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Keyword: deflation

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  • Eurozone deflation hits Ė0.6%

    01/30/2015 6:32:21 AM PST · by Olog-hai · 13 replies
    European Voice ^ | 01/30/2015 11:42 CET | Dave Keating
    The eurozone experienced negative inflation for the second month in a row, according to a flash estimate published today (30 January) by Eurostat, the European Union¬ís statistical office. Inflation is expected to be at ‚ąí0.6%, with consumer prices falling further than economists had forecast. The fall represents the biggest decline in prices in the history of the euro. [¬Ö] The drop was driven by the fall in energy prices (‚ąí8.9%, compared with ‚ąí6.3% in December). [¬Ö] The deflationary spiral comes as Mario Draghi, the president of the European Central Bank (ECB), is trying to tackle deflation with a policy of...
  • Global downsides: 1 high debt; 2 Lack of growth and deflation; 3 Fragile EM...

    01/28/2015 3:11:59 PM PST · by alexmark1917 · 1 replies
    Rajan: "Today, debt is making it difficult for developed countries to resume pre-2008 growth rates" http://t.co/hi4QoAqSA8 ó Project Syndicate (@ProSyn) January 18, 2015 Today, debt is making it difficult for developed countries to resume pre-2008 growth rates, let alone restore the levels of GDP that would have been attained if the subsequent Great Recession had not happened. Meanwhile, industrial countriesí overall debt/GDP ratios are continuing to grow. In emerging markets, slow growth in the advanced economies has shut down a traditional development path: export-led growth. As a result, emerging markets have had to rely once again on domestic demand. This...
  • While You Were Sleeping, Lehman Just Happened...

    01/21/2015 2:51:17 PM PST · by alexmark1917 · 24 replies
    The "Deflationary Vortex": Global Dollar Economy Suffers Biggest Plunge Since Lehman, Down $4 Trillion One of the macroeconomic observations that has gotten absolutely no mention in recent months is the curious fact that while global economic growth has not imploded in recent quarters, it is because GDP has been represented, as is customary, in local currency terms. Of course, this comes as a time when local currencies (at least those which are not the USD) have been plunging against the greenback on the back of the expectations that the Fed will hike rates some time in the summer or later...
  • World deflationary forces have swept away Switzerland's defences

    01/16/2015 5:49:10 PM PST · by Lorianne · 17 replies
    Telegraph (UK) ^ | 15 Junuary 2015 | Ambrose Evans-Pritchard
    The Swiss National Bank has lost control. It is the latest in a list of venerable central banks to be overwhelmed by deflationary forces and global economic disorder. The country is already in deflation. The Swiss franc ended Thursday 13pc higher after the SNB abandoned its three-year efforts to defend a currency floor of 1.20 to the euro. ďWe have a free exchange rate once again,Ē said the SNBís president, Thomas Jordan. Indeed, but nobody is fooled by the SNBís attempt to spin this as benign. ďThis is a huge hit to their credibility,Ē said Deutsche Bank. The official statement...
  • Get Ready For The Worst Inflation Number In 6 Years

    01/15/2015 9:39:57 PM PST · by blam · 54 replies
    BI ^ | 1-15-2015 | Myles Udland
    Myles Udland January 15, 2015 The crash in oil prices might be good for consumers, but it's terrible for inflation data. The US Bureau of Labor Statistics is set to release the consumer price index on Friday morning at 8:30 ET. The index is a measure of consumer prices, and the most popularly cited measure of inflation. Expectations are for headline inflation to fall 0.4% in December compared to the prior month, which would be the largest month-on-month decline since December 2008. Compared to last year, headline inflation is set to rise 0.7%. "Core" inflation ó which strips out the...
  • Warning: Bond rates are going negative

    01/15/2015 6:38:42 PM PST · by MeneMeneTekelUpharsin · 57 replies
    CNN Money ^ | 15 January 2015 | Matt Egan
    Investors are so nervous that they are basically willing to lose money when they buy some government bonds. It's part of the latest fad in finance that's all the rage: "going negative." The yields on government bonds in Europe and Japan have dipped into the uncharted waters of negative territory. That means buyers of those bonds are essentially taking a loss just to hold onto those assets. They think their money is better off losing a few cents than putting it elsewhere. "It's basically a fee for fear," said Nicholas Colas, chief market strategist at ConvergEx. "Fear of deflation, fear...
  • One Of The Best Predictors Of Recessions Is Rapidly Approaching The Here-Comes-A-Recession Level

