Salient to Investors:

Paul B. Farrell writes:

  • 2014 is a virtually guaranteed disaster just waiting to ignite. Bubbles are everywhere.
  • Kit Juckes at Societe Generale says all three worldwide financial bubbles in the last three decades – The Asian Bubble in the early ‘90s, Dot-com Bubble of the late ‘90s and the Credit Bubble that triggered the 2008 Wall Street meltdown – were fueled by the Fed keeping policy rates below the nominal growth rate of the economy for far too long. Juckes says we are trapped in the fourth megabubble fueled by the Fed in the last 30 years.
  • Marc Faber says QE will be part of everyday life for the rest of our lives.
  • Mark Gongloff at Huffington Post said the dramatic downgrade of US growth in Q1 revealed the economy’s lingering weakness, exposed Washington’s austerity obsession, and ridicules the Fed’s newfound optimism.
  • says many cycles indicate a stock-market correction or crash is near, with the precious-metals crash which started in April 2013 being the first warning.
  • Bill Gross at Pimco says QE must end as trillions of cheap money has distorted incentives and inflated asset prices to artificial levels.
  • We are in the 5th year of a typical 4-year bull rally – William O’Neill at IBD says market cycles average 3.75 years up, 9 months down.
  • The war in Congress will get worse, upsetting markets and the economy even more. Viz anger after the Supreme Court’s decisions over same-sex marriage issues and gays, anger over abortions, Obamacare, gun control, food stamps, the new voter suppression pushed by GOP governors.
  • USA Today says any jobs recovery is years away in most cities. Meredith Whitney warns that excessive pensions crowd out both liberal goals such as education spending and tax cuts that conservatives want, thus preventing recovery. Corporate pensions are widening the inequality gap. McKesson’s CEO for the past 14 years will retire with a $159 million pension, while the income of America’s average wage earner has stagnated for 30 years.
  • Investors are in denial and won’t get out in time. Wall Street’s returns are just barely beating inflation.
  • Joseph Stiglitz, Bill McKibben, George Soros, the Institute for New Economic Thinking, Al Gore et al say traditional economists are addicted to bad economic theories. GDP is a narrow, misleading measure of America’s long-term growth. Obsessive focus on short-term – stock prices, quarterly earnings, annual returns – is stunting America’s long-term growth.

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