The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Macro, A therapy for yourself might be useful. Before you know the spectre of J.F. Dulles comes back and locks you up for communist sympathies.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
jakurtz, I finally got time to read that WSJ article that you gave me. It's certainly interesting and it comes down to "the US certainly won't become the workshop of the world thanks to the shale gas boom". Indeed they won't and I agree with the author that a certain amount of coporates who face to a lesser degree the impact of cheaper energy, won't feel a big difference when energy gets cheaper: taxes, labor costs, credit writedowns... might indeed have a larger share in the overall costs. However, for the majority of manufacturing like petrochemicals, equipment makers, exploration, the difference will be huge. Railways and trannies will be beneficiary. That's why I bought SAIA a few months ago.
Concerning wiping out all the billionaires, I find that rather rash. You needn't erase completely the Government's debt. A budget deficit of 2-3% would be just fine to keep things under control.
Gold To Rise On The Demand For Savings [View article]
Tom, The ECB wants to get rid of Cyprus. There's something fishy with that supposed Cypriotic natural gas find everyone has been talking about since a few years. I have no evidence, just suspicions. As a Dutchman Dijsselbloem relies on expertise in the natural gas business. He might know more than the Cypriots are aware. If Cyprus was that valuable as a future ng producing country, they would beg the Cypriots on their knees to stay in the Union. Now they almost sent them to Moscow. But again, I have no evidence, just suspicions.
Cyprus's parliament is due to convene this afternoon to debate an astonishing eurozone demand that it tax all bank deposits at up to 10% in return for a €10B bailout. While approval is not guaranteed, Cypriots rushed to take as much money as allowed out of ATMs. And although EU Commissioner Olli Rehn ruled out a deposit raid in other eurozone countries, menacingly for savers, eurogroup chief Jeroen Dijsselbloem would not. "We are in a new world," says an economist. Update: The parliamentary debate has been postponed until tomorrow. [View news story]
Unsure, What does my personal happiness got to do with Cyprus ? This is money and business we talk, not hapiness. Since I am in no position to influence European politics, I can only give my comments according to what I perceive. And what I have been perceiving since 2001 (creation of the euro) is ugly. That opinion will not have caused the ugliness, it is the result of the ugliness. My personal opinion has given me reason to take a defensive action regarding my capital. I can assure you: it's safe. So please, spare me your morality: I have nothing to do with what Europe does, I even don't consider myself as part of this continent. I live in different countries and everywhere I go I'm perfectly happy.
Gold To Rise On The Demand For Savings [View article]
Tom, Apart from inflation, there's that Cyprus-affair too that has caused nervosity among gold shorters these days. And then there are the recent corporate earnings that weren't as good as anticipated, which led analysts to conclude that inflation combined with economic growth won't after all be the mix we'll face over the next couple of months. If you take away growth, stays over inflation. And according to the Ray Dalio asset-class matrix (which is a rather punctual investing tool), gold outplays all the other asset-classes in such a scenario of (even minor) inflation and no growth. Even if the analysts might be wrong medium and LT, that perception is what it is ST. What is your opinion on that ?
Bakken: The Bounty Of Super-Rich Gas - Everything Investors Need To Know [View article]
Thanks for this extensive article, Richard. There's finally something moving in the US manufacturing. I expect the trannies and rail to benefit as well.
Looking at who was behind the massive GLD redemptions early this year, Commerzbank concludes the selling might be about done. Estimating quick-moving hedge funds accounted for about 10% of GLD holdings, Commerzbank reckons they've pared down positions to the point where, if anything, they're buyers at this level. [View news story]
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
jakurtz, Have you read this: http://bit.ly/WMFunb This is the beginning. The rest will follow, be sure, and it will be gigantic.