    01/15/2015 9:16:59 AM PST · by blam · 45 replies
    BI ^ | 1-15-2015 | Myles Udland
    Myles Udland January 15, 2015 Here's a word no one wants to hear: "recession." Headline payroll gains were strong in 2014 and GDP growth has been above 3% in four of the last five quarters. So everything is good, right? Well, one indicator that has a perfect record of predicting recessions is creeping towards some uncomfortable levels: the yield curve. The yield curve, or the interest rate paid on the range of US Treasury bonds, typically ranges from low to high: the shortest duration bills are paid the least interest, with investors earning additional yield for lending the government for...
  • Operation Helicopter: Could Free Money Help the Euro Zone?

    01/09/2015 1:19:20 AM PST · by Olog-hai · 8 replies
    Der Spiegel ^ | January 06, 2015 Ė 12:22 PM | Anne Seith
    It sounds at first like a crazy thought experiment: One morning, every resident of the eurozone comes home to find a check in their mailbox worth over Ä500 ($597) and possibly as much as Ä3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt. The scenario is less absurd than it may sound. Indeed, many serious academics and financial experts are demanding exactly that. They want ECB chief Mario Draghi to fire up the printing presses and hand out money directly to the people. The logic behind the idea is that recipients of the money...
  • Stocks And Commodities - The Deflationary Myth

    01/08/2015 9:23:42 PM PST · by blam · 15 replies
    TMO ^ | 1-8-2015 | Toby_Connor
    Toby Conner January 08, 2015 With commodities now moving down into their three year cycle low Iím hearing more and more talk about deflation. This is complete nonsense. Bernanke had it exactly right when he pointed out that any determined government could halt deflation at will with a printing press. As a matter of fact the only mildly deflationary event weíve seen since 1932 was a brief period during 2008 and early 2009. Bernanke succeeded in stopping it in its tracks almost immediately with QE1. In order to experience deflation there must be debt defaults. Thatís what happened in 2008....
  • ECONOMIST WARNS: Deflation Is Coming To The US

    01/08/2015 11:11:38 AM PST · by blam · 44 replies
    BI ^ | 1-8-2015 | Shane Ferro
    Shane FerroJanuary 8, 2015Deflation is coming. In a new note to clients, BNP Paribas's Laura Rosner writes that low oil prices could drag headline inflation in the US into negative territory in the first two quarters of 2015. Rosner writes: Under our new forecast, the quarterly y/y rate of headline inflation falls below zero in Q1 and Q2 2015 (-0.3% and -0.4%, respectively). We still expect the energy price shock to have only transitory effects (maximum impact in 2015) and limited pass through into core, though we will be re-evaluating that assumption over time. Our forecast assumes household and business...
  • DEFLATION IS HERE

    01/07/2015 5:55:13 AM PST · by blam · 31 replies
    BI ^ | 1-7-2015 | Mike Bird
    Mike Bird January 7, 2015 After a year of anticipation, deflation has finally arrived in Europe. Consumer prices dropped 0.2% in the year to December. The consensus was that inflation would drop to about zero or -0.1%. Inflation in Germany, Europe's healthiest large economy, is at just 0.1%. Spain has already recorded months of deflation, and its consumer prices fell 1.1% in December from the same time last year. With oil prices still tumbling, it's clear that falling consumer price inflation still has further to go. Nobody is disputing what pushed inflation over the zero mark. It's the decline in...
  • Deflation And The Year Ahead

    01/07/2015 5:24:51 AM PST · by blam · 5 replies
    TMO ^ | Clif_Droke
    Januarary 07, 2015 Clif_Droke Stocks were hit by selling pressure on Monday as the S&P 500 (SPX) declined 1.83% and the Dow 30 shed 1.86%. The energy sector bore the brunt of the selling with the NYSE Oil Index declining 4.61%. Crude oil prices also dropped nearly 5% for the day to close at 5 Ĺ-year lows. Fears that Greece may exit the euro zone are being blamed on the latest broad market decline. Upcoming elections in Greece have spooked many investors, who feel that the country's exit from the euro zone would be disastrous. The most likely reason for...
  • German inflation lowest since October 2009

