On the back of this we have governments talking up the economy with 'green shutes of recovery' and 'increasing GDP' (albeit fractional) in order to sell bonds and treasury bills. The problem is this 'bull market' they want us to believe in doesn't exist, they will simply short the market with the stocks that they are peddling further down the line.
In addition to this the IMF World Bank meetings in Washington confirm a cut in global growth in 2014 to 3.3% adding to which there is no foreseable upturn sometime soon. Last week amidst the woe-ful slow down of world economic growth and the IS threat it was interesting to see gold jump up by £15/oz.
At present there is huge debt in the world financial system with asset values being propped up by low interest rates. This is not a sustainable position. The dollar is in decline despite endless rounds of QE. The Fed can have little left in its armoury now to prevent the inevitable. At the same time in Europe we have the 'engine room' of the eurozone the Dax which hit 10,000 in the summer and fell to 8,700 last week. As I write this today, 16th October 2014, bonds from Spain and Greece have tumbled. Oil too has fallen to a 5 year low with prices below $80 a barrel largely due to the oil glut.
So are we heading for a collapse? It looks inevitable, but the question is when? And that's a tough call to make. All the signs seem to be in front of us; commodities down, stock market down and property bubbles on both sides of the 'pond' cooking. A big positive to take from this is, with any major market correction prices tumble, which subsequently presents us with good buying opportunities of new assets.
If there is to be an economic power shift from west to east it's worth bearing in mind that both China and Asia place great value on precious metals both culturally and as an investment. This is born out in the vast quantities of gold silver and copper they have been buying up. (I've mentioned this before http://tinyurl.com/k8memz4). With this in mind and the greatly deflated prices of gold, silver and copper it might be prudent to take a punt for the long haul. Perhaps now is the time to make that investment in precious metals!
If this has been of any interest or help please share. As always your comments are most welcome!