Up till now austerity in my country meant higher taxes on the middle class, the most productive of society. That's asphyxiating the economy. It's not that kind of taxes I had in mind though. I meant taxes on the very wealthy, those with +1 bn (or whatever number a statistician might come up with) who use their capital to make bets or speculations on very short time, a thing the economy doesn't profit from. Actually, Hollande was not far from understanding that, except he forgot to realise France is such a tiny little country that everyone with a fortune fled to foreign countries as soon as he uttered his first word on high taxing. High taxing to mend current account deficits in a globalized world can only be implemented under mutual agreement of all the world states. I know, that's utopic. I therefore do not think high taxing has much chances to successfully be implemented and I certainly would not advocate it as a medicine to smaller countries. But theoretically, it's the best solution to fight social polarization and enhance growth in an anaemic economic environment. So, in theory I agree with Macro on that topic and under these restrictions.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Stephen, OK on that US corporates' money stashed away. In the meantime it's however a lot of potential not re-entered into the economy. I'm not sure how the fact of babyboomers going on retirement can have a causal effect on unemployment. On the contrary, the more people get retired, the more jobs should come available for younger people. So I think you should look for other causes. But whatever these causes, the figures are what they are and they still don't look nice. I can't agree more with you on the subject of Europe's wrong green energy policies. It's a disaster. Even Germany has to cut on wages to maintain it's high productivity level because of expensive energy costs (due to their decision to end up nuclear energy plants).
"QE because it makes the dollar cheaper" I'm not so sure of that bearing in mind the faint amounts of QE Bernanke applies.
"and for things you don't produce, a vacation to the US will be a dream." I had a vacation in the US in mind though in the second half of this year (need to visit my friends in CA and NM). I know, life will be tough although, as the saying goes, the soup is never eaten as hot as it is served. Right now, I'm more concerned about deflation in Europe.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
jakurtz, For the benefit of brevity, I concentrate on the points of disagreement between us two. First, consumer confidence (cc) depends on a number of factors nobody can evaluate f.i. the weather. There has always been a discrepancy between the real figures and cc. I don't rely on cc therefore unless for trading reasons. But it does not influence my overall strategy. They started publishing cc because they didn't have anything more substantial to talk about.
"companies can not grow further no matter how much free money is out there" The point of returning to the markets for me was that shale gas business developing. We should not forget a few years ago we faced oil prices of over $140/barrel. We're at $93 now, quite a difference and I expect the price to slowly grind down further. We're (you're) only at the very beginning of the consequences of that, and it is hard to imagine the relevancy now, but I can guarantee you it is huge. Energy prices are very slowly coming down, because the oil (and ng) glut isn't fully used yet because of a lack of refining and storage and transportation capacity (environmental issues also are responsable, probably justifiably). A 5% decrease though of energy prices would cause an exponential increase of productivity and investing opportunities. A further decrease of social polarization (I agree with Macro on that topic) is however needed to implement these investing opportunities. That's why I'm favorable to higher taxes, especially on the very wealthy. In general I prefer the spring to the summer season. When everything is still pristine and greenshoots are still hard to detect, is for me the best economic condition. Walmart is the victim of US social polarization (less consumption), but I understand the Democrats are working on that. Fedex is the victim of the strong $ (repatriation costs of FX) and European sluggishness. Caterpillar is a wonderful C° (my uncle has spent his whole life working for it) but the victim of fierce Japanese (and soon Chinese ?) competition and of course the European economic downturn. But what about: http://seekingalpha.co... and there are others as well, in IT, electronics, health services...
I do not know when time will have come to stop QE. Waiting for inflation to pick up might be the wrong strategy because it would mean you're too late (the Titanic-syndrom). I think economic growth is a better indication, but Bernanke is sure smart enough to acknowledge that. Economic growth is indeed still anaemic, but, again, I prefer spring to summer season. I'm aware Larry Fink is a market-vendor, but that doesn't exclude he can be right.
The only thing I'm lightly afraid of, is the black swan: Iran, North Korea, currency wars (Japanese QE could have a much more devastating effect to other countries' exports than US QE has on other countries' exports)...
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Stephen, "In Europe the media tells them that the US is still in bad shape." I have evidence of the contrary.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Stephen, Don't think I question the sense of QE Bernanke applies. It is given the circumstances the best solution. I have explained this several times to Macro too. Doing nothing (as they did beginning of the 30ties) would have had terrible consequences and simply was no alternative. Bernanke deserves a knighthood therefore, because resistance to that policy was in the beginning very fierce, in the US too. It's only when people started to understand the benefits and the positive mechanisms that they changed their ideas.
