Grant Williams is a strategy adviser for the hedge fund, Vulpes Investment Management in Singapore, as well as the blogger behind the popular Things That Make You Go Hmmm…. In the following video, Williams reviews the disconnects between the economic realities that exist in today’s world and the rosy pictures painted by governments, central banks and the main stream media.
- Williams’ problem #1: The disconnect between fundamentals and equity prices.
- Williams’ problem #2: The paradox behind China’s mysterious GDP growth during a time of reduced manufacturing, shrinking demand for raw materials and declining imports/exports
- Williams’ problem #3: How is France able to sell its sovereign bonds at such low interest rates when all indications of its own economy are performing like those of the European periphery?
- Williams’ final problem: The difference between the “Gold Price” and “The Price of Gold”
In the end, the laws of mathematics cannot be subverted by governments or central banks. Central banks’ zero percent interest rate policies are damaging:
- In the short term through the confiscation of savings and the forcing into riskier investments in the search for yield
- In the long term by suppressing market volatility, which must be reconciled at some point
Mathematics, rightly viewed, possesses not only truth, but supreme beauty – a beauty cold and austere.
– Bertrand Russell
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