    01/05/2015 3:13:02 PM PST · by Olog-hai · 1 replies
    TheLocal.de ^ | 05 Jan 2015 14:53 GMT+01:00 | (AFP)
    Inflation in Germany, Europeís biggest economy, slowed to just 0.2 percent in December, its lowest level in more than five years, and averaged 0.9 percent for the whole of 2014, according to new figures released on Monday. [Ö] Using the Harmonized Index of Consumer Prices (HICP)óthe yardstick used by the European Central Bankóinflation in Germany was even lower at 0.1 percent in December, way under the ECBís annual inflation target of just below 2.0 percent. The chronically low level of inflation across the single currency bloc has fueled concern the region could slip into deflationóa sustained and widespread drop in...
  • 2015: Why's the Oil Price Collapsing? Answer: $8+ Trillion Carry Trade

    01/03/2015 11:14:15 AM PST · by blam · 61 replies
    TMO ^ | 1-3-2015 | DK Matai
    By: DK_Matai Most in the media are utterly clueless about what's coming in 2015. It is incumbent upon ATCA 5000 to clarify the situation as we did prior to the start of The Great Reset and The Great Unwind during 2007-2008 based on our global intelligence gathering, detailed scenario planning and mathematical modelling of capital allocation and trans-national flows: 1. The price of oil has fallen by more than half from its recent peak in mid-2014 and continues to remain in relative free fall in 2015; 2. The US dollar, in which oil is denominated, is soaring against almost all...
  • Food Stamps, Subprime and Hyperinflation

    01/01/2015 1:58:06 PM PST · by blam · 28 replies
    The Daily Signal/Heritage Foundation;The Market Oracle.co.UK ^ | December 22, 2014 Daily Signal; January 1, 2015 | Alexandra Gourdikian ;Dr Jeff Lewis
    January 1, 2015 Dr_Jeff_Lewis The next generation will look back at the current period with utter astonishment. The archives will be riddled with debates and all manner of euphemisms for what led to the collapse of the worldís first and last fiat reserve currency. It is a process well underway. Take a look at two seemingly unrelated, though current, economic-financial trends: Food stamps and subprime. The case of spending compared with risk. Food assistance is but a tiny tributary broken off from a massive river of denial. Subprime represents the nadir of Ďrisk-oní fueled monetary euphoria. Spending that comes from...
  • Oil Is On 'An Incessant March Downwards'

    12/10/2014 5:06:02 AM PST · by blam · 57 replies
    BI - Reuters ^ | 12-10-2014 | Adam Rose
    Adam Rose, Reuters December 10, 2014 Brent crude remained above $66 barrel on Wednesday, after resuming its drift downward amid a glut of oil on the market, following a short-lived reprieve the previous day when a weaker dollar had provided some support to prices. Worries about oversupply have pushed Brent down 40% since June. "Notwithstanding day-to-day movements, the fundamental picture hasn't really changed, and that is one of supply outstripping demand growth for most of the year," said Phin Ziebell, a senior analyst at National Australia Bank. "It's an incessant march downwards, and it would be interesting to see where...
  • ECB paralyzed by split as irreversible deflation trap draws closer

    12/05/2014 6:07:09 PM PST · by Lorianne · 8 replies
    Telegraph (UK) ^ | Ambrose Evans Pritchard
    The European Central Bank has dashed hopes for quantitative easing this year and acknowledged for the first time that the institutionís elite board is split on plans for a Ä1 trillion liquidity blitz. Equity markets fell across southern Europe,with Italyís MIB off 2.77pc, led by sharp falls in bank stocks. Spainís IBEX dropped 2.35pc. The euro surged by more than 1pc to $1.2455 against the dollar in early trading as speculators rushed to cover short positions. Expectations for immediate stimulus had been riding high after the ECBís president, Mario Draghi, pledged action ďas fast as possibleĒ last month. The bank...
  • GOLD! (Exploding Higher $1219 Oz)

    12/01/2014 10:59:53 AM PST · by blam · 17 replies
    BI ^ | 12-1-2014 | Myles Udland
    Myles Udland December 1, 2014 Gold is exploding higher. In afternoon trade on Monday, gold futures were up better than 3.5% in the last 24 hours to around $1,215 an ounce, moving back above $1,200 for the first time in more than a week. The spike in gold reverses a plunge in gold late last week that was continued on Sunday night as the futures market re-opened after voters in Switzerland rejected a measure that would have required the Swiss National Bank to increase its gold holdings from 8% to 20%. Oil, which also got crushed last week, is also...
  • Gold Surges Over $50 Off Overnight Lows; Commodities Bouncing As Dollar Weakens

