Boockvar thinking is pretty much inline how I view of how the markets
can play out. I would like to add, this all implies dollar weakness if
we are indeed going to recover, my analysis on currencies coming will
confirm this scenario...
-Alex
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A recession proof business? Money printing
Posted By Peter Boockvar On July 7, 2009 @ 7:50 am In MacroNotes | No Comments
Comments
today from the British Chambers of Commerce highlight the favorable
backdrop, in my opinion, for hard assets/commodities as they call on
the Bank of England to print more money. Not only do they want the BoE
to complete its current asset purchase plan but “they should go beyond
150b pounds” as while the “worst of the recession is over,” “the
recovery is not guaranteed.” Considering the benign outlook on
inflation many Fed members have, one can assume the Fed’s thinking is
along these lines. If the economy gets better from here, commodities
will rally and if the economy falters again, central bank money
printing goes into overdrive and commodities will likely rally too.
Obama’s CEA head Rommer last week said “we’ll do whatever it takes to
help the economy,” aka, more spending and thus more borrowing. Thus, as
long as the mentality of policymakers remains ‘we need to do
something,’ they will not stop until the economy gains traction. The
euro is back above 1.40 vs the $ after German factory orders rose much
more than expected. European bonds and Treasuries are lower in response
with the 10 yr bond yield rising to near a two week high ahead of more
supply this week.
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2009/07/a-recession-proof-business-money-printing/