The Phaserl


Opinion On Capital Flows

by 24 carat, In Gold We Trust:

The flows of economic and financial capital determine who is poor or rich (prosperous) at any given moment. Capital, travels around the world in search for profits and always comes back home. Let us focus on one particular aspect of capital in the financial globalization. There is too much capital for too little physical economy. This disproportion rises systemically just like the growing mismatches of global debt (and stock markets capitalization) versus GDP. These masses (XX trillions) of debt capital (hot money) are systemically backed by less economy and more finance. High net worth Individuals have to manage a fast rising volume of already +/- $ 50 trillion.

Today, there is a massive flight to liquidity, driven by the fears of capital safety. For the time being, the dollar capital flows are not yet showing any signs of loss of confidence, when leaving fertile grounds and coming back home. The $ bonds are not yet declining! Forward guidance is still in control of dangerous volatility and debasement risks (expectations). The world’s gigantic capitals can still move (refuge) into ever expanding $ debt paper. $-bonds can keep up the appearances of quality.

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