    12/01/2014 7:05:44 AM PST · by blam · 12 replies
    Zero Hedge ^ | 12-1-2014 | Tyler Durden
    Tyler Durden 12/01/2014After last night's big flush across commodities, they have rallied notably. Gold is now up over $50 from those lows, with Silver, copper, and even crude bouncing hard (after testing below $64 overnight). The USD is notably weaker, stocks lower, and bond yields testing mid-October flash-crash Bullard lows...(snip)
  • Deflation Is Going To Cause A Scary New Kind Of Debt Crisis

    12/01/2014 6:37:55 AM PST · by blam · 19 replies
    BI - Money Week ^ | 12-1-2014 | Merryn Somerset Webb
    Merryn Somerset WebbDecember 1, 2014 Russell Napier is a financial historian and the founder of ERIC, an online research firm that aims at connecting analysts and investors. Here he talks to Merryn Somerset Webb about the next deflationary bust Ė why itís coming, what it means for you, and how you can survive it. Merryn Somerset Webb: Letís start at the beginning. You are a firm believer, as I understand it, in the idea that we live in a deflationary environment and thereís almost nothing that central banks can do to change that. So, maybe talk a little bit about...
  • GOLD IS GETTING SMOKED ($1150 Oz)

    11/30/2014 5:02:41 PM PST · by blam · 100 replies
    BI ^ | 11-30-2014 | Myles Udland
    Myles Udland November 30, 2014 On Sunday night, gold was down more than 4% to as low as $1,143 an ounce after voters in Switzerland on Sunday rejected a measure that would have required the Swiss National Bank to increase its gold reserves from 8% to 20% of its holdings. The vote failed by a margin of 78%-22%. In addition the drop in gold, crude oil prices are resuming their tumble, and the price of other precious metals ó silver and platinum ó were also down sharply. Silver futures were down 12% early Sunday night and platinum futures were down...
  • OIL KEEPS PLUNGING ($66.15 Bl)

    11/29/2014 6:49:24 AM PST · by blam · 109 replies
    BI ^ | 11-29-2014 | Myles Udland
    Myles Udland November 28, 2014Oil is still falling. In afternoon trade on Friday, West Texas Intermediate crude prices in the US dropped more than 10% to settle at $66.15 a barrel, a more than $7.50 drop in just 24 hours. At one point on Friday, WTI futures briefly breached $66. Brent crude prices, which are the global benchmark, also cracked $70 a barrel on Friday. Earlier this week, WTI prices were at around $76 and Brent prices were near $80. (snip)(snip)
  • EUROPE'S PLUNGE INTO DEFLATION IS COMING

    11/28/2014 7:01:49 AM PST · by blam · 26 replies
    BI ^ | 11-28-2014 | Mike Bird
    Mike Bird November 28, 2014 Eurozone inflation figures just released put the rate at 0.3% in November, down from October's 0.4% and in line with estimates. With the recent impact of oil prices, that means deflation isn't just a possibility for the eurozone: markets are now suggesting it's the most likely outcome in a few months' time. Analysts had forecast that that the rate would come in at 0.3% again, though some suggested it could fall as low as 02% The ECB currently targets 2% inflation, but that target was last reached in the summer of 2012. These numbers increase...
  • Falling inflation a worry for Europe but also the world

    11/23/2014 6:55:14 PM PST · by Tolerance Sucks Rocks · 60 replies
    Reuters ^ | November 23, 2014 | Ross Finley
    (Reuters) - European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy. A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe. A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world's top oil exporters meets in Vienna on Friday.
  • What Are The Odds In 2015: Inflation Or Deflation?

