Ideas and criticism on modern economy

Liquidity : all equity rallies for more than two years have been initiated by QE programs. What is still worrying in this story is that those programs should have been implemented along with structural reforms in the US and in Europe. And it hasn’t been the case so far.

Under such conditions, it is hard to believe that those QE will have long lasting effects… but no problem, Central Banks have THE solution : just more QEs of course! All this to say that instead of managing this crisis, governments in Europe and in the USA are always lagging behind, just acting as dumbs each time financial markets start to cough.

in the US : depsite the fact that I wonder HOW this country managed to get better job creation and ISM numbers for the past 3 monthes in such global  gloomy environment ( I must be the dumb here), there is still a huge pending danger : a new wave of falling prices in Real Estate.

 In Europe, as long as there is no real strong reform aiming at rebuilding a competitive industrial network in Spain, France, Portugal, Italy, there will not be any good outlook. Those countries entered a very bad vicious circle of high deficit, higher debt, new austerity mesures, lower growth, lower tax income, higher deficit……………. and as long as those countries will rely on state spendings and not private investment to promote growth, this will be the case. Because of this Greece defaults, and as we already said last time, Portugal is on the same path now… soon we’ll see Spain, Italy and France. And all those QEs will not change this fate by themselves.

This crisis is here to last, and to get worse. I’m not happy about this, and somehow scared. But our policy makers are fully responsible for this and those cowards will not tackle the real problems.

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