energy for their citizens
  • Nearby places that have these resources or are routes to these resources look very attractive to those who need their citizens at least not be too unhappy
  • Just add military and technological might, presto-

 

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