    11/13/2014 12:04:54 PM PST · by blam · 11 replies
    TMO ^ | 11-13-2014 | TCE
    The Cultural Economist Nov 13, 2014 TCE ( The Cultural Economist) writes: Like other Central Banks, the U. S. Federal Reserve has ďprintedĒ copious quantities of money. Despite better GDP numbers and positive media commentary, much of the American economy continues to be lethargic. The Eurozone appears increasingly vulnerable to recession. Financial and geopolitical risks could derail economic growth. What are the long term trends that will shape the outcome? The Case for Inflation Oil As I have documented several times, the rate of inflation is sensitive to the price we pay for a barrel of oil. Political turmoil in...
  • ECB ready to pump Ä1 trillion into euro zone economy

    11/07/2014 3:51:45 PM PST · by TigerLikesRooster · 16 replies
    Irish Times ^ | Fri, Nov 7, 2014
    ECB ready to pump Ä1 trillion into euro zone economy Central bank ramps up efforts to rescue single currency bloc from deflation risk The European Central Bank is ready to inject up to Ä1 trillion of new liquidity into the euro zone economy as it ramps up efforts to rescue the single currency bloc from the risk of Japanese-style deflation, Mario Draghi confirmed yesterday. The ECB president also said the central bankís governing council was unanimous in its commitment to use further unconventional tools, including quantitative easing, should economic conditions deteriorate. He added that the central bank had stepped up...
  • Gold Price Falls, Stocks Record Highs As Japan Goes ĎWeimarí

    10/31/2014 5:52:01 PM PDT · by blam · 30 replies
    The Market Oracle ^ | 10-31-2014 | Gold Core
    Gold Core October 31, 2014 Stocks globally surged, while gold fell sharply today despite renewed hopes that the Bank of Japanís vastly increasing money printing will fill some of the gaps left by the apparent end of Federal Reserve bond buying. The BOJ decided to increase the pace at which it expands base money to a whopping 80 trillion yen ($726 billion) per year. Previously, the BOJ targeted an annual increase of 60 to 70 trillion yen. The BOJ sailed into deeper uncharted monetary territory with the announcement that they would triple annual purchases of exchange-traded funds (ETFs) and Japanese...
  • Japan's central bank shocks markets with more easing as inflation slows

    10/31/2014 6:39:04 AM PDT · by TigerLikesRooster · 1 replies
    Reuters ^ | Oct 31, 2014 | Leika Kihara and Tetsushi Kajimoto
    Japan's central bank shocks markets with more easing as inflation slows By Leika Kihara and Tetsushi Kajimoto TOKYO Fri Oct 31, 2014 10:47am GMT (Reuters) - The Bank of Japan shocked global financial markets on Friday by expanding its massive stimulus spending in a stark admission that economic growth and inflation have not picked up as much as expected after a sales tax hike in April. BOJ Governor Haruhiko Kuroda portrayed the board's tightly-split decision to buy more assets as a preemptive strike to keep policy on track, rather than an admission that his plan to reflate the long moribund-economy...
  • The dangers of deflation The pendulum swings to the pit

    10/23/2014 10:43:12 AM PDT · by expat_panama · 89 replies
    The Economist ^ | Oct 25th 2014 | [editors]
    [snip]The lowflation of being consistently below an already low target is bad in itself; the deflation it could easy lead to is even worse. There are several reasons. The belief that money made tomorrow will be worth less than money today stymies investment; the belief that goods bought tomorrow will be cheaper than goods bought today chokes consumption. Central bankers can no longer set real (that is, inflation-adjusted) interest rates low enough to restore demand. Wages, incomes and tax revenue all stall, undermining the ability of households, businesses and governments to pay their debtsódebts which, in real terms, will grow...
  • EU's triple whammy: Recession, deflation, and debt

    10/16/2014 7:34:02 AM PDT · by SeekAndFind · 5 replies
    American Thinker ^ | 10/16/2014 | Rick Moran
    Here we go again. Another sovereign debt crisis on the periphery of the EU is underway and many of the same factors that led to previous debt meltdowns are present. Germany is headed for a triple dip recession. Continent-wide deflation is nearly a reality. And many EU nations are smashing the debt limits demanded by treaty, thus threatening the Euro itself. All of this is impacting the percentage of debt in relation to GDP in several countries, making government bonds more expensive and debt servicing a nightmare. The Hill: Among Europe's most recent economic tremors has been the growing evidence...
  • Dam breaks in Europe as deflation fears wash over ECB rhetoric

    10/11/2014 4:43:05 PM PDT · by Chgogal · 39 replies
    The Telegraph (UK) ^ | October 10, 2014 | Ambrose Evans-Pritchard
    'We are reaching the end game in Europe. If they donít launch real QE soon, the consequences are too awful to contemplate,' warns RBS. A key gauge of deflation risk in Europe is flashing red, dropping to record lows on fears of fresh recession and lack of decisive action by the European Central Bank. The sudden lurch downwards came as Bank of America warned that Franceís debt ratio could rocket to 120pc of GDP within five years, unless the EU authorities take radical steps to reflate the regionís economy. Italyís debt could threaten 150pc even earlier. The 5-year/5-year forward swap...
  • ALBERT EDWARDS: A $1,000 For A Wicker Basket? Sell Everything And Run For Your Lives!

