FWIW, here is my current view on things:
In our world today, it is indisputably clear for all to see, that a globe made up of individual sovereign states governed by nationally elected statesmen has almost completely ceded way to a new paradigm. The international banking & corporate titans are now the real powers directing world affairs. To understand what comes next in our economic outlook, and how the market may react to it, it is essential to think about what these new centers of power are interested in.
The first order of business for our new masters, is to take full advantage of the sovereign debt crisis now imploding in Europe. Rahm Emanuel's mantra comes to mind "never let a major crisis go to waste". One could even go so far, as to make the case, that the current debt crisis now engulfing Europe was actually initiated by the financial oligarchs themselves, so as to further consolidate their grip on the independent nation states. After all, it was the financial & commercial elites of the world, that most fiercely advocated for, and imposed the EU & EURO on to the Sovereigns.
Saving Italy & Spain from financial collapse, and protecting all of Europe from descending into a great debt depression will no doubt be sighted as the reasons for their bold actions. But the real and much more sinister motivation, is to use this crisis, to further consolidate the powers of the EU & the international banking cabal over the Sovereigns, by creating a Pan European bond market. The final result, will be the near total evisceration of the national right of a country to direct its own monetary & fiscal affairs. All of this delivered without even one vote ever being cast by a Nation's own people.
So here is my take on how this raging European debt crisis will unfold. A new stealth QE3 will be devised by the upper most echelons of the international banking cabal. The heads of the TBTFs both here and abroad, world renowned financial industry wizards, and esteemed economic academia, will assert their influence on the FED / Treasury to roll out the following. Let's call it Evil Plan 3.0………..
The FED will implement its established currency swap lines to wire massive amounts of new digital USD currency to the ECB. The ECB will then use these new funds, much like the FED did with TARP & QE2, so as to shore up the European banking system, instill confidence in national bond markets, and support all financial asset classes. These actions will also serve to prop up the EURO, and keep downward pressure on the USD. Both of which are desired outcomes by international banking & multi-national corporate interests.
So how will this effect the U.S. equity markets you ask? My best guess is, that this newly unleashed liquidity Juggernaut will once again find its way into all financial risk assets. So after this policy is announced over the weekend, and is implemented next week, I am expecting a sharp relief rally which normally would be quickly sold off, but much to all our surprise, will sustain itself, and possibly carry the market back up near 1300……….PMs should continue to shine brightly (Happy B-Day Dutch!).