Tag Archives: Oil

G7’s Sheeple Distraction in IQALUIT, Canada, while Central Bankers Meet Secretly in Australia.

We don’t know what the Central Bankers will be discussing during their secret two day meeting in Australia, but what we know is that you don’t hold a well publicized G7 economic ministers meeting at the same time for no reason. If the CBs need a distraction that means that something is very grave and serious is going on. Whether we are on the verge of a new panic and financial crisis or something else, but it cant be good. Perhaps the sovereign debt issues in Europe are on the verge of causing a big monetary implosion and stock markets collapse.


Google wants to get into energy trading business. Is this a sign of coming deflation in that sector?

When you see automotive companies and consumer electronics companies getting into the business of Finance, you know that the boat is lurching to far to one side in will most surely topple over. So it happened in the US Financial Services industry that has expanded far beyond the original investment banks and brokerage houses.

Dubai default is DEFLATION.

When a debtor reneges on its loan repayment obligations or asks to postpone them this is deflation by definition. The debts that cannot be repayed are defaulted on and so the total debt outstanding in the economy deflates. And what about prices? The prices on real estate in Dubai are down as much as 50% since the beginning of the world financial crisis. So when debt deflation takes hold assets lose value and cause even more defaults. We say that we are in a deflationary spiral then. When it stops is a big question, but given world wide government intervention in free markets this almost assures that the so much needed adjustment will take a long and painful haul. Yet the prices will get to their natural level in spite of all government actions to support them.

One can hope that the Dubai default situation will give a much needed kick to accelerate the process of deflation and wipe out the speculators and their central bank friends.

Here goes Dubai.

Treasury Three-Month Bill Yields Turn Negative.

When you have US Treasury yields sitting at historic lows at prolonged periods of time and across the entire yield curve, it only means one thing – delfation is here and anywhere you look on the horizon. But when you have yields turn negative, which really means investors paying privately owned Federal Reserve to hold their money as it has become the only safe place to keep it, this is a sign of a crash or some impending credit event which is also deflationary. Someone somewhere knows something. Only indication we, the common folks get of an impending crisis, is the sharp jump in excess reserves held with the Federal Reserve banks by other financial institutions. The excess reserves rose by almost $250 Billion between July of 2009 and November 2009, while the stock market has been setting yearly highs and “recovery” has been gathering pace, or so the powers that be would want us to beleive. Add to this the November 19th, 2009 delay in release of “Reserve Bank credit H.4.1 weekly report” and you get a shiver down your spine that something is about to hit the proverbial fan.

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.

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.

Who’s afraid of deflation?

A swelling dollar can clearly be good news for shoppers as well as for those who are sitting on cash. Deflation is often a result of economic progress — productivity improvements that increase spending power.

German Consumer Prices Post First Annual Decline in 22 Years.

Just a month ago the ECB officials were confidently BSing everyone that there was not threat of deflation in Eurozone while the credit was collapsing all around them and the CPI was edging lower. Here we are in July and CPI is now drops at fastest pace in Germany, the biggest Eurozone economy. When will ECB admit the truth?

RATE FUTURES REPORT: Signs Of Deflation Lift Treasury Futures.

Futures are financial derivative contracts that predict the price of an underlying security at various future dates and represent today’s bets by investors of what those prices will be then. The US Treasury bonds are the most widely held and traded securities in the world and the future they predict is that of deflation. This is not surprising given the action at July 08, 2009 10-year Treasury notes auction that saw record bid to cover ratio and a sharply lower yield. And when yield curve flattens you can be that this is a good indicator of suppressed economic activity down the road.