    10/09/2014 7:01:06 AM PDT · by blam · 15 replies
    BI ^ | 10-9-2014 | Myles Udland
    Myles UdlandOctober 9, 2014Uber-bear Albert Edwards, a strategist at Societe Generale, is out with a new note to clients about market tops and expensive baskets. Edwards highlights the following comment from this weekend's Financial Times that said the following: Sir: The next financial apocalypse is imminent. I know this to be true because the (FT Weekend) House and Home section is now assuming the epic proportions last seen before the great crash. Twenty four pages chock full of adverts for mansions and wicker tea trays for $1,000. Youíre all mad. Sell everything and run for your lives.(snip)
  • Will Gold Crash With The Dow... Or Soar?

    10/06/2014 8:01:10 PM PDT · by blam · 44 replies
    Zero Hedge ^ | 10-6-2014 | Tyler Durden
    Tyler Durden 10/06/2014 In 2008, we projected that the crash in the market was in fact a mini-crash and that the day would come when a more major crash would occur - one that reflected the level of debt. In recent months, this prognostication has been gaining traction - that a second, more severe crash is inevitable. There are two primary camps amongst economists with regard to the economic direction that a crash will generate: inflationists and deflationists. Inflationists tend to feel that the governments of the world that are now in debt over their heads will do what governments...
  • A New Interest Rates Record Is Set... And It Is Foreboding

    08/17/2014 9:08:33 PM PDT · by blam · 20 replies
    Market Oeracle ^ | 8-17-2014 | Daily Wealth
    August 17, 2014 DailyWealth Dr. Steve Sjuggerud writes: A new record was set in Germany yesterday... The interest rate on a 10-year government bond in Germany fell below 1%. This number is shocking... Interest rates have never been this low in German history. What does it mean? Why would people agree to lend money to a government for 10 years with almost no return on that money? What is the message that we should take from this? Aren't things supposed to be getting back to "normal"? And doesn't "normal" mean something like this: By 2020, the Federal Reserve has short-term...
  • Negative Nominal Interest Rates: Highway to a Cashless, Statist Hell

    06/26/2014 10:26:02 PM PDT · by GraceG · 13 replies
    Barnhardt.biz ^ | 06-26-2014 | Ann Barnhardt
    I warned about this in part two of my 2.5 hour Economics Video Presentation back in November of ARSH 2012, and, sure enough, it has now happened. Because, as I have been saying all along, for anyone who knows ANYTHING about ANYTHING having to do with economics, finance and/or banking, and who does not have their brain bucket completely and firmly inserted up their rectal vault, it is obvious what is happening and how the chain of events will unfold. If a mouthy broad with a mere bachelorís degree in animal husbandry from a land-grant university can see this stuff...
  • Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare"

    05/27/2014 6:18:45 AM PDT · by blam · 5 replies
    Zero Hedge ^ | 5-27-2014 | Tyler Durden
    Tyler Durden 05/26/2014 For the last several years, nobody has been more outspokenly bearish on Japan than Kyle Bass. In a recent talk, Bass reiterated his doubts about Japanís chances of averting a debt crisis. Whatís more, he also said Chinaís economy will fall below expectations. Bass changed one aspect of his outlook on Japan. Instead of predicting a collapse of the Japanese bond market, he focused on a severe weakening of the yen Ė without predicting when that might happen. His predictions for China were equally distressing. He said that its banks will be saddled with non-performing loans and...
  • Weapon of Last Resort: ECB Considers Possible Deflation Measures (European Central Bank)

