Felix Zulauf Interview on Financial Sense Newshour

As I mentioned just a few days ago, Felix Zulauf is among the macro strategists that I didn't know and who surprised me by his sharpness and the quality of his analysis.

Interestingly, Felix Zulauf was Jim Puplava's guest on the August the 11th on Financial Sense Newshour.

Felix discusses the credit mess in Europe, and the insolvency of several of the European unions. Selected points:

  • He have now a slow motion bank-run in Italy.
  • Angela Merkel has a communist background and doesn't understand the market. She has no ideology anymore and the only purpose that she has, is being reelected.
  • QE does work on financial assets but cannot work on the economy.
  • I think we are at the beginning of the recognition that the forecast of growth acceleration was wrong and that instead of a strong growth, we are probably going to have a recession.
  • France will become a problem. The numbers coming out of France are wrong.
  • Markets will continue to drop until governments (and central banks) start to act again. But government will not be able to come with the structural changes that are needed but will only come with short term patches.
  • The prosperity that we have experienced since the late 1970's was built on accumulating unseen amounts of debt. It was a fiction.
  • Only after a number of years of deflation, will we go into hyperinflation. It will be very messy, very painful.

Unfortunately, he also exposes some of his dark sides by suggesting that governments must provide fiscal stimulus and economic stimulus by doing infrastructure work. Sadly, Keynesian BS is very widespread.

Link to the full MP3 file.

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