Every now and again we see some things that worry us more than normal or alert us to the fact that things are not as they should be. It gives us occasion to euphemistically “raise the Red Flag”.
This is not in reference to Labour leader Jeremy Corbyn and his Liverpool Conference, just that a red flag seems to indicate a warning is needed.
A Stormy Climate
The climate has battered many parts of the world in the last week, with storms in the USA, the Far East, and we even had the tail end of one which did more damage than we first thought.
Sadly, those storms have not just been weather related. It has been obvious from the news over these last 7- 10 days that things are not well in the world. Journalists who predicted the last Financial Crash were popping their heads up to say that it looks like we might be heading that way again. I have news for them, we didn’t fix the last crash, it has just continued to get worse.
Papering over the cracks will work for only a short period of time. In this sense, short may well mean a few years but it won’t work forever. We have seen and argued the case previously in respect of Quantitative Easing, money printing, and all the other interest rate related methods the governments of the world have used to keep things going and sending stock markets to the sky. It may allow a false sense of security, but everyone, including themselves, realise that in the end the house of cards will fall. They will not have this ammunition next time. Those bullets are duds.
When Gordon Brown says that the bankers should have gone to prison, which he reportedly did in an interview last week, we are minded to ask, well why didn’t they? You were in charge at the time. Failure to act in a decisive way back in 2007 has just meant that next time it will be worse.
Times are Changing
In relation to our favourite precious metals, gold and silver should be much lower than they are. If everything in the garden is rosy, why has gold in USD only dropped around 100 dollars this year? If the US economy under President Trump is so fabulous - why is gold not on the floor? There should be no need for anyone to be buying at these levels. Gold is having a rest. It is fighting to stay above 1200USD and the next move could well be upwards.
Throw in Brexit and the EU’s stance that there was never ever going to be any meaningful negotiations- for this please take the time to read Yanis Varoufakis’ book “Adults in the Room”. The book discusses Varoufakis’ relationship with the EU and how they never intended to ever fix the Greek issue, just to cover it over and punish the Greek people - and concludes that by Brexit time next year we could see a hard Brexit, an impeached President of the US and an ever-stronger relationship between Mr Putin and Mr Xi.
As the song says- “Times they are a changing”.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.