QE does come to printing money. Let there be no misunderstanding about that. Question is though, is it needed or not. It certainly is to compensate for the uncountable effects of deleveraging. The best way of combatting deleveraging is creating new money... until the economy gets track again. US corporates haven't completely understood that yet: today I saw a Reuters report on cash that is being stashed in tax havens by US corporates: over $1T (Apple, Pfizer, Amazon, Microsoft, Google...), double of 2 years ago. Meaning, these corporates still don't have incentives to invest rather than to hoard.
OK, having said that, if any other country would adopt the same financial policies of monetary easing, they would face a huge raise in inflation. Britain for instance creates a poor £45 bn of QE (buying Gilts) on average a year and the inflation in the UK is already at +4% yoy.
The US monetize by buying $40 bn of Bonds (Treasuries) a month and another $40 bn mortgage related assets (house loans). That is newly created electronic money that is directly injected in the economy, not to be confounded with the trillions they created to save the banks in 2008-2009. The latter indeed never came into the economy because the banks hoarded the money because they saw no investing opportunities or used it to clean up their balance sheets. Hence the subdued growth rate of inflation.
So the fact that the $ is the world reference currency is not the only cause of a subdued US inflation. US financial institutions have been very responsable not to throw their money to whoever was asking for (not to be too compassionate). Were it not for the relatively high unemployment, I'd call the US situation a goldilocks economy. That relatively high unemployment is caused by the increase of productivity (automatization) and by delocalization to low salary countries, not to name China. Overall, I'm very bullish therefore on US equities and EZ exporters. I saw this bloomberg interview with Larry Fink today. He seems to be of the same opinion. A few weeks ago I posted a comment in which I wrote the SP500 could easily go up another 20%. Today Fink mentioned that very same number , talking of a coincidence.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
A therapy for yourself might be useful.
Before you know the spectre of J.F. Dulles comes back and locks you up for communist sympathies.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
I finally got time to read that WSJ article that you gave me.
It's certainly interesting and it comes down to "the US certainly won't become the workshop of the world thanks to the shale gas boom".
Indeed they won't and I agree with the author that a certain amount of coporates who face to a lesser degree the impact of cheaper energy, won't feel a big difference when energy gets cheaper: taxes, labor costs, credit writedowns... might indeed have a larger share in the overall costs.
However, for the majority of manufacturing like petrochemicals, equipment makers, exploration, the difference will be huge.
Railways and trannies will be beneficiary. That's why I bought SAIA a few months ago.
Concerning wiping out all the billionaires, I find that rather rash. You needn't erase completely the Government's debt. A budget deficit of 2-3% would be just fine to keep things under control.
Bakken: The Bounty Of Super-Rich Gas - Everything Investors Need To Know [View article]
Gold To Rise On The Demand For Savings [View article]
The ECB wants to get rid of Cyprus. There's something fishy with that supposed Cypriotic natural gas find everyone has been talking about since a few years. I have no evidence, just suspicions.
As a Dutchman Dijsselbloem relies on expertise in the natural gas business. He might know more than the Cypriots are aware.
If Cyprus was that valuable as a future ng producing country, they would beg the Cypriots on their knees to stay in the Union. Now they almost sent them to Moscow.
But again, I have no evidence, just suspicions.
Cyprus's parliament is due to convene this afternoon to debate an astonishing eurozone demand that it tax all bank deposits at up to 10% in return for a €10B bailout. While approval is not guaranteed, Cypriots rushed to take as much money as allowed out of ATMs. And although EU Commissioner Olli Rehn ruled out a deposit raid in other eurozone countries, menacingly for savers, eurogroup chief Jeroen Dijsselbloem would not. "We are in a new world," says an economist. Update: The parliamentary debate has been postponed until tomorrow. [View news story]
What does my personal happiness got to do with Cyprus ?
This is money and business we talk, not hapiness.
Since I am in no position to influence European politics, I can only give my comments according to what I perceive.
And what I have been perceiving since 2001 (creation of the euro) is ugly. That opinion will not have caused the ugliness, it is the result of the ugliness.
My personal opinion has given me reason to take a defensive action regarding my capital. I can assure you: it's safe.
