Juggling Dynamite

India central bank Governor Raghuram Rajan talks about interest rates, fund outflows, the rupee and global monetary policy coordination and the damage QE-driven speculative money flows have had both flooding into emerging markets and as they now rush out. Here is a direct video link.

I can’t help but recall some comments made by a certain aged mut-fund patriarch I was on a panel with last fall here, challenging my comments on the risks of hot money flows in global markets. He insisted that there was no such thing and embarrassingly read a McKinsey report as the authority (hired research) asserting emerging market growth would continue to drive rabid demand for commodities. HHMMMMM….

The China story lent great hope and exuberance to global markets 2002 to 2008. Many talking heads tried to revive it after the great recession on talk of how the Chinese government and central bank would not tolerate a slow down. If only it were that simple. Toxic levels of debt have been added over the past 5 years trying to force growth. Now that debt is having a predictable weight on the Chinese economy and global growth. See this excellent summary graphic for a big picture view. Debt giveth and then debt taketh away.

For Canada’s TSX: how low can it go? My partner, Cory Venable’s latest update offers some targets to watch.

Danielle speaks with former Fed Reserve official and QE bond buyer Andrew Huszar’s on why QE has not worked and what is likely next. You can see Andrew’s original op-ed piece in the Wall Street Journal here: Confessions of a Quantitative Easer. Also see www.cliffkule.com

Here is a direct video link.