HUGE Bubble going on in Fine Art now as the Chinese launder hot money in this market.

Might be a good time for you to cash in on your Stamp Collection.

With luck, you can liquidate the stamps to a Chinese Investor and then buy a Ton of Silver on the Cheap here.

RE

Nice Big Numbers.

You think they will hold up?

RE

Thanks for the hits gang! Pulling in 10 listens/hour!

[img[/img]

RE

From George Washington via Zero Hedge

http://www.zerohedge.com/news/2014-11-18/why-qe-may-lead-deflation-long-run

Why QE May Lead to DEFLATION In the Long Run
George Washington’s picture
Submitted by George Washington on 11/18/2014 14:55 -0500

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Preface: Financial experts have been debating since the start of the 2008 financial crisis whether inflation or deflation is the bigger risk. That debate is beyond the scope of this essay. However, it might not be either/or. We might instead have “MixedFlation” … inflation is some asset classes and deflation in others.

Quantitative easing (QE) was supposed to stimulate the economy and pull us out of deflation.

But the third round of quantitative easing (“QE3″) in the U.S. failed to raise inflation expectations.

And QE hasn’t worked in Japan, either. The Wall Street Journal noted in 2010:

Nearly a decade after Japan’s central bank first experimented with the policy, the country remains mired in deflation, a general decline in wages and prices that has crippled its economy.

***

The BOJ began doing quantitative easing in 2001. It had become clear that pushing interest rates down near zero for an extended period had failed to get the economy moving. After five years of gradually expanding its bond purchases, the bank dropped the effort in 2006.

At first, it appeared the program had succeeded in stabilizing the economy and halting the slide in prices. But deflation returned with a vengeance over the past two years, putting the Bank of Japan back on the spot.

So why didn’t quantitative easing work in Japan? Critics say the Japanese central bank wasn’t aggressive enough in launching and expanding its bond-buying program—then dropped it too soon.

***

Others say Japan simply waited too long to resort to the policy.

But japan has since gone “all in” on staggering levels of quantitative easing … and yet is still mired in deflation.

The UK engaged in substantial QE. But inflation rates are falling there as well.

And China engaged in massive amounts of QE. But it’s also falling into deflation.

Indeed, despite massive QE by the U.S., Japan and China, there is now a worldwide risk of deflation.

So why hasn’t it worked?

The Telegraph noted in June:

The question is why the world economy cannot seem to shake off this “lowflation” malaise, even after QE on unprecedented scale by the US, Britain, Japan and in its own way Switzerland.

***

Narayana Kocherlakota, the Minneapolis Fed chief, suggested as far back as 2011 that zero rates and QE may perversely be the cause of deflation, not the cure that everybody thought. This caused consternation, and he quickly retreated.

Stephen Williamson, from the St Louis Fed, picked up the refrain last November in a paper entitled “Liquidity Premia and the Monetary Policy Trap”, arguing that that the Fed’s actions are pulling down the “liquidity premium” on government bonds (by buying so many). This in turn is pulling down inflation. The more the policy fails – he argues – the more the Fed doubles down, thinking it must do more. That too caused a storm.

The theme refuses to go away. India’s central bank chief, Raghuram Rajan, says QE is a beggar-thy-neighbour devaluation policy in thin disguise. The West’s QE caused a flood of hot capital into emerging markets hunting for yield, stoking destructive booms that these countries could not easily control. The result was an interest rate regime that was too lax for the world as a whole, leaving even more economies in a mess than before as they too have to cope with post-bubble hangovers.

The West ignored pleas for restraint at the time, then left these countries to fend for themselves. The lesson they have drawn is to tighten policy, hoard demand, hold down their currencies and keep building up foreign reserves as a safety buffer. The net effect is to perpetuate the “global savings glut” that has starved the world of demand, and that some say is the underlying of the cause of the long slump. “I fear that in a world with weak aggregate demand, we may be engaged in a futile competition for a greater share of it,” he said.