So please, spare me your morality: I have nothing to do with what Europe does, I even don't consider myself as part of this continent. I live in different countries and everywhere I go I'm perfectly happy.
Gold To Rise On The Demand For Savings [View article]
Apart from inflation, there's that Cyprus-affair too that has caused nervosity among gold shorters these days.
And then there are the recent corporate earnings that weren't as good as anticipated, which led analysts to conclude that inflation combined with economic growth won't after all be the mix we'll face over the next couple of months.
If you take away growth, stays over inflation. And according to the Ray Dalio asset-class matrix (which is a rather punctual investing tool), gold outplays all the other asset-classes in such a scenario of (even minor) inflation and no growth.
Even if the analysts might be wrong medium and LT, that perception is what it is ST.
What is your opinion on that ?
Bakken: The Bounty Of Super-Rich Gas - Everything Investors Need To Know [View article]
There's finally something moving in the US manufacturing.
I expect the trannies and rail to benefit as well.
Looking at who was behind the massive GLD redemptions early this year, Commerzbank concludes the selling might be about done. Estimating quick-moving hedge funds accounted for about 10% of GLD holdings, Commerzbank reckons they've pared down positions to the point where, if anything, they're buyers at this level. [View news story]
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Have you read this:
http://bit.ly/WMFunb
This is the beginning.
The rest will follow, be sure, and it will be gigantic.
Up till now austerity in my country meant higher taxes on the middle class, the most productive of society. That's asphyxiating the economy.
It's not that kind of taxes I had in mind though. I meant taxes on the very wealthy, those with +1 bn (or whatever number a statistician might come up with) who use their capital to make bets or speculations on very short time, a thing the economy doesn't profit from.
Actually, Hollande was not far from understanding that, except he forgot to realise France is such a tiny little country that everyone with a fortune fled to foreign countries as soon as he uttered his first word on high taxing. High taxing to mend current account deficits in a globalized world can only be implemented under mutual agreement of all the world states.
I know, that's utopic.
I therefore do not think high taxing has much chances to successfully be implemented and I certainly would not advocate it as a medicine to smaller countries.
But theoretically, it's the best solution to fight social polarization and enhance growth in an anaemic economic environment. So, in theory I agree with Macro on that topic and under these restrictions.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
if you say so....
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
OK on that US corporates' money stashed away.
In the meantime it's however a lot of potential not re-entered into the economy.
I'm not sure how the fact of babyboomers going on retirement can have a causal effect on unemployment. On the contrary, the more people get retired, the more jobs should come available for younger people. So I think you should look for other causes.
But whatever these causes, the figures are what they are and they still don't look nice.
I can't agree more with you on the subject of Europe's wrong green energy policies. It's a disaster. Even Germany has to cut on wages to maintain it's high productivity level because of expensive energy costs (due to their decision to end up nuclear energy plants).
"QE because it makes the dollar cheaper"
I'm not so sure of that bearing in mind the faint amounts of QE Bernanke applies.
"and for things you don't produce, a vacation to the US will be a dream."
I had a vacation in the US in mind though in the second half of this year (need to visit my friends in CA and NM). I know, life will be tough although, as the saying goes, the soup is never eaten as hot as it is served.
Right now, I'm more concerned about deflation in Europe.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
For the benefit of brevity, I concentrate on the points of disagreement between us two.
First, consumer confidence (cc) depends on a number of factors nobody can evaluate f.i. the weather. There has always been a discrepancy between the real figures and cc. I don't rely on cc therefore unless for trading reasons. But it does not influence my overall strategy. They started publishing cc because they didn't have anything more substantial to talk about.
"companies can not grow further no matter how much free money is out there"
The point of returning to the markets for me was that shale gas business developing. We should not forget a few years ago we faced oil prices of over $140/barrel. We're at $93 now, quite a difference and I expect the price to slowly grind down further.
We're (you're) only at the very beginning of the consequences of that, and it is hard to imagine the relevancy now, but I can guarantee you it is huge. Energy prices are very slowly coming down, because the oil (and ng) glut isn't fully used yet because of a lack of refining and storage and transportation capacity (environmental issues also are responsable, probably justifiably).
