Today, the first real trading day of the year, markets saw nearly a 2% decline in the U.S., and that happened firstly in Europe, and Asia. Real issue is a global transition from investment and creation of production, to who is going to consume.
I saw Rick Santelli on CNBC talk about no real rise in 10 year yields. He said it, and his time horizon is very reasonable, he provides a very good perspective. Follow him on http://www.cnbc.com/id/15837966 .
A point to review is capacity of consumption. QE has certainly provided the investment to build capacity. Now that the U.S. has been through a strong cycle of money that grew production capacity, can the American consumer buy it up? Chinese consumer is nascent at best, Japanese consumption is notorious. Europe can be a likely card. Greece leaving the euro at this point wouldn't really matter, save for further deterioration of the countries constituted to honor the currency.
Fact is, the investment cycle associated with QE is confronting that next day. Next day is who buys that invested production? That is a question of global implication, only because it's the U.S. Dollar.... That next day view of hoped growth wanted a rise of demand. All of us wanted to see, and expected, global growth of demand, but it didn't happen. There is an inclination to deflation.
That is why oil and markets went down today. What I see, and look forward to, is the second stage of growth across the globe. That is, transporting production and the technology to do it. But, this time, more efficient and effective.
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