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FX Concepts' John Taylor Is The New Dr. Doom: "2011 Will Be Worse Than 2008"  Zero Hedge

As the market players, whether in corporate or individual form, are among the blessed, they can and are rebuilding their leverage and playing the game. It's like 2008 never happened, just a one in a thousand perfect wave, and the market participants have forgotten, just like they did in 1998 and 2003. As there is incredible liquidity available, those who can get their hands on it will use it. The authorities who saved the economy from destruction in 2008 are either busy patting themselves on the back or fighting for their own national interest. The Eurozone countries are blaming the `Anglo-Saxon' hedge funds and free market philosophy, while, in many cases, the US authorities are in the forefront of the `perfect storm' crowd - just a nip or a tuck here or there and everything will be fine. China has its own view of things and the other Asians are acting as though they were on a different planet - "what happens in Europe and North America stays there and has no impact on us." This serious reluctance to replace parochial issues with a genuine desire to restructure world finance assures us that the next crisis will be far worse than the one in 2008. Although it seemed that the world was terrified by that collapse, it is now clear that the authorities and the players were not so bothered that they changed their stripes. The cycles and very simple fundamentals are enough to predict that 2011 will be worse than 2008. The medium-term cycles tell us that there is a very high probability of a serious bout of risk aversion beginning in the next five trading days and continuing into the week of May 3. This is likely to be most apparent in Europe, but it should also impact the equity and commodity markets around the world. The stream of strong economic and corporate news, plus continued benign inflation outside of Asia should assure us of a further risk rally, starting in May and running through July and possibly into early August. This decline after the August peak should be far more serious and we believe it will be the start of a major market rout continuing into the middle of 2011, at a minimum. The deflationary recession that will accompany this market collapse, at least in the developed world, will put extreme pressure on the Eurozone and the EMU structure. The second half of this decade will witness a very different world.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Apr 19th, 2010 at 01:08:29 AM EST
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