==Where?
The signs of economic contraction are all over the place...that includes production. Wake up and smell the coffee, Toddster.
Your source, Antal E. Fekete, as I've already shown, is an idiot.
The Institute for Science and Applied Mathematics (IISAM) fosters cross-disciplinary research and educational outreach in science and applied mathematics.
That's some fancy website they have there. Must have cost them $10 or $15 to create.
Conventional wisdom goes on to conclude that Bernanke, hopelessly committed as he is to a regime of low interest rates, will be fired.
Conventional wisdom among goldbugs?
The replay of history in 2007 will be similar except with the opposite signature. Interest rates are still declining, and so are prices adjusted for inflation. Deflation is being imported into the United States from Japan, through the mechanism of the carry-trade. It appears to confirm and surpass Bernanke’s worst fears.
Fekete thinks deflation is coming, but he criticizes Bernanke for being committed (hopelessly) to a regime of low interest rates.
Production keeps contracting
Where?
We may even see, horribile dictu, some genuinely falling prices! Yet these events could be just a smoke-screen camouflaging an incipient hyper-inflation that would wipe out the dollar for once and all.
Huh? Deflation or hyper-inflation or both? What a joker!
I admit that China is in the position to render these predictions worthless.
Predictions? I thought they were guarantees, by the Professor from the Intermountain Institute for Science and Applied Mathematics.
The dollar would get a new lease on life.
Before the deflation and hyper-inflation or after the deflation and hyper-inflation?
This is not to suggest that China is not in an incredibly strong bargaining position. She is. Even after a complete collapse of the dollar that could cost China up to $1 trillion, her economy could emerge relatively unscathed
Right, as long as they don't have to export anything.
You say that China cannot insulate herself from a world-wide depression? Oh yes, she can. By allowing the wage level to creep up, she could keep producing for her domestic markets without any major setback. China has the potential to absorb everything what she can produce domestically.
And they'll pay for the raw materials they need with what, exactly?
I think most commentators on the bond market got it wrong.
He's projecting again.
They take it for granted that any new bonds issued by the U.S. Treasury will be received negatively from now on, in view of the fact that the saturation point for dollars at large, in their opinion, has now been reached.
As shown by the 10 year bond yielding below 4.6%.
The only thing foreigners consider worse than owning dollar balances is owning dollar bonds: promises to pay dollars in the future.
Foreigner hate bonds. That must be why they keep buying them.
What then is the explanation of the mystery? It is the $400 quadrillion derivatives market growing exponentially. That’s what.
LOL!
The carry trade sells the high-priced Japanese bonds and buys the low-priced U.S. bonds. As I have pointed out, it is the mechanism whereby deflation is imported from Japan to the United States. This arbitrage results in a narrowing of the interest-rate spread.
I remember, the arbitrage that results in capital gains in the triple digits. That I debunked here .
Bernanke will keep stoking its fires by printing more dollars, hoping that the new money will go into commodity speculation, ending the depression. It won’t. The new money will go into bond speculation, deepening the depression.
That's the funny thing about newly created money, even if it buys bonds, the bond seller now has the new money. It's obvious, by this statement alone, that "Professor Fekete" doesn't know anything about how the money supply works.
That’s where smart money is made. In the bond market. On the long side. This is what makes the depression feed upon itself.
Yeah, because low interest rates cause a depression.
In 1979 the United States was in a much stronger financial and economic position than it is now
Yeah, nothing like massive inflation and high unemployment to prove we were stronger in 1979.
Goldbug rule: If you can't find an expert to support your pitch, make one up.
==Where?
The signs of economic contraction are all over the place...that includes production. Wake up and smell the coffee, Toddster.
bttt