The Market Ear – Nov 16, 2022
| Hyperinflation |
| In case you haven’t read the latest note from Elliott management, you should (more here). Definitely nothing for the short term trading book, but still… “The QE balances simply cannot be unwound, and the policy response to the recession will take the $30 trillion balance to what? $50 trillion? $75 trillion? $100 trillion? What force is going to stop this mad expansion other than a global credit collapse? These look like wild assertions, but they sure look like irresistible conclusions to us. Just don’t forget that markets can ignore irresistible conclusions for a very long time, so we do not recommend holding your breath.” |
Elliott: “Investors should not assume that they have ‘seen everything’ on account of experiencing the 1973 to 1974 bear market and oil embargo, the 1987 crash, the dot-com crash, or the 2007 to 2008 GFC,” the fund said.
The surge in U.K. bond prices that sent the pound (FXB) plunging and yields surging demonstrates that real quantitative tightening is not possible, Elliott said….
“But the current situation contains so many frightening and seriously negative possibilities that it is difficult to avoid the conclusion that a seriously adverse unwind of the everything-bubble is ‘baked.’ The world’s major central banks and political leaders are all trapped in a vise of their own creation.”
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