Hugh Hendry’s QE Cycle

  1. FED QE
  2. Rejects Globalization
  3. Rejects China Gaming FX
  4. Fed Seeks to Create Domestic Price Inflation Overseas
  5. Fed Seeks to Revalue China et al FX Real v Nominal Prices
  6. But China Imposes Tighter Credit Controls to Offset Fed Stimulus
  7. And Euro Debtor Countries Raise Rates Despite High Unemployment a la 1931
  8. And so EM Growth Slows
  9. And with a six month lag US / Germany Slows
  10. But Zero Lower Bound Restricts Monetary Policy
  11. And High Sovereign Debt Restricts Additional Fiscal Stimulus
  12. FED does another QE
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