As expected, global central bank alchemy is getting out-of-control after 500+ global rate cuts and upwards of $16 trillion in monetary stimulus now in the hands of hot money speculators (plus or minus a few trillion).
The recent melt-down in the Indian Rupee is Exhibit A for what happens when a country is no longer able to control the forces of speculative hot money that arrive and depart on a moment's notice. No different than what happened to the Thai Bhat back in 1997 that initiated the Asian currency crisis. No one thought that a relatively small country could monkey-hammer the global financial system. However, as we learned from Greece and Cyrpus, the globalized ponzi economy is not what one would describe as being "fault tolerant". As you note in the linked article, Indian policy-makers are taking steps to make the situation worse by passing a food subsidy bill. They are also contemplating a gold buy-back, which some see as tantamount to gold confiscation, since the gold would be bought of course in highly devalued rupees. In other words, not exactly adding confidence to the situation.
Suffice to say, at this juncture, the Dow and all other global asset markets are extremely overbought and primed for a meltdown. Just waiting for the proximate catalyst...
Indian Rupee ETF:
