Thursday, December 8, 2011

1931 - 1932

I covered this in my last , but I feel like putting it out again. When global markets capitulate at the news of China slowing down, may be by then the eurozone will have metamorphosed, there is going to be a massive flight to cash. Is it possible that the pessimism that controlled markets in 1931 and 1932 after the great crash of 1929/30 is going to resurface? I can just see the cash rich enterprises calling back all its loans in fear.

The odd thing is that equity markets can't be called 'expensive'. The other odd thing is that this is the first time that various countries have borrowed money and the entire market is going to ask whether this debt is going to reduce. The funny thing about borrowings by countries is that there is no legal remedy as such, it's only a matter of saving face. To say the truth, not that it is required, I am very confused right now at this lull before the storm.
Oh, and the upcoming news from China is already here.

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