The Bank for International Settlements [the “central banks’ central bank”] says the world is suffering from addiction to stimulus. “The result is expansionary in the short run but contractionary over the longer term. As policy-makers respond asymmetrically over successive financial cycles, hardly tightening or even easing during booms and easing aggressively and persistently during busts, they run out of ammunition and entrench instability. Low rates, paradoxically, validate themselves,” it said.

Claudio Borio, the BIS’s chief economist, says this refusal to let the business cycle run its course and to purge bad debts is corrosive. The habit of turning on the liquidity spigot at the first hint of trouble leads to “time inconsistency”. It steals growth and prosperity from the future, and pulls the interest rate structure far below its (Wicksellian) natural rate. “The risk is that the global economy may be in a deceptively stable disequilibrium,” he said.

Mr Borio worries what will happen when the next downturn hits. “So far, institutional set-ups have proved remarkably resilient to the huge shock of the Great Financial Crisis and its tumultuous aftermath. But could (they) withstand yet another shock?” he said.

“There are troubling signs that globalisation may be in retreat. There is a risk of yet another epoch-defining and disruptive seismic shift in the underlying economic regimes. This would usher in an era of financial and trade protectionism. It has happened before, and it could happen again,” he said.

The Economist reported last year:

Is QE deflationary? Yes, quite obviously so. Consider:

A central bank that is deploying QE is almost certainly at the zero lower bound.
QE will only help get an economy off the zero lower bound if paired with a commitment to higher future inflation.
If a central bank is deploying QE over a long period of time, that means it has not paired QE with a commitment to higher future inflation.
Prolonged QE is effectively a signal that the central bank is unwilling commit to higher inflation.
QE therefore reinforces expectations that economic activity will run below potential and demand shocks will not be completely offset.
QE will be associated with a general disinflationary trend.

Don’t believe me? Here is a chart of 5-year breakevens since September of 2012, when the Fed began QE3, the first asset-purchase plan with no set end date:

(The article then goes onto say that QE can be deflationary or inflationary depending on what else the central bank is doing.)

Michala Marcussen – global head of economics at Société Générale – believes that QE may be deflationary in the long run because:

Excess capacity is deflationary and the means to deal with it is to shut it down. Indeed, we expect China [which also engaged in massive QE] for now to exert deflationary pressure on the global economy.

***

Unproductive investment is by nature ultimately deflationary. This is a point also worth recalling when investing in paper assets fuelled by QE liquidity and not underpinned by sustainable economic growth.

Prominent economist John Cochrane thinks he knows why. As he explained last year:

Here I graphed an interest rate rise from 0 to 5% (blue dash) and the possible equilibrium values for inflation (red). (I used ?=1 ?=1 ).

As you can see, it’s perfectly possible, despite the price-stickiness of the new-Keynesian Phillips curve, to see the super-neutral result, inflation rises instantly.

***

Obviously this is not the last word. But, it’s interesting how easy it is to get positive inflation out of an interest rate rise in this simple new-Keynesian model with price stickiness.

So, to sum up, the world is different. Lessons learned in the past do not necessarily apply to the interest on ample excess reserves world to which we are (I hope!) headed. The mechanisms that prescribe a negative response of inflation to interest rate increases are a lot more tenuous than you might have thought. Given the downward drift in inflation, it’s an idea that’s worth playing with.

Bloomberg noted earlier this month:

Now, the Neo-Fisherites [including Minneapolis Fed President Narayana Kocherlakota] have been joined by a very heavy hitter — University of Chicago economist John Cochrane. In a new paper called “Monetary Policy with Interest on Reserves,” he explains a mechanism by which higher interest rates raise inflation. Unlike Williamson’s model, Cochrane’s model obtains a Neo-Fisherian result without appealing to fiscal policy. In fact, he finds that in some cases, raising interest rates can even stimulate the economy in the short term! He concludes succinctly:

The basic logic is pretty simple: raising nominal interest rates either raises inflation or raises real interest rates. If it raises real interest rates, it must raise consumption growth. The prediction is only counterintuitive because for so long we have persuaded ourselves of the opposite[.]

Cochrane has a simple explanation of the model’s key predictions on his blog. He hypothesizes that now that the Fed pays interest on the reserves that banks hold with the Fed, monetary policy will be even more Neo-Fisherian — i.e., even more perverse.

