One who intends to leave others better off for his having existed.

11/22/13

"Forced to leave his bearish outlook behind"

"Eclectica hedge fund manager Hugh Hendry ...said he is no longer fighting the "two-way feedback loop" which is continuing to boost risk assets.

That centres on the currency war being played out between the US and China, in which US QE prompts dollar-denominated investment to head to China, and China fights the resulting upwards pressure on its currency by manufacturing an investment boom.

Hendry said this creates a "global supply glut", leading to falling US inflation expectations (as this supply far outweights US domestic demand) - which in turn prompts the Federal Reserve to loosen policy once again.

"...When markets become parabolic, the people who exist within them are trend followers, because the guys who are qualitative have got taken out," Hendry said.

"I have been prepared to underperform for the fun of being proved right when markets crash. But that could be in three-and-a-half-years' time."

..."There is the constant danger that Western bankers turn bullish again, start leveraging up, and we see money go into productive assets, not financial assets," he said.

"If that happens and the Fed does tighten policy [as a result], it will just be really bad news for emerging markets."

http://www.investmentweek.co.uk/investment-week/news/2308814/i-cant-look-at-myself-in-the-mirror-hendry-on-why-hes-turned-bullish
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QE has created a perversity of investment in financial assets as opposed to manufacturing and other "actual" sectors of the economy.

What we have now is an economic stimulus policy enriching the top at the expense of everyone else, by utilizing low cost labor elsewhere, thus leaving the only place to "invest" Fed funny money injections into non-economically growth producing assets.

Same thing as prior empires in decline as history is rhyming, only this time its global and simultaneous with billions more people stuck looking at the headlights.

Holding "things" that don't appreciate when the value of physical stuff continues to rise in price from central bank balance sheet expansion may end up being not such a good thing.

The elders who fled low rates to packaged products without guarantee and return of principle may take it on the chin again, if interest rates rise from other money fleeing non profitable assets in the near term.

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