“The End of Fake”


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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

by macromon, Global Macro Monitor,

We have no idea how the S&P downgrade of the U.S. is going to play out but one thing that does come to mind is the “end of fake.”  The end of fake demand generated by monetary and fiscal stimulus to replace the fake demand generated by fake wealth generated by negative real interest rates and policy induced asset inflation; and the end of fake confidence of the policymakers who believed they had a blank check for endless stimulus and bailouts.  This is true not just in the U.S. but across all countries.

At the end of the day this should be extremely deflationary and we hope the politicos and policymakers will learn that wealth and ultimately demand can only be created and sustained by increasing productivity.   But, you never know how they will respond and if the big sovereigns, including the U.S.,  start having problems rolling over their debt and are forced to rely on their central banks,  the end game is an entirely different story.   No wonder the gold price is over $1,700.

There are so many moving parts in this crisis.  Will the world’s leaders continue to dither? What about France’s sovereign rating? How much leverage is in the system?  Who and how many will blow up?  How much financial wealth will be destroyed before the markets hit bottom?  What is the fate of the dollar’s reserve currency status?  Will the next quantitative easing in the U.S. include the outright purchase of equities?   Buckle up.

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