***

Cochrane’s arguments are based on simple equations that are at the heart of most modern macroeconomic models. If the Neo-Fisherites are right, then everything the Fed has been doing to try to stimulate the economy isn’t just useless — it’s backward.

Now, the overwhelming majority of empirical studies tell us that QE, and Fed easing in general, tends to raise inflation in the short term. But what if that’s at the cost of lower inflation in the long term? Japan has been holding interest rates at zero for many years, and its economy has been in and out of deflation. Massive QE has noticeably failed to make the U.S. hit its 2 percent inflation target. What if mainstream macroeconomics has it all upside down, and prolonged periods of low interest rates trap us in a kind of secular stagnation that is totally different from the kind Harvard economist Larry Summers talks about?

It’s a disquieting thought.

One of the main architects of Japan’s QE program – Richard Koo – Chief Economist at the Nomura Research Institute – explains that QE helps in the short-run … but hurts the economy in the long run (via Business Insider):

Initially, long-term interest rates fall much more than they would in a country without such a policy, which means the subsequent economic recovery comes sooner (t1). But as the economy picks up, long-term rates rise sharply as local bond market participants fear the central bank will have to mop up all the excess reserves by unloading its holdings of long-term bonds.

Demand then falls in interest rate sensitive sectors such as automobiles and housing, causing the economy to slow and forcing the central bank to relax its policy stance. The economy heads towards recovery again, but as market participants refocus on the possibility of the central bank absorbing excess reserves, long-term rates surge in a repetitive cycle I have dubbed the QE “trap.”

In countries that do not engage in quantitative easing, meanwhile, the decline in long-term rates is more gradual, which delays the start of the recovery (t2). But since there is no need for the central bank to mop up large quantities of funds, everybody is no more relaxed once the recovery starts, and the rise in long-term rates is far more gradual. Once the economy starts to turn around, the pace of recovery is actually faster because interest rates are lower. This is illustrated in Figure 2.

costs of qe

Indeed, things which temporarily goose the economy in the short-run often kill it in the long-run … such as suppressing volatility.

Postscript: Quantitative easing fails in many other ways, as well …

The original inventor of QE – and the former long-term head of the Federal Reserve– say that QE has failed to help the economy. Numerous academic studies confirm this. And see this.

Economists also note that QE helps the rich … but hurts the little guy. QE is one of the main causes of inequality (and see this and this). And economists now admit that runaway inequality cripples the economy. So QE indirectly hurts the economy by fueling runaway inequality.

A high-level Federal Reserve official says QE is “the greatest backdoor Wall Street bailout of all time”. And the “Godfather” of Japan’s monetary policy admits that it “is a Ponzi game”.

From Ambrose

RE

http://www.telegraph.co.uk/finance/economics/10999086/Europes-bond-yields-lowest-since-15th-century-Genoa-on-deflation-Russia-risk.html

Europe’s bond yields lowest since 15th century Genoa on deflation, Russia risk

German, French and Dutch yields have been sliding for months as the eurozone recovery wilts and several countries flirt with recession
Closeup of the map of Europe seen on the face of a 10 Euro Cent coin in Paris, February 15, 2012
David Owen, from Jeffries, said investors are starting to price in quantitative easing by the

By Ambrose Evans-Pritchard

8:13PM BST 29 Jul 2014

Bond yields have fallen to the lowest level in modern history in Germany, France and the eurozone’s core states, signalling a high risk of deflation and mounting concerns about sanctions against Russia.

The yield on German 10-year bonds fell to a record low of 1.11pc in intra-day trading, partly on safe-haven flows. French yields dropped in tandem to 1.5pc. These levels are far below rates hit during the 1930s or even during the deflationary episodes of the 19th Century.

“Yields fell this low in Genoa in the 15th century but there has been nothing like this in Europe in modern times,” said professor Richard Werner, from Southampton University. “This reflects the weakness in nominal GDP and a slow economic implosion caused by credit contraction. The European Central Bank is at last starting to act but it is only scratching the surface.”

