This Is The Endgame, According To Deutsche Bank

 

DB’s Jim Reid lays out the “endgame” scenario, one which this website first said is inevitable back in 2009. With Citi and Macquarie already on board, expect what was once merely the figment of a “deranged tinfoil conspiracy-theory blog’s” imagination, to become global monetary policy. And yes, the real endgame is the one we have said from day one: total fiat (and conventional economics) collapse.

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From Deutsche Bank’s chief credit strateigst

Liquidity evaporates in China as ‘fiscal cliff’ nears

Unless China changes course, it is set to tighten fiscal policy by 5.5pc of GDP this year, five times Britain’s austerity dose annually since the Lehman crisis

Nobody can fault China’s leaders for lack of bravery. The Politburo has kept its nerve as the world’s most giddy experiment in credit-driven growth faces assault on three major fronts at once.

Real interest rates have rocketed. The trade-weighted rise in the yuan over the past two years has been spectacular. Fiscal policy is about to tighten drastically as the authorities clamp down on big-spending local governments.

Emerging markets crushed by double squeeze in China and America

China Securities Journal, a voice of the regulators, said: “We cannot use a fast money supply growth as in the past, or even faster, to promote economic growth.”

“I am extremely concerned about China,” said Lars Christensen from Danske Bank. “They are overdoing it and are on the verge of making the same mistake as the Fed and the European Central Bank before the Lehman crisis in 2008, when they failed to see how much the economy was slowing.”