11 October 2011 at 9:07 GMT
The fourth quarter can be described as the final all-out effort by policymakers and central banks to keep creaking debt markets and financial systems turning over. The Federal Open Market Committee Market has launched Operation Twist in an effort to jump start the failing U.S. economy. Now the European Union is on the brink of a new and massive effort to dig itself out from under its untenable sovereign debt situation in the fourth quarter despite recent dithering and in-fighting. Meanwhile, the Swiss National Bank has launched an all-out war on the strengthening Swiss franc. And Japan might be close on its heels.
It’s maximum intervention time. While the future path from here remains uncertain, the most likely and healthiest eventual destination for the world economy and policymaker in the wake of maximum intervention will be crisis 2.0 – a real confrontation with our debt demons and bad practices to eventually replace the extend and pretend routine we’ve seen since the global financial crisis got under way in 2008. Fasten your seatbelts, ladies and gentleman, because we are in for a rough ride – one that will very hopefully see us in a better place when we finally land.
See the entire Saxo Bank Quarterly Outlook - Q4 2011
here.
