The Swiss National Bank abruptly decided to abandon the franc’s peg to the euro. The people of Greece told the EU to “take a hike” in their election. And earnings estimates are rolling over in quick fashion. All of these factors put pressure on most commodities (except the precious metals) and equities. As currencies gyrated, high quality bonds were sent to record low yields.
The inevitable loss of faith in the myths of the central planners appears to be percolating.
We continue to believe in investment math. This discipline may be tested by the ECB’s commencement of QE in coming months. Plus, there will almost certainly be some more myth telling to accompany these efforts.
However, the lack of success that has come from excessive money printing in recent times should serve as a warning to herd followers. This EU money printing Ponzi scheme is simply like trying to push a boulder uphill. And there’s no reason to get crushed when gravity takes over.
The views expressed on this blog are the opinions of the authors. This information is not intended as investment advice or to recommend the purchase or sale of securities. More information on Strategic Balance, LLC may be obtained by contacting investor relations.