    04/23/2014 7:01:40 PM PDT · by Olog-hai · 1 replies
    Der Spiegel ^ | April 23, 2014 Ė 06:18 PM | Christian Reiermann and Anne Seith
    One of European Central Bank President Mario Draghiís most important duties is watching his mouth. One ill-considered utterance is enough to sow panic on the financial markets. But during a press conference earlier this month, Draghi allowed himself a telling slip. Speaking to gathered journalists at the Spring Meetings of the International Monetary Fund and the World Bank, Draghi twice almost uttered a word he has been at pains to avoid. ďDeflaÖĒ, Draghi began, before stopping himself and continuing with the term ďlow inflation.ĒYet despite Draghiís efforts, the specter of deflation was omnipresent in Washington during the meetings. And it...
  • Deflating the Deflation Myth

    04/02/2014 3:55:29 PM PDT · by BfloGuy · 28 replies
    The Mises Institute ^ | 4/2/2014 | Chris Casey
    The fear of deflation serves as the theoretical justification of every inflationary action taken by the Federal Reserve and central banks around the world. It is why the Federal Reserve targets a price inflation rate of 2 percent, and not 0 percent. It is in large part why the Federal Reserve has more than quadrupled the money supply since August 2008. And it is, remarkably, a great myth, for there is nothing inherently dangerous or damaging about deflation. Deflation is feared not only by the followers of Milton Friedman (those from the so-called Monetarist or Chicago School of economics), but...
  • Harry Dent Video

    03/22/2014 11:05:18 AM PDT · by Arthur McGowan · 10 replies
    Harry Dent Video ^ | March 22, 2014 | Harry Dent
    Harry Dent predicts mild inflation, then massive deflation, then mild inflation.
  • Eurozone in Deflation; Monetarist Mouthpieces Will Scream

    03/01/2014 11:36:11 AM PST · by Kaslin · 12 replies
    Townhall.com ^ | March 1, 2014 | Mike Shedlock
    Forget all the talk about CPI or as they call it in Europe HIPC (harmonized index of consumer prices) floating just under 1%. The true measure of inflation is credit expansion. And for the second month, credit contracted in the Eurozone. Reuters reports Euro zone lending contraction compounds ECB headache. Lending to households and firms in the euro zone fell again in January and money supply growth remained subdued, adding to pressure on the European Central Bank to take action next week to support the economy. The ECB has cut interest rates to a record low, pumped extra liquidity into...
  • Deflation Theory Reality Check and the "Feel Good Effect"

    02/13/2014 10:11:48 AM PST · by Kaslin · 3 replies
    Townhall.com ^ | February 13, 2014 | Mike Shedlock
    If you repeat something completely inane enough times, do people, even economic writers, believe it?
  • A 'tsunami' of store closings expected to hit retail

    01/22/2014 1:59:17 PM PST · by EBH · 99 replies
    CNBC ^ | 1/22/2014 | Krystina Gustafson
    Get ready for the next era in retailóone that will be characterized by far fewer shops and smaller stores. On Tuesday, Sears said that it will shutter its flagship store in downtown Chicago in April. It's the latest of about 300 store closures in the U.S. that Sears has made since 2010. The news follows announcements earlier this month of multiple store closings from major department stores J.C. Penney and Macy's. Further signs of cuts in the industry came Wednesday, when Target said that it will eliminate 475 jobs worldwide, including some at its Minnesota headquarters, and not fill 700...
  • Coming 'oil glut' may push global economy into deflation

    01/18/2014 10:12:50 AM PST · by Kennard · 63 replies
    The Telegraph (UK) ^ | 8:52PM GMT 15 Jan 2014 | Ambrose Evans-Pritchard
    One piece of the jigsaw puzzle is missing to complete the deflation landscape across the West: a slide in oil prices. This is becoming more likely each month. Turmoil across the Middle East and parts of Africa has choked supply over the past two years, keeping Brent crude near $110 a barrel despite a broader commodity slump. Cotton and corn prices have halved, as has the UBS index of industrial metals. Such anomalies rarely last. "We estimate that crude oil is now the mostly richly priced commodity in the world," says Deutsche Bank in a fresh report. Michael Lewis, the...
  • Goldís Real Problem: Deflation

    12/26/2013 6:31:56 AM PST · by SeekAndFind · 13 replies
    Barrons ^ | 12/26/2013 | Brendan Conway
    Forget the Federal Reserve ‚ÄĒ the real threat to gold‚Äôs price is deflation.That‚Äôs the argument over at Societe Generale this morning. No, not runaway, Depression-style deflation ‚ÄĒ but rather the threat of a stubborn resilience in the value of major currencies, which would be a clear negative for an ‚Äúalternative currency‚ÄĚ like gold. It would happen on account of investors‚Äô unwillingness to behave like they usually do in economic normalcy. It would also happen as a result of stocks‚Äô surging prices. At minimum, a lack of inflationary pressure of the sort investors are seeing lately, and may well see...
  • Fed could set off year-end fireworks

