The thing economists said was nearly impossible actually happened last week. Yields on 2-year US debt hit a record low just as the Treasury prepares for another record-setting deficit. The supply of Treasury debt and the demand for it hit new highs – together. Stranger things have happened.
August 2nd, 2010 | Bill Bonner | 0 comments | ContinuedAll Posts Tagged With: "inflation"
Trader Vic Explains Hyperinflation
Hmm. If everyone, including the RBA, is so sure that a hyperinflationary depression is not likely, then what is legendary trader Victor Sperandeo doing saying the exact opposite? If you don’t have time to watch the four minute segment on CNBC, his point is simple: long-term structural deficits in the US make it nearly inevitable that bond investors will cease funding US deficits and yields will rise, forcing debt monetisation by the Fed.
July 30th, 2010 | Dan Denning | 38 comments | Continued
The Many Faces of an Economic Correction
Wall Street is still in bull mode. Can you make money by joining it? Maybe. Is it worth it? Probably not.If you do decide to play the game…just be sure you remember what game you’re playing. This is a Great Correction. Over time, prices are going to work their way down until the Dow has dropped below its March 2009 low.
July 30th, 2010 | Bill Bonner | 0 comments | Continued
Hooray for the Economic Recovery!…of 2016
Each new government initiative – the latest being financial reform – that doesn’t decisively address the debt, but rather tightens the government’s around private enterprise, only serves to delay or prevent economic revival. And so each new day will bring more distress and bankruptcy to homeowners, businesses, and banks.
July 29th, 2010 | David Galland | 8 comments | Continued
The Crisis Is Over
“The current outstanding balance of overall federal support for the nation’s financial system… has actually increased more than 23% over the past year,” wrote TARP inspector general Neil Barofsky this week, “from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program…
July 24th, 2010 | Nickolai Hubble | 0 comments | Continued
Will the Real Inflation Rate Please Stand Up
In China – now the world’s largest energy consumer according to the International Energy Agency – most of the power comes from coal (about 65%). The rest comes from a combination of renewables, geothermal, nuclear, gas, oil and hyrdo electricity. When you’re the world’s largest consumer of energy, every little bit helps. But how about a look in pictures to literally change your perspective? The chart below shows the world in terms of nuclear energy generated for domestic electricity consumption…
July 21st, 2010 | The Daily Reckoning | 15 comments | Continued
A Look Back at the Future of America
Wall Street suffered its first reversal in eight days yesterday. The Dow dropped a modest 7 points. For its part, gold rose $1.30 and the dollar fell. More importantly, the latest news is that inflation rates continue to fall. Producer prices went down 0.8% in the last two months – and the rate of decline is accelerating. It won’t be long before the US is in outright deflation – just like Japan.
July 19th, 2010 | Bill Bonner | 1 comment | Continued
Stagnant Stock Prices Still Have Lower to Go
Stocks have gone nowhere in 12 years. But it’s not ‘nowhere’ that they need to go. They need to go down. They need to complete their historic rendezvous with the bottom.Currently, the S&P trades at about 17 times earnings. You buy a share for a dollar. You get a company earning about 5 cents a year per share.
July 16th, 2010 | Bill Bonner | 1 comment | Continued
The ‘flations
Why would gold go down so much? Because people are finally realizing that deflation is the real risk, not inflation. Gold could continue to slip and slide for a long time now… It’s hard to say. It can rise in a deflation. But it depends on how volatile and uncertain the markets appear. In a stable, Japanese-style slump, gold could go down and stay down for many years.
July 5th, 2010 | Bill Bonner | 3 comments | Continued
The End of the Nominal Recovery
In other words, one year after the official end of the recession, the economy shows no signs of booming. Emergency Keynesian policy measures taken to keep the debt crisis from devolving into a 1930s deflationary spiral show signs of losing effectiveness, and the self reinforcing economic growth story is giving way to talk of a “double dip” recession, as trouble in Europe
July 2nd, 2010 | Eric Janszen | 11 comments | Continued
Zombies Always Vote
Last month’s sales fell from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month.
June 24th, 2010 | Bill Bonner | 0 comments | Continued
Producers and Parasites
We just had the biggest financial crack-up of all time. Even under ideal conditions, it will take people a long time to rebuild lost savings…to get rid of houses they can’t afford…and to restructure debt they can’t pay. While this restructuring and adjustment is going on, you’d expect the markets to be a little punky.
June 21st, 2010 | Bill Bonner | 4 comments | Continued
Taming the Vigilant
Free markets! It’s a government institution – the U.S. Federal Reserve – that is providing the liquidity, via low interest rates and outright buying of government securities, to keep bond yields low. That’s the opposite of free markets.
June 21st, 2010 | Nickolai Hubble | 1 comment | Continued
Europe, Greece and a French Blonde
We see it coming too. We’ve already seen what happens when a small country runs up too much debt. Investors get worried. Interest rates rise. The country can no longer borrow to cover its deficits…or to pay its past loans. Disaster.
May 14th, 2010 | Bill Bonner | 0 comments | Continued
Bailout Shmailout
One day the world is convinced that the central bankers and financial meddlers of Europe have the secret to success. The next day, they change their minds. Turns out, the euro feds don’t seem to have the problem solved after all. The euro is going down again.
May 13th, 2010 | Bill Bonner | 0 comments | Continued