German, French and Dutch yields have been sliding for months as the eurozone recovery wilts and several countries flirt with recession, but the latest plunge reflects a confluence of forces. “Investors may fear that the worsening tensions with Russia could be the external shock that finally pushes the eurozone into a deflation trap,” said Simon Tilford, from the Centre for European Reform.

Bond yields have also fallen to all-time lows in Spain and Italy but the “risk-spread” over German Bunds has been widening over recent weeks. The cost of insuring Italy’s debt through credit default swaps has risen by a third since June.

European diplomats reached a deal on Tuesday on “tier 3” sanctions aimed at shutting Russian banks out of global capital markets and slowly suffocating the Russian economy, though the original plan to limit technology for oil and gas exploration has been diluted. Creditors have already frozen a $1.5bn loan for VTB bank due to be agreed last week.

The European Commission said the measures are likely to cut 0.3pc of GDP off EU economic growth this year, and 0.4pc next year, even if the crisis is contained without a serious disruption of energy supplies. “This is a significant hit to growth. It implies such low growth in parts of southern Europe that it makes it almost impossible to arrest the rise in debt ratios,” said Mr Tilford.

The Moscow newspaper Izvestia said Russia’s parliament is already drawing up legislation to blacklist “aggressor countries”, specifically targeting auditors and consultants. These include Deloitte, KPMG, EY (formerly known as Ernst & Young), Boston Consulting and McKinsey.

Tim Ash, from Standard Bank, said this would trigger clauses on bond covenants that rely on external audits. “If they go down this path they could provoke a brutal market reaction,” he said.

David Owen, from Jefferies, said a lack of genuine economic recovery is what lies behind Europe’s falling yields, already replicating the pattern seen in Japan in the 1990s. “A third of all countries in the eurozone are already in deflation once you strip away taxes, and another four have no inflation, including France and Spain,” he said.

“Corporate profits fell in the first quarter, and so did household disposable income, if you exclude Germany. We are seeing no growth at all in world trade, which is highly unusual. The CPB trade index rolled over in May and fell 0.6pc,” he said.

Mr Owen said investors are starting to price in quantitative easing by the ECB, which would entail sovereign bond purchases and potentially push yields lower. The Bundesbank would be the biggest buyer on a pro-rata basis under the ECB’s “key”, but German debt is relatively scarce. “Investors know this and it is driving Bund yields even lower,” he said.

For Russia, deep recession looks inevitable. The commission said sanctions will cut Russia’s growth by 1.5pc in 2014, and by 4.8pc in 2015. A return to the Soviet stagnation of the early 1980s is becoming all too likely.

From Investing.com

Follow the Link to see the graphs accompanying the article. Here’s one though:

[img[/img]

RE

http://www.investing.com/analysis/is-deflation-still-a-threat-to-gold-232978

Is Deflation Still a Threat to Gold?

By Doug Eberhardt Commodities Nov 19, 2014 05:51AM GMT

When you talk to investors as to why they buy gold, many look to the precious metal as being a hedge against inflation. But since 2011 we have been experiencing deflation and the yellow metal has felt the affect of an overall declining commodity market.

Many that have been relentlessly bullish on gold since 2011 point to inflation in the money supply. Indeed we do have inflation in M2 Money Supply as you can clearly see from the following chart. The problem is it’s not circulating.

M2 Money Stock
M2 Money Stock

Money Velocity Zilch

What about Money Velocity? With all that printing going on, money is not circulating in the economy. The Fed doesn’t like this but even putting interest rates to zero won’t force consumers and businesses to spend. We have not seen this much of decline in velocity for as long as the Federal Reserve Bank of St. Louis reveals on their chart; 54 years. This is a modern day unprecedented issue the Fed is fighting and is a possible precursor to more QE down the road if necessary to get money moving (inflation target of 2%).

Velocity of M2 Money Stock
Velocity of M2 Money Stock

Bernanke when he was Fed Chairman was clear in what the Fed would do during deflation in his 2002 speech Deflation: Making Sure “It” Doesn’t Happen Here. And people complain about Fed transparency (j/k Austrian economists). There is no doubt in my mind that a Yellen led would implement more QE if interest rates started to shoot up past 3.06%.
Higher Interest Rates Coming?

