This last week has left me feeling that the showmanship is draining from Capitol hill and into the markets. As one market opens in this part of the world, it spells a days end in another. I am concerned that we are in more knee jerk territory than practical solution. What is becoming clear is that it is almost certain our Italian friends are not going to recover quickly from this. In fact they are not even expected to make there current payments. Spain sounds like it will just about get there this time round but what happens if the interest rates on government bonds go above 6.9%?
The crazy thing about all of this is that the USA, UK Ireland, Greece, Italy, Spain and Germany. Not including all the smaller country’s that have been badly affected are not the ones in real danger.
No, the ones in real danger are Japan! Yes, the country that had vast amounts of it’s industry destroyed not by the pen or the click of a mouse but an act of god. With the missing and dead in the thousands and swaths of people homeless. With parts of this beautiful country covered in radiation. It would be fair to say that they would be in a similar position to Haiti. Well not quite so. The government are being forced to buy bonds and throw in quantitative easing for good measure Purely to try and devalue there currency in order to maintain there ability sell to the outside world without being over priced.
And what is causing this, that’s right, our bankers. Yes, not content with riding the bucking bronco of recent stock action, they have now turned there eye of Sauron to the few remaining currency’s who have managed to stay stable in all this. Unfortunately this also comes across as a safe heaven to the investment markets. For sure, the west’s vindictive little Troll commonly known as the Euro is now going to have an indirect effect on the Japanese economy whether they like it or not..
With the prospects of some sort of resolution regarding the Euro somewhat in the distant horizon, are the western traders in real danger of screwing up an economy that is effectively bouncing on shit.
In a wicked twist of fate. This last couple of hours has seen vast amounts of stocks sold in the US which has, Via some currency mechanism. Caused several of the main currency’s around Asia to fall rapidly against the Dollar including NZ and Aus.
Because of 24 hour trading, have we reached the point where greater restrictions are required to cope with trading across different time zones. In our brave, new, technologically driven trading floor world, would we be able to tolerate this intervention for the long term greater good. We buy and sell stocks and shares with rules and regulations that have been regularly updated but fundamentally working within an ethos from the days of ticker tape. If we were to bring the original Venetian bankers her in a time machine, I wonder what there impression of there invention would be.