Fascinating video from Bob Janjuah on CNBC Europe. After never seeing the guy in the flesh this is two appearances on TeeVee in 1 month [May 11, 2010: 'Perma Bear' Bob Janjuah on Bloomberg] If you are unfamiliar with this fellow please see the May piece above.
Some of the takeaways from this 17 minute video:
- Those who see positive signs in the US economy that they are living in a dream world.
- “The policymakers' response to the crisis has been new debt and this is an old game,” he said.
- With firms, individuals and ultimately governments set to cut back on spending, growth will fall sharply across the world.
- Janjuah says investors should get into gold and likes big mega cap stocks with no debt, the ability to set prices and exposure to Asia.
- “The US mid-terms will be crucial. We will see a shift to the right as the Tea Party movement demands change.
And the doozy.... if anywhere near accurate: gold, gold, gold!
- “Over the next 6 months we will see private sector deflation pushing 10-year yields down to 2 percent, he said. This will see the policymakers mistakenly attempt to kick-start the economy and market with a global quantitative easing program worth between $10 and $15 trillion dollars.
I share the thoughts that QE is going to come back with a vengeance as fiscal governments can not (Europe) or via political pressure will not (the U.S.) flood the system with government spending again. We shot that load in 08-09. What will be the Keynesian response during the next downturn? There is only one choice left. Hence, it's going to be up to Ben, the Chinese version of Ben, Japan's version of Ben, and maybe Jean-Claude if the ECB wants to lose all credibility (it's well on its way).
But $10-15 Trillion? That's epic. On the plus side with $15 Trillion injected into the global system all stock markets should be up about 200% from here.... green shoots!