Friday, July 3, 2015

ECB QE & US INTEREST RATE ALL LINKED UP

The time has come when we can unveil that why OPEC and why others are expecting that H2 of 2015 is going to be a great turn around for the Global markets and demand will pick up. Economics have always being cooked with the flavor of politics. US interest rate hike is more driven by politics rather on economic numbers. Further the asset bubbles which have been created over the last 6 years are about to burst out and hence in order to save the same we need a blame child or reason for sacrifice to the global economy on through whom we can hide the true picture of US growth which is not growing actually and also the asset bubbles suddenly going for burst. US needs a concrete recipe for all the things so that asset bubbles goes burst, US elections gets  boost and safe asset class to park money till US elections. . On the other hand we also need an asset class where we could park the money from the bubble burst after the interest rate hikes. Well the rich populations of America which comprises of 20% who control the investment market have to plan accordingly.

A trigger for asset bubbles to burst is required at the same time a asset class to park the returns from the bubbles is US treasury where upon interest hike returns would be better. After the rate hike the US economy would not be able to sustain the hike and this would give Obam’s opponent party a clean highway to win the elections. He will become a superman. Don’t forget that FED Head plays a key role is US election and his position is under the always historically under pressure when new government plans to rule US. Indirectly they are interlinked.  Now coming to Europe and the Greece drama where one question raises that why did not the IMF and ECB did not accept Greece Terms. Well start thinking the reverse way and think why Greece problem was not resolved when we all knew that this problem would create more ripple effects on the global markets due to volatile effects.

ECB bond purchase drama has failed to keep Euro low. Now US interest rate hikes are near the corner hence a strong fresh round of ECB Bonds Purchase plan or QE is required so that the money from US flows into ECB Bonds or QE.  Further asset bubbles in US and Europe would also need some products where returns are safe and good over the next few years may be until US elections. So the best boy to be sacrificed is Greece based on which ECB will come up with more QE and would show the world market that to protect and save the 17 Euro states we are coming up with QE. The stage of Drama is set and we are just in the phase of curtain raiser where Greece advertisement have been played and now we are awaiting for the big movie.
Hence flood of liquidity of Funds into the market and asset bubbles coming down investments would grow and this would create new asset bubbles and demands.

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