Skip to comments.ALBERT EDWARDS WARNS: Prepare For Overwhelming 'Waves Of Deflation' To Suck Us Into Recession
Posted on 08/12/2015 6:44:05 AM PDT by blam
August. 12, 2015
Societe Generale strategist Albert Edwards may have finally out-beared himself. He warns the China devaluation is a step toward "a financial-market rout every bit as large as 2008."
In his new note, Edwards says the Chinese currency devaluation is the beginning of a period of serious foreign-exchange weaknesses in Asia.
This will force down import prices into the US and EU economies, aggravating a deflationary cycle that hits corporate profits and ending in a Lehman-style crisis:
We expect the acceleration of EM devaluations to send waves of deflation to the west to overwhelm already struggling corporate profitability and take us back into outright recession. As investors realize yet another recession beckons, without any normalization of either interest rates or fiscal imbalances in this cycle, expect a financial market rout every bit as large as 2008.
(Excerpt) Read more at businessinsider.com ...
Maybe this will finally force national economies around the world to seriously look at simplified tax codes and simplified business regulations to get their economies going again. That’s why it’s way overdue we have major tax reform here in the USA.
"Damn! More phones to destroy!"
I am so screwed.
What is the ize of the Chinese devaluing?
What is the size of the Chinese devaluing?
"The red metal is also sometimes referred to as Dr Copper for its ability to provide a prognosis of the health of the global economy. Down nearly 18% year to date, copper is making dire predictions."
"The People's Bank of China jolted markets overnight after lowering the renminbis daily reference rate against the US dollar by 1.8%, the largest such adjustment in its history.
As opposed to what we are in now?
the exuberance in copper and stocks coupled with the chinese propensity to gamble ran the prices up beyond the point of sustainability. One wonders what will become of the China warehouses full of those big copper billets (a Taipan reference)
Once again, I suggest that slowly, over a period of time, to withdraw a significant amount of cash to be kept in several different secure places under your control, but difficult to find during a police search.
Deflation is a huge opportunity to those that have cash, but the first banking and government response is to stop people from spending their money on valuables that are now inexpensive. Instead they want to create a cash shortage until they can flood the market with cash, resulting in serious inflation.
To make matters worse, if done incompetently, this can result in both deflation and inflation at the same time, since they affect different market segments. And having cash works here as well, as you can quickly spend your money before it loses value on those things whose prices are inflating, while spending the rest on those things that are deflating.
Nothing that can’t be fixed by cranking the Fed printing presses up to 11.
They’ve probably been pledged to a bank as loan collateral ... several times. Sooner or later that will unravel.
——theyve probably been pledged to a bank as loan collateral-—
ahh ha.... fantastic thought!
That’s what should have been done. Pledge the copper as collateral and then borrow 200% with which to buy margined stocks....... double your pleasure, double your losses
Now that’s the ticket!!
(bankers like to go for rides and it is up to the customer to take them)
Copper roofs look nice and wear very well as they turn a pleasant shade of green.
Meanwhile copper is higher than a kite.
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