The financial media keeps telling us the economy is moving along just fine and higher rates are coming based on the fact the Fed says higher rates are coming. But what does the price action of rates show us? Interest rates are still low. The 3.06% rate mentioned above comes from the high of the last 12 months reached last year.

10 Year Daily Chart
10 Year Daily Chart

A decline of .02 on the 10 Year Treasury Note was the reaction for interest rates today despite the better than expected PPI report.
Commodities Declining

While we will get bounces in various commodities from time to time, like Natural Gas of late with the onslaught of winter snow hitting 50% of America earlier than expected, they are still mired in deflation and the Fed just can’t see it.

Have you seen commodity charts since 2011? Below is a chart of the Continuous Commodity Index (CCI). The Continuous Commodity Index is the CRB index in its original equal weight form from 1957.

CCI Index
CCI Index

As you can see from the chart, the 17 commodities that make up the index, including grains, oil and metals, all are falling in price since 2011.

Sure, when you go to the grocery store you’ll see many products that have higher prices. But some of that is related to the California drought driving up food prices. You also should consider the fact that more in America are on Food Stamps than ever before. If the government is buying a lot of the food, guaranteed, then the prices will move higher.

One cannot consider higher college tuition costs or government health care related prices being higher inflation related because anything the government guarantees in price gives the companies doing the selling carte blanche to raise prices.
Dollar Still Bullish

As you can see from the chart below the dollar has been bullish since 2011. This just so happens to be the year for the top in gold and silver. Deflation has a tendency to be dollar bullish, the opposite of inflation.

I had mentioned in an article from August of last year where I said I was dollar bullish that I eventually will become bullish on the dollar and precious metals at the same time. We’re not there yet, but I explained this scenario as to why in Chapter 4 of my first book Buy Gold and Silver Safely and will be explaining it further in my next book Illusions of Wealth.

US Dollar Index Daily Chart
US Dollar Index Daily Chart

What the Fed Can’t See
Dollar Strength Hurts Producers

Japan and Europe sure know that in order to become more competitive and see your economy grow you have to make your currency weaker. Does the Fed know this? Can they even do anything about dollar strength when perception out there is it’s a safe place to keep your wealth right now. If you are Japanese do you want your wealth in yen or dollars? Same goes for Europe right now with the decline of the Euro. What about South America countries like Brazil and Argentina? All of these countries want weaker currencies so they can improve their exports. Japan seems to be the most proactive.

A stronger dollar hurts producers here in the U.S.

Currencies that are too strong or too weak not only affect individual economies, but tend to distort international trade and economic and political decisions world-wide. This is compounded by the fact that individual consumers can benefit from changes in the value of a currency, while producers in the same country are hurt.

Europe and Japan Experiencing Recession and Deflation

Japan and Europe had worse than expected data come out yesterday. Economic data showed the Japanese economy in the last quarter contracted fueling hopes of more stimulus or a postponement of a sales tax hike due next year.

The IMF came out last week and said that the euro zone growth could be worse than expected.

Does the Fed not see that this could have an effect on the U.S.? Are some of the M&A deals offsetting the fact that American industrial production declined? Is the stock market possibly overvalued or does price action trump everything and follow the trend higher with stops? The trend is your friend and it sure hasn’t hurt those with 401k’s.
Perhaps the Fed Only Looks at Consumer Confidence

Does consumer confidence really mean anything? Aren’t they the last to know what’s going on? Did the majority of consumers not see the 2008 crisis coming? Perhaps the Fed believes the consumer knows all, but clearly they don’t despite October’s good consumer confidence numbers. Maybe the Fed should listen to the Measure of CEO Confidence where “slightly more than 44 percent of business leaders anticipate economic conditions will improve over the next six months, down from 53 percent last quarter.” Of course you can expect the bank CEO’s to keep their high salaries without a care for the economy since they know the most about how to make money; get it from the Fed!
The Fed is Reactive

The Fed reacts AFTER the fact. See the 2008 financial crisis which followed the Fed’s lowering of interest rates pre 2008 to do what; stimulate the economy. And when this current lower interest rate experiment fails we will see more intervention. Anyone see a pattern here? If not, study Japan. Then look to Europe for more problems. Eventually the U.S. will be swallowed up even more into this deflationary spiral and the Fed will fight it all the way.

