Posted on 10/27/2009 8:30:39 PM PDT by blam
Deflation Fears As Eurozone And US Credit Contracts
Bank lending to firms and households in the eurozone has fallen for the first time, raising fears of an economic relapse and a slide into deflation next year.
By Ambrose Evans-Pritchard
Published: 8:26PM GMT 27 Oct 2009
Data from the European Central Bank shows that the M3 broad money supply has contracted over the last six months, confounding expectations that ultra-low interest rates would soon boost monetary growth. Loans to the private sector fell 0.3pc from a year earlier, the first such decline since the data started in 1983.
The M3 figures include a wide range of bank accounts. They are watched closely by experts for early warnings about the economy a year or so ahead.
The picture is even starker in America where M3 has shrunk at an annual rate of 6.5pc over the last three months, a pace of contraction not seen since the 1930s. US bank loans have plummeted since May.
[snip}
(Excerpt) Read more at telegraph.co.uk ...
I get the impression that it hasn’t gotten near as bad as it’s going to.
Commercial realestate and business loans are coming due and not being replaced? Mortgages are going into foreclosurer faster than new mortgages are being issued?
All that money the Fed has thrown into the sytem is not circulating? Hmmm..what’s an investor supposed to do.
If asset values are falling..then cash is king.
There are those that say Great Depression II is on the way and will be worse than Great Depression I.
anyone care to speculate what's best in a deflationary market....?
Further on this....article and graph on front page a week or so ago saying that loans to small companies in the US had essentially dried up.
By fe Bureaus
Wednesday October 28, 04:04 AM
Source: Indian Express Finance
After witnessing intense volatility throughout the trading session, the Sensex (^BSESN : 16353.4 0) on Tuesday plunged by more than 380 points, its biggest single-day fall in over two months, on frantic selling sparked by the Reserve Bank s quarterly monetary policy review, which investors viewed as hawkish even though key policy rates were kept unchanged. The 30-share Sensex of the Bombay Stock Exchange (BSE) was down by 387.10 points or 2.31% to end the day at 16,353.40 points.
[snip]
Go here to see all Asian stock market results...the majority are down.
“There are those that say Great Depression II is on the way and will be worse than Great Depression I.”
I don’t doubt it. In the past it has been American innovation, hard work, and ambition that drove recoveries. We are now punishing the most innovative industries in our country, supporting those that no longer are innovative, and punishing the ambitious and industrious people in society. Social engineering at its best.
found this gem frm NY ....
The number of U.S. Small Business Administration-backed loans made citywide from last October through June, 449, plunged 79% from the 2,137 loans made from October 2007 through June 2008, government statistics indicate. The dollar amount of the loans fell by half, to $114 million.
Problem is, the small business area is the No. 1 in job creation...
I guess this fits in with 0bambi's master plan.
thanks for posting this
But I was thinking of new companies and profitable existing companies who want to expand.
Still have the same problem, you don’t wish to expand when you cannot sell your current inventory.
So the ECB lowers interest rates, the dollar soars.....
(buy more ammo)
". . . excess liquidity from low rates and quantitative easing is flooding into the equity (QE) and bond markets without gaining full traction on the underlying economy."
And the "Fed QE" comes in the form of buying half of The Kenyan's government bonds which he doles out to non-productive government employees.
yitbos
I guess this fits in with 0bambi's master plan."
Of course, the petite bourgeoisie is the worst enemy of Marxism. It is much easier to control a few big companies than a million little capitalists.
yitbos
We have yet to see ONE idea emanate from this intellectually-bankrupt political cesspool that would demonstrate growth, profit, and societal enrichment. If I've missed any that they proposed, please tell me about it, then phone Ripley.
In the not-too-distant future, we are going to find out just how resilient Americans (and America!) are.
Truly, these are the times that try men's souls!
CA....
Somehow “eurozone” sounds like something that needs an application of deodorant.
Just saying...
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