The global financial crisis in 2008 was a game changer on many levels. One of which was, and continues to be, the gross reality that developed economies can no longer borrow their way to prosperity. According to many central banks, the answer to this problem is to export unemployment to other countries through competitive currency devaluation. http://www.seasoninvestments.com/insights/exporting-unemployment/
It has long been debated to what extent the ECB will be willing (or even legally capable) of engaging in outright bond purchases of Eurozone countries’ sovereign debt. Such programs have already been implemented throughout this crisis, but such efforts have been limited and have fallen short of anything akin to the US Fed’s quantitative easing programs. http://www.seasoninvestments.com/insights/will-the-ecb-go-for-gold/
A disorderly unraveling of the crisis in Europe is still the greatest “known” threat to investors of all types. While a number of potential outcomes are possible, we do not believe a worst-cases scenario is the most likely. In our view, all European participants are in a slow creep towards the “Lose-Lose Win” scenario. http://www.seasoninvestments.com/insights/macro-update-europe-debt-crisis/