The Fed also has their own issues to worry about now too as funding the government may be an issue again with the new Republican controlled Congress installed in 2015.

The Fed is going to be under more scrutiny with Republican control of the House and Senate in 2015.

A proposal was introduced in June to curtail how the central bank sets monetary policy…The measure would mandate the Federal Open Market Committee to map a plan or rule for how it would adjust interest rates.

Of course Fed Chairman Janet Yellen doesn’t like this claiming “the measure would interfere with the independence of monetary policy, by bringing political pressures to bear on the committee’s judgment.”

The Fed also ignores things like U-6 unemployment rate which is still over 11% and believe the economists who predict stronger fundamentals. How can you ignore this?
How All this Deflation Relates to Gold Today

Gold prices are still feeling the effects of many of the issues I brought up above. This includes a stronger dollar, no real inflation, commodities in a downward trend, countries experiencing deflation, strong treasuries, no money velocity and you can add a stock market that keeps money moving towards it rather than a beaten down asset like gold. One can’t ignore this.

My advice is to still dollar cost average into a position in the metals. While many utilize ETFs such as (GLD) or (SLV) to play the metals I prefer an investor hold the real thing.

My thoughts are that many of these indicators I follow will see gold break to lower lows after this run up we are experiencing and I do think the psychological figure of $1,000 will be taken out. After we take out that price level we may test the $850 level to break the back of gold bugs and get the CNBC cheerleaders to claim the gold bull dead. It is between this level that I will be writing my all in article. My indicators haven’t let me down so far and hopefully they won’t in trying to provide further good analysis.

For those that don’t know I write my current thoughts on my website 5 days a week, Sunday through Thursday. While we do concentrate on the gold and silver markets, I try to give my micro analysis on the miners and other investments (JNUG), )NUGT), (GDX), (JDST), (UGAZ), (TNA), (TZA), (USO)) where I see opportunity. Many calls have done quite well the past few weeks and I’ve received a lot of emails from readers thanking me for this recently added section to the site.

Beef Prices go up because of insufficient water to feed cattle.

Health Insurance costs go up because that Ponzi is coming apart at the seams.

Credit however continues to contract for all but the TBTF Banks. Reason for that should be obvious. If you control credit creation, you can always issue it to yourself until the system collapses.

Overall, credit contraction is forced because of resource constraints. Obvious it had to collapse at some point.

Should get interesting from here.

RE

http://www.zerohedge.com/news/2014-11-19/usdjpy-hits-118-abes-worst-nightmare-weaker-currency-weaker-stocks

USDJPY Hits 118 – Abe’s Worst Nightmare: Weaker Currency, Weaker Stocks

[img[/img]

Even Forbes is finally catching up with me. 🙂

RE

http://www.forbes.com/sites/investor/2014/11/17/japan-in-recession-warnings-of-a-global-financial-crisis/

Japan In Recession: Warnings Of A Global Financial Crisis

Bert Dohmen, Contributor

The major central banks have pursued a “zero interest rate policy” known as ZIRP, since the financial crisis of 2008-2009. More than $10.5 trillion of artificial credit were created. Has this unprecedented policy, never before seen in history, caused sustainable economic recoveries?

The evidence says: “No way.”

No recession, not even the Great Depression, has seen such anemic economic growth. Looking at it scientifically, instead of as an economist, we must ask, “Have central bank efforts to ‘stimulate’ actually done the opposite?” Has ZIRP actually contributed to global deflation?

Speaking at the International Finance Forum 2014 Conference in Beijing on November 1, 2014, the very influential Jaime Caruana, General Manager at the Bank for International Settlements (BIS), often called the “central bank for central bankers,” warned:

… the build-up of financial imbalances risks a future financial crisis, an impaired financial sector and a debt overhang.

