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Blain’s Morning Porridge – July 23rd 2019

Blain’s Morning Porridge – July 23rd 2019


“Caught in the chaos of the market square, I don’t know what, I don’t know why, but something’s wrong down there… “

As we are about to find out… Jokes aren’t so funny when you find yourself to be the butt. 

How is a whole country going to feel? I’ve never felt so inclined to punch the TV as when watching an oiky spotty brat boasting to camera in plummy Eton tones about how his vote for Boris will save the UK. Retching noises… 

Moving on… 

Fascinating article in FT this morning written by BlackRock’s head of global fixed-income, Rick Rieder: ECB can boost growth across Europe by buying stocks. Er, I how do I tell the world’s largest investor that’s about the stupidest idea I’ve heard in a long time? I completely agree Europe needs to urgently address and formulate policy to solve long-term and especially youth unemployment – but not through more distorting Monetary Experimentation by Central Banks. Yeah, cos that’s been a massive success..

The danger of a central bank pumping money into financial markets by buying stocks is simple – money invested in financial assets (stocks and shares) stays in financial assets. That’s the clear lesson we’ve seen over past 10 years. Trillions of QE cash has caused massive inflation in financial assets, but barely grazed the real economy. If you want a full explanation, then buy my book: The Fifth Horseman – How to Destroy the Global Economy, for the full theory. 

Even Mr Rieder makes the point the US has created many $1 bln tech unicorns without having to rely to central bank largesse to create and fund them. Why can’t Europe? Clue: it’s not because the ECB isn’t buying stocks!!

 …click on the above link to read the rest of the article…

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