A 5% decrease though of energy prices would cause an exponential increase of productivity and investing opportunities. A further decrease of social polarization (I agree with Macro on that topic) is however needed to implement these investing opportunities. That's why I'm favorable to higher taxes, especially on the very wealthy.
In general I prefer the spring to the summer season. When everything is still pristine and greenshoots are still hard to detect, is for me the best economic condition.
Walmart is the victim of US social polarization (less consumption), but I understand the Democrats are working on that.
Fedex is the victim of the strong $ (repatriation costs of FX) and European sluggishness.
Caterpillar is a wonderful C° (my uncle has spent his whole life working for it) but the victim of fierce Japanese (and soon Chinese ?) competition and of course the European economic downturn.
But what about:
http://seekingalpha.co...
and there are others as well, in IT, electronics, health services...
I do not know when time will have come to stop QE. Waiting for inflation to pick up might be the wrong strategy because it would mean you're too late (the Titanic-syndrom). I think economic growth is a better indication, but Bernanke is sure smart enough to acknowledge that.
Economic growth is indeed still anaemic, but, again, I prefer spring to summer season.
I'm aware Larry Fink is a market-vendor, but that doesn't exclude he can be right.
The only thing I'm lightly afraid of, is the black swan: Iran, North Korea, currency wars (Japanese QE could have a much more devastating effect to other countries' exports than US QE has on other countries' exports)...
Why These 4 Stocks Are Rising Fast [View article]
I love SAIA.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
"In Europe the media tells them that the US is still in bad shape."
I have evidence of the contrary.
The bailout rejected, what's next for Cyprus? Open Europe suggests the EU will allow a few days for Cypriot MPs to get their minds right before the ECB thinks about cutting off funding for the country's banks (which would lead to their collapse). Or not. Reuters' Anatole Kaletsky notes the ECB needs two-thirds of its board to cut off ELA funding, and the Germans don't have the votes. "Time to get bullish ... German U-turn ahead!" [View news story]
Don't think I question the sense of QE Bernanke applies. It is given the circumstances the best solution. I have explained this several times to Macro too.
Doing nothing (as they did beginning of the 30ties) would have had terrible consequences and simply was no alternative. Bernanke deserves a knighthood therefore, because resistance to that policy was in the beginning very fierce, in the US too. It's only when people started to understand the benefits and the positive mechanisms that they changed their ideas.
QE does come to printing money. Let there be no misunderstanding about that. Question is though, is it needed or not. It certainly is to compensate for the uncountable effects of deleveraging. The best way of combatting deleveraging is creating new money... until the economy gets track again. US corporates haven't completely understood that yet: today I saw a Reuters report on cash that is being stashed in tax havens by US corporates: over $1T (Apple, Pfizer, Amazon, Microsoft, Google...), double of 2 years ago.
Meaning, these corporates still don't have incentives to invest rather than to hoard.
OK, having said that, if any other country would adopt the same financial policies of monetary easing, they would face a huge raise in inflation. Britain for instance creates a poor £45 bn of QE (buying Gilts) on average a year and the inflation in the UK is already at +4% yoy.
The US monetize by buying $40 bn of Bonds (Treasuries) a month and another $40 bn mortgage related assets (house loans). That is newly created electronic money that is directly injected in the economy, not to be confounded with the trillions they created to save the banks in 2008-2009.
The latter indeed never came into the economy because the banks hoarded the money because they saw no investing opportunities or used it to clean up their balance sheets. Hence the subdued growth rate of inflation.
So the fact that the $ is the world reference currency is not the only cause of a subdued US inflation. US financial institutions have been very responsable not to throw their money to whoever was asking for (not to be too compassionate).
Were it not for the relatively high unemployment, I'd call the US situation a goldilocks economy. That relatively high unemployment is caused by the increase of productivity (automatization) and by delocalization to low salary countries, not to name China.
Overall, I'm very bullish therefore on US equities and EZ exporters. I saw this bloomberg interview with Larry Fink today. He seems to be of the same opinion. A few weeks ago I posted a comment in which I wrote the SP500 could easily go up another 20%. Today Fink mentioned that very same number , talking of a coincidence.