Michael B. Krause

ECB Move: An Opportunity To Trim International Exposure

I wrote an article also dealing with the ECB and received the same anti-US rhetoric in the replies. Clearly there is a large audience caught up in the politics that uses these causes as justifications for their nationalistic or political campaign, clearly disregarding facets of economic analysis that make your point clearly undebatable.

The ECB is straying from its past alliance with the Fed, it appears. Whatever the reason, whether political or out of fiscal responsibility, it is straying. That has implications, however, since we are not isolated economies, and interdependence is a key trait defining our global trade experiment.

Time To Abandon Stocks?

The future of the stock market is entirely dependent on expansionary monetary policy and political stability. When you buy stocks, you are betting on an expanding economy and innovation to occur over whatever time frame you suggest.

All of the evaluation of statistics and precedent will give you false justification for your investment behavior.

Simply put, if the managers of this country do a good job in the next 20 years, stocks will do great. If they goof it all up, you'll lose your money. Its that simple, and thats what you are betting on.

So Much for the Decoupling...

Keep your eye on this chart. Credit spreads. When these blow up, then the market has a reason to sell. Until then, this is completely fear and profit driven (everyone and their mother is short).

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