Some Thoughts about Quantitative Easing The crisis of 2008 was precipitated by the realization that debt levels in the economy had become acutely excessive. In a short space of time, investors lost faith in banks and one another, suspecting that their respective counterparties had excessive exposure to the debt that had been created.

In the current volatility, and don’t expect this to be a linear race to the bottom, there will be significant countertrend rallies, its easy to lose sight of the big picture. – the boom experienced from 2002-2007 was fed by low interest rates, rising housing markets, and unprecedented credit creation on the back of rising

  Following the sharp declines in equity markets globally I thought I would reflect on how one should react. The fact is, you should have sold on July 15 and gone on holiday.

  You may recall my view in 1Q that the US economy was already in recession at the time.

A country never has to default in debt it issues in its own currency. The exception to this is the Euro zone where the ability to print Euros lies with the ECB and not the national banks. Tough.