Week End

According to a survey by Bloomberg the world economy is in its worse shape in two years, and even more concerning: deflation is lurking. Central banks in US, Euro Zone and Japan have been pumping money into the financial ecosystem for the last 5 years, buying trillions worth of assets from financial institutions, but still, the risk of deflation is higher than ever.

That's a few hundreds of Bloomberg readers responding to a series of question concerning their opinion as professionals and actors in the economic world. Meanwhile on the financial markets things are doing pretty good. Indexes are up, SPX is at a new historical record, and bonds are down.

Anyone, not necessarily only economists and finance-savvy people, can have their opinion on this. Most people think that something is wrong. It shouldn't be that way. Things have to go back to "normal", and the return to reality will be violent.

Maybe. But if you want to trade, just accept the simple facts that:

• indexes are going up
• dollar is going up
• yen is going down
• precious metals are going down

Just look at the charts and leave aside your "I wish that" and "central bankers are manipulating the market, SPX should be plunging". There is no top until a lower low and a lower high are made.

The situation can be frustrating and piss you off, but you have to admit that it's interesting. Most things that we learned about macro-economy, economic theory, finance etc turn out to be wrong. Back in 2008, after Lehman Brothers collapsed, many economic magazines were warning of the next back swan event. Well, I think that the black swan is here: adding money supply creates deflation, bad economic news push equity indexes up, massive physical gold purchases by China and India mean gold price cut by almost 50%, the US lets Japan/China/Euro Zone and everyone else weaken their currencies while the USD surges...