OOOPS!!! Late this AM, (had to fight w/ termites) STOCKS ARE CRASHING! Metals are so so. Happened all at once --more news as we find out....
There is no such thing as a nongovernmental deflationary spiral. Historical US deflations end naturally, unless government gets involved.
I agree 100%.
IMHO, the deflationary spiral is/was a foregone conclusion since 2008.
The Government, the FED, has attempted to overcome this as are central bankers around the world and for the most part they have been successful in only deferring the natural process. The same thing happened after the 1929 crash.
While the FEDS involvement hasn’t allowed this cycle to play out on its own, the de-leveraging among certain components that drive our economy have occurred.
I’d like to see an “Honest” chart of consumer debt from say 1980 to present.
Most Wall Street analysts were surprised by the weak retail sales in the 4th quarter. There was an expectation of “pent-up demand” and with lower fuel costs they thought retail sales would come in higher.
I believe that there is “pent-up demand”, however since the labor participation rate is as low as it has been I’m not completely surprised.
On balance, people don’t take on new or additional debt unless they have a reasonable expectation that they will be able to pay it back.
Optimism or the lack of optimism still rules the day.
Make no mistake, we are in a deflationary cycle.
The US Dollar will go a lot higher.
Back in 2008, I suggested, as did others, that the Euro currency will break apart, I still think that that is a real possibility.
At some point the German sense of “Nationalism” will gain enough political traction that they will tell the rest of the Eurozone to go pound sand, as they should.
It must happen because it will eventually dawn on them that it’s the only solution.
OOOPS!!! Late this AM, (had to fight w/ termites) STOCKS ARE CRASHING! Metals are so so. Happened all at once --more news as we find out....
Durable goods sucked. Down 3.4% MOM verses .5+ expectations.
--but hey, everything we don't like will eventually end naturally if we wait long enough. The idea is to have that 'natural end' happen as soon as possible, or better still to not have start in the first place.