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ALBERT EDWARDS WARNS: Prepare For Overwhelming 'Waves Of Deflation' To Suck Us Into Recession
BI ^ | 8-12-2015 | Ben Moshinsky

Posted on 08/12/2015 6:44:05 AM PDT by blam

Ben Moshinsky
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.

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: china; deflation; economy; markets
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To: mad_as_he$$

copper WIRE

Miss more coffee please...


21 posted on 08/12/2015 9:33:17 AM PDT by mad_as_he$$
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To: yefragetuwrabrumuy
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.

Any examples and recommendations on things to buy and hold/resell? Other than metals? In the past, the joke was to buy wheelbarrows so you could cart inflated cash around to buy necessities; I'm looking for more realistic examples.

22 posted on 08/12/2015 10:08:49 AM PDT by roadcat
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To: blam

Honestly, I don’t care what their definition of a recession is, with 40-90 million people out of work, you can’t tell me we’re not in the middle of some sort of recession.

This is not a normal economy for the United States, and they continue to lie to us about it.


23 posted on 08/12/2015 11:14:25 AM PDT by DoughtyOne (If the fetus at one minute old is not alive, what is it?)
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To: Buckeye McFrog

Printing money by the FED will not fix the problem unless we stop the DEBT BUBBLE. We are about to take an oncoming train in the rectum and we are not listening to market.


24 posted on 08/12/2015 2:52:07 PM PDT by Texas Songwriter (awaki)
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To: Texas Songwriter
--Printing money by the FED will not fix the problem unless we stop the DEBT BUBBLE--

You talking about gov't debt or private debt?

25 posted on 08/13/2015 5:32:53 AM PDT by expat_panama
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To: blam

Stop, please. You’re low prices are killing me!


26 posted on 08/13/2015 6:11:33 AM PDT by 1010RD (First, Do No Harm)
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To: RayChuang88

It’s a gift, but only if we elect a Republican.


27 posted on 08/13/2015 6:12:47 AM PDT by 1010RD (First, Do No Harm)
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To: riverdawg; Paladin2

Very good, RD, on the monetary side, but what is killing the world’s economy is terrible fiscal policy. China is paying for its centrally planned economy and missing (read aborted) people.

It’s the pension crisis, tax and regulatory policy that are at the heart of the problem. In a word: socialism.


28 posted on 08/13/2015 6:17:07 AM PDT by 1010RD (First, Do No Harm)
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To: Texas Songwriter

If you know of an illegal counterfeiting scheme coming out of the Federal Reserve then you should report them to the FBI promptly. ;-]

Fed doesn’t print money. The US Treasury prints money.


29 posted on 08/13/2015 6:30:01 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD
I believe the Congress approves the selling of a certain quantity of bonds. They empower the US Treasury to sell a certain amount of debt (bonds). Treasury then sells bonds to the (mostly) international banks who market the bonds (to international banks, some foreign countries, and at times some hedge funds.

So do I really need to go through all of that that most people on this thread already know or do I need to attend to an anal retentive declaration like you make.

I do believe,however the Constitution of the United States specifically spells out what money is and who has the authority to create money and what it is to be created from. But we are not talking about that, are we?

30 posted on 08/13/2015 9:03:02 AM PDT by Texas Songwriter (awaki)
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To: expat_panama
Private money is 'borrowed' by creating debt.

Government debt is backed only by the full faith and credit of the USGoverment. As long as it can take money from the people they can retire some debt. But as long as the debt bubble exceeds 40 billion per month approved by congress and that overall US debt (both private and govt) it cannot catch up and the bubble (debt) grows. Deflation.

31 posted on 08/13/2015 9:08:56 AM PDT by Texas Songwriter (awaki)
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To: Texas Songwriter

So what does the FED do?


32 posted on 08/13/2015 9:14:18 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD
1010RD, that is the question. I think they have no more tricks in their basket. If they stop 'printing", the downward spiral accelerates. If they increase printing they delay, for a little longer period of time the inevitable crash of the economy. They press the spring down a little harder, but when the spring is released, it will be made a much more terrible result.

I believe they missed the window of opportunity years ago to raise interest rates, which not doubt would have resulted in substantially higher unemployment. That was politically unacceptable, but the laws of economics will impose that on us, unfortunately.

So, my answer to you is, I do not know what the FED should or would need to do. I think the laws of economics will force this disaster and all of its permutations to a showdown, the likes of which we have never seen in this country. We have economic cancer and we have known it for years , and we are taking aspirin for the cure.

Do you think these trends can be reversed back toward normalcy? I would like good news if you do.

33 posted on 08/13/2015 9:37:01 AM PDT by Texas Songwriter (awaki)
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To: Texas Songwriter

The FED is out of solutions and the patient is still sick. Imagine a flu being suppressed by antidiarrheal and that’s what the FED has done via low interest rates. They cannot help themselves as they’re bankers and view the world through the eyes of a creditor.

The government bailed out banks creating even more moral hazard. Eventually, you have to let the virus take its course. We’ll survive, but there will be upheaval. The Establishment works always for the status quo, but if the river wants to leave its course it will.

ZIRP isn’t healthy and isn’t going to fix the problem. Lower debt will. A return to the 2007 regulatory system, better to go back to 1970 even, will fix it. A reduction in taxes or replacement of the current tax code with a consumption tax will do it, but no matter what the recovery of the patient will hurt.

But after an intense decline over a short period trust returns and people pick up bargains and the economy restarts. That’s the history of US deflations. The difference between previous deflationary periods is government intervention via the FED and massive Big Gov.


34 posted on 08/13/2015 10:49:11 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD
"If you know of an illegal counterfeiting scheme coming out of the Federal Reserve then you should report them to the FBI promptly. ;-]"

The Federal Reserve Bank is not Federal, has no Reserves and is not a Bank.

35 posted on 08/13/2015 10:54:43 AM PDT by blam (Jeff Sessions For President)
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To: blam
Will there be a currency war or trade war with China?

Answer: BOTH.

36 posted on 08/13/2015 10:56:28 AM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: blam

That sure is confusing.


37 posted on 08/13/2015 11:22:30 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

I hope you are correct and I am wrong. The great depression ran from 1929 to 1946. It took a World War and over 4500 work projects to pull us out of that depression. Everything I read indicates this will be much worse and much more dangerous. I think it will move us toward a world currency and our history of our standard of living will decrease and those in third world countries will rise. I guess we will all do the best we can and deal with changes as they develope.


38 posted on 08/13/2015 12:30:49 PM PDT by Texas Songwriter (awaki)
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To: Texas Songwriter

That’s not the true history. Hoover moved the country toward central planning and FDR, after attacking him over it, doubled down. WW2 didn’t ‘get us out of the depression’.


39 posted on 08/13/2015 1:36:44 PM PDT by 1010RD (First, Do No Harm)
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