Many investors will spend a lot of time thinking about what could go wrong in terms of economic growth, interest rates, inflation, taxes, and other big-picture risk factors. But I wonder how many are allowing for the kind of disruption -- which I believe grows likelier by the day -- alluded to in the following CNBC report, "People Have 'Huge Disbelief' in Government: CIO"?
A big risk for markets is the fact that faith in the US government's ability to fight the economic markets, as well as in central banks' monetary policy tools, is eroding, Steen Jakobsen, Chief Investment Officer at Litmus Capital Partners told CNBC Friday.
More quantitative easing will follow, in the US as well as in Europe and Japan, but the Federal Reserve and its chairman Ben Bernanke will prefer to wait until after the November mid-term elections, Jakobsen added.
"The fact of the matter is that people have a huge disbelief in government," he said.
"The real crisis 2.0 is not about the new normal or whatever term is being used, the new crisis is a crisis of faith in the US system. We're far away from that point now but that is a clear risk," Jakobsen said.
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