Same old solution is a setup for 5,000 on the Dow. Crazy, I know!

Posted by Jack Crooks: Black Swan Capital

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“Shut up! Shut up! I am busy. I am working Cape Race!”

– John Phillips (chief radio officer aboard the Titanic), in reply to Cyril Evans Ice warning.

Commentary & Analysis

There is nothing new flowing from world leaders in an effort to fend off yet another bout of “risk off” and a nasty contagion except the same old policy; this time with the ECB taking a broader role:

Get the Fed and ECB to buy huge amounts of bonds is the déjà vu all over again solution to our woes. It’s been a movie played twice in the US so far and is ending badly.

Effectively more bond buying does little to solve the long-term structural problem facing the globe. Which, more than incidentally, is the same problem that led to the credit crunch in the first place-there is too much debt in the system. Period! End of story!

So, might we see QE3 from the Fed and the ECB now that Europe’s latest “summit to end all summits” has proven a failure? Yup! If the latest budget huddle in Washington is any indication, it proves politicians do not have the will to make real changes; so why not fall back on central banks.

….read more HERE