Tuesday, June 12, 2012

Felix Zulauf predicts dark times for the Euro and nationalization of the credit system

The Swiss investment manager Felix Zulauf once again shared his extremely dark forecast for the future of the world as the owner and president of Zulauf Asset Management recently participated in Barron's Roundtable. Mr. Zulauf commented that the euro is a misconstruction. He reminded his January expectations, when he waited for the disintegration of this currency to begin in the second half of this year.

If that happens, it should lead the world into financial and economic chaos. The Swiss investment manager's two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real-estate boom.

Felix Zulauf considers the credit markets to be an explosive cocktail. The tower of debt is compounded by the gigantic over-the-counter derivatives market. In the past 10 years the notional value of derivatives worldwide has grown from $100 trillion to almost $800 trillion. In his opinion there is a chance that the governments could intervene and the potential exists for a broad-based nationalization of the credit system, capital controls and dramatic restrictions on financial markets. He even goes further with the assumption that some markets might even be closed for awhile.

Mr. Zulauf believe that we are living in interesting times and currently we are witnessing the biggest financial-market manipulation of all time. The authorities have intervened more and more, and thereby created this monster. They might change the rules when the game goes against their own interests.

As his opinion goes, Felix Zulauf likes cash, recommends shorting emerging markets (EEM), and would buy gold but only if it falls to $1,500.
Felix W. Zulauf is the owner and president of Zulauf Asset Management - Switzerland-based hedge fund that offers global advisory services. Zulauf is an independent investment manager seeking absolute return.

No comments:

Post a Comment