Press : inflation could create a “financial tsunami”

Sorry, it’s not specifically related to Thailand… But I found this opinion interesting (to say the truth, I totally share it).

And eventually, we could have the same phenomenon (although much smaller of course) in Thailand. A strong inflation is hurting the thai consumers, and particularily the poorests (with debts).

Rising consumer prices will leave more U.S. consumers unable to pay their debts and may lead to a “financial tsunami,” according to Bennet Sedacca, president of money manager Atlantic Advisors LLC in Winter Park, Florida.

Whether it is anecdotal or statistical evidence, I see inflation everywhere, and this is where the financial tsunami cometh,” Sedacca wrote in a report published yesterday.

“A battered, over-indebted consumer, if forced to retrench, could create even more problems for the banking system as loan delinquencies would begin to rise even further. All sorts of delinquencies are rising. This is now a systemic issue.”

Sedacca wrote that current financial-market conditions remind him of “someone standing on a lonely beach, armed with only a small bucket, trying to stop a rare tsunami that hits the shores.

It is how I feel about our markets and the tools being utilized by the Federal Reserve, the European Central Bank and other regulatory bodies.

They are overmatched for what they are facing and, worse yet, they helped create the mess in the first place by being far too easy with money and debt creation.” (Bloomberg)

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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