The following are quotes from an article that just came out about a report by the Royal Bank of Scotland’s economic research team:
“The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyzes the major central banks.”
“‘A very nasty period is soon to be upon us – be prepared,’ said Bob Janjuah, the Bank’s credit strategist.”
“A report by the bank’s research team warns that the S&P 500 Index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as ‘all the chickens come home to roost’ from the excesses of the global boom, with contagion spreading across Europe and emerging markets.”
“The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. ‘The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation.’”
What’s next? The consensus seems to be that we’re going to see 1970’s-style STAGFLATION. With that stagflation, we will see higher commodity prices (the average bull market in commodities over the past 140 years lasted 18 years), higher gold prices and higher rare coin prices.
In concert with Royal Bank of Scotland, Morgan Stanley is warning of a financial “catastrophe.”
Donald W. Doyle, Jr.,
Chairman and CEO
David Beahm,
Vice Pres. and Director of Marketing and Economic Research
