Monday, May 8, 2017

Why money printing can resume in the US and other countries

In the US we are now eight years into an economic expansion. This is a very old expansion. We are more than eight years into a bull market which is a very old bull market. If the market goes down substantially, we have a recession again and we expect that in the next 1-2 years, then the Fed, in my opinion, they will launch qualitative easing -QE 4. They may not call it QE-4, they may call it helicopter money or Trump money or whatever it is. But I think they will print money as they have in Europe and Japan up to this very date.

Deutsche Bank has recently produced a statistic or it was Bank of America whereby in the first three months of this year, the balance sheet of the ECB and the Bank of Japan (BoJ) increased by more than USD 1 trillion. So, annually, by close to USD 4 trillion, we still have money printing and we do not know where it will end. I think it will continue because that is all they can do.