    12/17/2013 4:26:01 AM PST · by Lucky9teen · 16 replies
    Reuters ^ | Sun Dec 15, 2013 2:09pm EST | By Jonathan Spicer
    (Reuters) - The possibility that the Federal Reserve could finally start to trim its extraordinary stimulus for the economy could make this week an explosive one for financial markets. Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later. If it acts it may reflect as much a growth in confidence in the global economy, for whom the withdrawal of the flow of cheap dollars will be a shock, as...
  • Deceleration Nation: Declining Real Income, Homeownership, Labor Force Participation And Velocity

    12/02/2013 5:08:38 PM PST · by whitedog57 · 10 replies
    Confounded Interest ^ | 12/02/2013 | Anthony B. Sanders
    Several economic indicators for the US show deceleration. Yet the stock market and house prices continue to grow. Here is a chart of three economic indicators with clear downward momentum: civilian labor force participation (blue), the US homeownership rate (red) and real median household income (green). homessss And Goldman Sachs just downgraded Q4 2013 real GDP growth to 1.3%. These downward indicators compliment the declining M1 Money Multiplier and M2 Money Velocity. m1m2vel120213 Why? There are enormous excess reserves in the Fed system that arenít leaking out to Main Street. And The Fedís Balance sheet has exploded! (in terms of...
  • Bernanke Wants 2% Inflation in a Deflationary World (Long article)

    09/20/2013 9:55:10 AM PDT · by Kaslin · 9 replies
    Townhall.com ^ | September 20, 2013 | Mike Shedlock
    Steen Jakobsen, Chief economist at Saxo Bank in Denmark, pinged me today with his thoughts on "the morning after" and "price discovery". In my opinion these two paragraphs of the FOMC Statement are the key ones: The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic...
  • The Bernanke Fed Is Playing With Deflationary Fire

    06/26/2013 8:42:19 AM PDT · by blam · 18 replies
    The Telegraph (UK) ^ | 6-26-2013 | Ambrose Evans-Pritchard
    The Bernanke Fed Is Playing With Deflationary Fire By Ambrose Evans-Pritchard June 24th, 2013 I hope the Fed knows what it is doing. It has chosen to tighten monetary policy even though core PCE inflation is actually lower right now than it was when the Fed previously thought it dangerous enough to launch further QE. America is one shock away from a slide into outright deflation, and the eurozone is half a shock away. Anyone who still thinks the Fed has not just tightened significantly Ė or that markets have overreacted Ė should read this lament by St Louis Fed...
  • Ben Bernanke Has Burst The 'Euphoria' Bubble

    06/26/2013 8:14:28 AM PDT · by blam · 6 replies
    Business Insider ^ | 6-26-2013 | Walter Kurtz, Sober Look
    Ben Bernanke Has Burst The 'Euphoria' Bubble Walter Kurtz, Sober LookJune 26,2013Credit Suisse Risk Appetite Index Sober Look Ôāě The last time we discussed the Credit Suisse Global Risk Appetite Index, it was headed for "euphoria" (see this post from May 21). Around May 22 something changed, and it was all downhill from there. It was Bernanke's first hawkish statement. May 22; Bernanke: - We¬íre trying to make an assessment of whether or not we have seen real and sustainable progress in the labor market outlook. If we see continued improvement and we have confidence that that is going to...
  • A Whole New Group Of People Is Going To Start Worrying About The Gold Crash

    06/26/2013 7:56:28 AM PDT · by blam · 30 replies
    Business Insider ^ | 6-26-2013 | Joe Weisenthal
    A Whole New Group Of People Is Going To Start Worrying About The Gold Crash Jow WeisenthalJune 26, 2013, 5:26 AMBack in the day, a few years ago, when gold was soaring, anti-Fed types saw this as indication that Bernanke was blowing bubbles and creating hyperinflation. Of course, the price of gold is just the price of gold, but it didn't stop people from making bold statements about how gold was "voting" against Fed policy so to speak. Well now gold is totally crashing. At the start of April it was near $1600/oz. This morning it's not much above $1200/oz....