The U.S. Federal Reserve has created an unprecedented $4 trillion out of thin air. The ECB in Europe has bought hundreds of billions of euros of government bonds in the market place. It is now apparently ready to create one trillion euros via new bond purchases.

Japan is an excellent example of the folly of central bank “stimulus.” In 2013 Japan surprised the markets with a huge $1.4 trillion stimulus and bond buying program. In proportion to GDP, that is twice the amount of the U.S. Federal Reserve’s last, huge quantitative easing effort. But Japan did something unintelligent: it raised the sales tax mid-year. In early 2014, I had predicted in the Wellington Letter that this planned tax hike would drive Japan’s economy back into recession.

After this summer’s sales tax hike in Japan, we wrote that Japan’s economy was coming to a screeching halt. Immediately thereafter, in the quarter ending June, Japan’s GDP plunged an amazing 7.1%. Such a plunge is usually only seen during depressions.

But economists didn’t worry, and just blamed it on the sales tax hike. We replied: it doesn’t matter what caused it, but it is happening. How can anyone ignore such a catastrophic decline?

On November 17, 2014 Japan released another shock: in the quarter ending September, GDP growth declined 1.6%. Two consecutive declining quarters qualify as a “recession.” That’s what they got for the biggest central bank stimulus in world history.

The Japanese government apparently had advance notice. On October 31, they announced another record shattering expansion of stimulus of about $800 billion. The reason: “inflation” is not rising as expected.

Additionally, the government and its pension fund will purchase ETFs in the market, not just in Japan’s own, but around the world. This is unprecedented. Governments everywhere usually follow the strategy: “if something doesn’t work, do more of it.”

Europe will now have a skirmish with deflation and recession. Deflation is appearing everywhere. Some of the major countries are on the borderline of recession. Even Germany saw negative economic growth last quarter. All the central bank’s (ECB) stimulus have done nothing except kept the zombie banks afloat.

What to do? On Nov. 17, the head of the ECB, Mario Draghi, announced that buying government bonds from around the euro zone is an option. He didn’t say that Germany must consent, although it is prohibited by German law for the country to participate in such action. Germany’s leadership recognizes the dangers of these programs.

China’s private sector economy is now going into recession in spite of the ‘official’ GDP growth of 7.3%, which is largely fiction. According to my work, China has been in a severe credit crunch since June 2013 when short term interest rates quadrupled overnight, from around 6% to 25%. Analysts ignored it and said it was “just a fluke.” Well, such flukes don’t happen in very large markets. It was a signal that the China credit crisis was accelerating and that the government was losing control.

China says that it will not bail out private companies. But it is ready to buy huge amounts of local government debt, railway bonds, and provide liquidity to the governmentally owned banks, in order to let the immense credit bubble deflate slowly without causing a deep recession. That seldom works, if ever.
…
Read the rest at Forbes

Actually, about half the referrals come from TBP. 🙂

RE

Another old adage is never bring a Knife to a Gunfight, and don’t send an Imbecile into an argument that takes some Intelligence. Pitching Ad Hom is no substitute for making a decent argument. Regurgitaing Sheeple over and over again is ridiculous, because that applies to just about everyone here by Imbecile John’s definition. Admin lives in a suburban community outside Philadelphia, Stucky lives in a suburban community in New Jersey, SSS lives on a Golf Course in FL etc.

Gasoline prices and many commodities from Copper to Iron are all experiencing deflation. Even Wheat prices have show a steady downward trend since 2012.

[img[/img]

Beef prices and Produce prices are being hit by production problems due to drought in many neighborhoods. So if you buy a lot of beef and fresh veggies, your bills probably are going up. Mine have been going down here overall, particularly with respect to gasoline, I’m paying a full Dollar less per gallon now than I was 6 months ago.

Anyhow, Imbecile John just does disruptive trolling, he doesn’t have any worthwhile arguments and overall he hasn’t got any real good ideas other than his fantasyland Jeremiah Johnson idea, which is not gonna work anywhere in the lower 48, and would be pretty hard to pull off up here too.

RE