Posts Tagged ‘currency depreciation’

Global Deflation: Unavoidable

Global Deflation: Unavoidable

global deflationCourtesy of the Financial Ninja, Ben

FN: Nobody seems to care, but it really is all about deflation. Deflation first, inflation later. That is how this mess will play out. There is no other way, despite Ben "Helicopter" Bernanke’s best efforts to inspire inflation and skip the whole deflation part. The Master Plan really is to inflate, but the math simply doesn’t add up.

What kind of "urgent action" can be taken to "reduce high levels of excess capacity"? No amount of additional debt will put that idle capacity to work. Other than taking dynamite to idle factories, the only other "effective" measure would be to start a war. Wars have the added benefit of putting the unemployed to work even as infrastructure is blown up.

World Bank warns of deflation spiral: "The World Bank has given warning that global economy will fall into a "deflationary spiral" unless urgent action is taken to reduce high levels of excess capacity in industry.

Justin Lin, the bank’s chief economist, said factories running idle around world threaten to trap economies in a vicious cycle, risking further spasms of financial stress, requiring yet more rescue packages.

"Significant excess capacity has been built up and unless this issue is addressed, we will face a deflationary spiral and the crisis will become protracted," he told an audience in Cape Town.

Mr Lin said capacity use had fallen to 72pc in Germany, 69pc in the US, 65pc in Japan, and as low as 50pc in some developing countries, mostly touching lows not seen in modern times.

The traditional cure for countries caught in slumps is to claw their way back to health through devaluation, but this cannot be done today because the crisis is global. "No country can count on currency depreciation and exports as a way out of recession. Unless we deal with excess capacity, it will wreak havoc on all countries. There is urgent need for global, co-ordinated fiscal stimulus," he said.

Investments should be focused on infrastructure in poor countries that are bearing the brunt of the crisis. The downturn is already likely to trap over 50m more people in extreme poverty this year.

Mr Lin said some $30 trillion has been wiped off global stock markets and a further $4 trillion off US house prices, creating powerful deflationary headwinds. While emergency


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Zero Hedge

How To Spend $45,000 On A $27,000 Car

Courtesy of ZeroHedge View original post here.

Authored by Mike Shedlock via MishTalk,

As cars become more expensive, and trade-ins worth less and less, buyers go deeper in debt on new cars.

Please consider taking a $45,000 Loan for a $27,000 Ride.

...

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Phil's Favorites

Peace advocates have long been found among veterans who fought in America's wars

 

Peace advocates have long been found among veterans who fought in America's wars

Veterans for Peace gather for a Veterans Day ceremony at the Minnesota State Capitol mall, Nov. 11, 2014, in St. Paul. AP/Jim Mone

Courtesy of Michael Messner, University of Southern California – Dornsife College of Letters, Arts and Sciences

If President Donald Trump had gotten his way, the nation would have celebrated the centennial of the World War I armistice last year on Nov. 11 with ...



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Insider Scoop

These Analysts Love BellRing Brands

Courtesy of Benzinga

BellRing Brands Inc (NYSE: BRBR) is a nutrition products company known for its ready-to-drink protein shakes and was born out of the separation of Post Holdings Inc (NYSE: POST)....



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The Technical Traders

Welcome to the Zombie-land Of Investing - Part I

Courtesy of Technical Traders

This current market environment is very reminiscent of the 2006-08 market environment where price rotated into weakness on technicals and continued to establish new all-time price highs in the process – creating what we are calling a “zombie-land melt-up”.  This very dangerous price action is indicative of money chasing a falling trend.  Where technicals and fundamentals are suggesting that price is actually weakening quite substantial, yet the process of price exploration is continually biased towards the upside as investors continue to pile onto the back of the beast expecting a further melt-up.

Let’s take a look at what happened to the ES and Gold in 2006 an...



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Kimble Charting Solutions

Gold Indicator Sending Fresh Bearish Message, Says Joe Friday!

Courtesy of Chris Kimble

Could the Gold/US Dollar ratio be sending a fresh concerning message to Gold bulls this week? Joe Friday says Yes!

This chart looks at the Gold/Dollar ratio over the past 8-years.

The intersection of two long-term channel met at (1) a few months ago. The ratio was testing the bottom of one as resistance and the top of another as resistance at the same time.

As the ratio was testing both channels as resistance, a sizeable bearish reversal pattern took place at (1).

Since the reversal pattern took place, the ratio has been heading lower.

Joe Friday Just The Facts Ma’am; The ratio is breaking below...



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Digital Currencies

3 Reasons Why One Trader Didn't "Manipulate" Bitcoin Price To $20K

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin price highs in 2017 were not the result of a single trader on an exchange, the CEO of payment company Circle claims. In a series of tweets on Nov. 4, Jeremy Allaire disputed ...



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Chart School

Gold Gann and Cycle Review

Courtesy of Read the Ticker

Gold has performed well, golden skies are here again. In fact it has been a straight line move, and this is typically unusual and a pause can be expected.

It seems the markets are happy again, new highs in the SP500, US 10 year interest rates look to re bound, negative interest may soften. The US FED has reversed their QT and now doing $250BN (not QE) repo. The main point is the FED has stopped QT, and will do QE forever. The evidence now is the FED put is under market risk and the possibility of excessive losses do not exist. 

Point: If in future if there is market risk, the FED will print it's way out of it.
Subject To: In this blog view. The above is so until the amount required rocks confidence in the US dollar as a reserve currency.&n...



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Lee's Free Thinking

Today's Fed POMO TOMO FOMC Alphabet Soup Unspin

Courtesy of Lee Adler

But make no mistake, if the Fed wants money rates to stay down by another quarter, it will need to imagineer even more money.

That’s on top of the $281 billion it has already imagineered into existence since addressing its “one-off” repo market emergency on September 17. This came via  “Temporary” Repo Man Operations money, and $70.6 billion in Permanent Open Market Operations (POMO) money.

By my calculations that averages out to $7.4 billion per business day. That works out to a monthly pace of $155 billion or so.

If they keep this up, it will be more than enough to absorb every penny of new Treasury supply. That supply had caused the system to run out of money in mid September.  This flood of paper had been inundati...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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