Tag Archives: consumers

Australia’s housing bubble pop.


It looks like there are jitters beginning to be felt through Australia’s house bubble. How do we know? Because when “housing bubble fears grow” it already burst. It is too late now. Whoever sells first wins.

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Japan’s consumer prices fall again in January. Deflation now -1.3% compared to January 2009.


Japan, after two decades of fighting against deflation and racking up 240% of GDP public debt has literally nothing to show for. The deflation is firmly entrenched in the Japanese economy, which is a very good thing for consumers, not speculators.

Porn deflation.


In a punny way of things the pron industry is deflating in unison with the rest of the US economy.

Q3 2009 private sector credit collapsed at – $1.81 Trillion annual rate.


The ONLY major player still borrowing money in big amounts was the United States Treasury Department (line 3), sopping up $1481.2 billion of the credit available — and leaving LESS than nothing for the private sector as a whole.

Overall total credit in the economy shrank at an unprecedented annual rate of -$275.6 billion.

Private sector credit fell at an astonishing – $1.8098 Trillion.

Retail Sales Data from NPD Shows Consumer Technology Revenue Declined the Week of Black Friday.


When you don’t have government meddling into the free-market price setting mechanisms the prices decline and help consumers save money. Such is the case of consumer electronics that has been experiencing deflation for many years now and the skies did not fall. To the contrary all consumers benefited from natural price declines while the quality and capability of consumer electronic goods have been continuously improving. Now, when most of us badly need lower prices the only bright spots of the economy are where the government is absent and not trying to prop up prices, with our stolen money by the way.

Sovereign Defaults Coming in Second Stage of the Financial Crisis.


The first stage of the deflationary debt unwind resulted in massive consumer and corporate defaults, particularly in the financial sector. This sector being one and the same as the governments that it controls, the state has thrown all the resources that it had and did not have (pulled them out of thin air) in order to save its Banking sponsors. While it has given the Banks the respite and saved many of them for now from going belly up, it did not solve a thing. The bad debts have simply been transfered to the Central Banks’ balance sheets that are expected to be later transferred to the taxpayers of each and every country. Whatever was not transfered was hidden by suspension of the mark-to-market accounting rules. Thus, the deflation that is not seen has not gone a way, but has been simply hidden.

Demand deflation.


In a deflationary environment the psychology of economic agents, be it lenders or borrowers, is such that neither is motivated to engage in credit transaction. This is because consumer attitudes in a deflationary environment are leaning towards conservation not expansion and consumption. Thus, making it economically discouraging for business to expand. The deflationary times follow an expansionary period which ends in an oversupply of goods and services, and overcapacity in production that makes them happen.

Deflation is firmly taking root in USA. FED is still in denial.


Even though the signs of deflation are everywhere as expressed in contracting credit, money supply, and prices, the privately owned Federal Reserve’s executives continue to beat about the deflationary bush by referring to it as “disinflation” and talking about it in future tense. It has been happenning already for the past year and a half and it will continue as evidenced by record low long term Treasury yields this week. The below article provides a detailed discussion and solid evidence of deflation and how it works.

The Lowdown on Deflation.


Deflation is the contraction (reduction) of money and credit. It occurs when the economic system is carrying too much debt to be supported by the level of income generated by economic activity. It occurs because too much debt has been incurred to create unproductive assets that don’t generate income. Deflation is a corrective process, it’s simply the market (you and I) not being able to service debt, so we must forfeit.

Does the world have the courage to deal with its debts?


Quite a sensible article from an MSM source, Telegraph of UK, that aptly discusses the real state of things on the Central Banks’ front of deflationary fighting and suggests several solutions out of this global economic crisis. I, however, do not agree with the proposed solution ouf of indebtedness problem that we the people should pay down the debts as the author puts it “very slowly, by sweat and toil”. This contradicts the very natural economic self-interest of the majority of hundreds of millions of people that were either duped into borrowing by financial wizards or had to do it as they saw no other way of being able to afford things as the wages stagnated for decades. No, I propose to default on all the debts, walk away and let the owners of this world financial system have it. I in essense call for a debt revolt, stick it to them and let them be crushed under their own debts.