‘This is starting to get to dangerous levels’ – Mohamed El-Erian

themarketnNZZZ/Christopher Gisiger

photo of gold king standing tall amidst fallen foes on a chess board

“We have stumbled into very unhealthy codependences; codependences between central banks and investors, between central banks and debt issuers which are governments and companies, and between central banks and politicians. They are all in this unhealthy codependency. It’s like a bad marriage: They’ve ended up relying on each other, and they just don’t know how to get out of it. Every time the central banks have tried to get out of it, the markets were at risk of becoming disorderly.” – Mohamed El-Erian

USAGOLD note:  El-Erian comments complement the post made this morning (‘The bubble inflates or bursts’). Overblown markets in both stocks and bonds present potential problems that no one can quantify at this time except in trenchant warnings like this one from the former PIMCO economist who is now president of Queens College, Cambridge, and chief economist advisor at Allianz.  El-Erian gave a thumbs up to gold last year.  One doubts the downside of the past few days has changed his thinking.

Repost from 1-12-2021

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