Global View March 2016: The World’s Biggest Credit Bubble Meets the World’s Biggest Policy Error

The bear market in global risk assets is gathering pace. It follows in the wake of last year’s lurch downwards in Global Liquidity. Looking ahead, the two key issues are: (1) the collapse in China’s asset bubble, hastened by the PBoC’s tight policy response to the huge capital outflows, and (2) the latest Central Bank error of negative interest rates plus reverse repos. We reiterate our conviction that gold and US Treasuries will be 2016’s best asset choices.