Friday, August 27, 2010

Serious Inflation To Arrive: U.S. Is Worse Than Japan

The U.S. turning Japanese is now becoming widely accepted. Certainly, it seems to be behind Treasury bond pricing, even if it isn’t quite a consensus view among equity investors. With ever more indicators pointing to a relapse of the U.S.’s recession and the growing risk of deflation–Mohamed El-Erian at the bond fund Pimco gives it a 25% probability.
As for doubters, who argue the U.S.’s circumstances can’t be compared with Japan’s, Edwards says: “they are right.” Right, that is, because “things now in the U.S. are much, much worse than Japan a decade ago” which is to say a decade after the start of Japan’s bust.
Which is maybe why Edwards figures the end game will play out more quickly in the U.S. than in Japan. He sees the U.S. market bottoming out over the next year or so, rather than after yet another decade.
But maybe that’s just impatience talking. Edwards admits he’s getting tired of being bearish. His old companion in arms, James Montier, now at the buy side firm GMO, turned positive on shares last year and continues to find value, particularly in European markets.
More worrying for Edwards, though, is the risk that the deflationary bout he expects to trigger the final bust won’t happen, or won’t last long. That, instead, the U.S. economy will flip from low and declining inflation to a sudden bout of serious inflation, prompted by the Federal Reserve, which the central bank will then be unwilling to control.
That’s a particular worry because central bankers are confident to the point of hubris that they know how to control inflation when it finally springs up. Remember, they’d also allowed bubbles to form because, similarly, they “knew” how to react once they’d burst.
More Here..

Its Official: China is Unloading its Treasury Bonds
More Here..


  1. Remember, spend it all now. The price goes up tomorrow.

  2. Buy silver, prices have been zooming lately!

  3. israel is preparing to attack iran by ordering massive amount of jet fuel, unleaded gasoline and diesel fuel from america. i wonder that $2 billions worth of fuel will be given free in a form of aid? here is the link:

    china dumping treasuries is nothing. we are going to war. world war 3, hear we come.

  4. Oh I'm ready, I am ready...

    I went south to the Chicano Clan with my brown cavalier as we asked for help. To the north we got the Nascar Tribe to pledge aide. We headed west to gather Vampires, and from the East the Pokemon Hunters made their oath.

    When the time comes we will be ready as we run into our homes to hide under our beds.

  5. Looking at the graphs in the article, it doesn't look like anything to be alarmed about....yet.

  6. This website is taking WAAAYY tooo long to download. All those offsite external ads and images have really slowed it down lately. It used to download faster. Something definitely wrong lately.

  7. 637 they are getting ready for a false flag on the internet so they can close it down, that is what is wrong lately, after ww3 starts the only news you will get is fake tv news, the internet will be blocked so we dont know what is really happening.

  8. The two articles above show two sides of the same coin .
    America in economic crises death spiral .
    Debt Peons standing in line begging for debt relief .
    And a China no longer willing to provide the old levels of vendor finance either in treasury or Fannie and Freddie government guaranteed bonds investments..
    Who would want to invest in that paper as the US simply prints it by the ton ?
    The US dollar value ,is the most criminally manipulated currency value in the world.
    There is no need to deliberately “orchestrate” the fall of the US.
    The Dollar Hegemony Ponzi economy is dead already .
    America is now a bankrupt insolvent has been.
    As the high waged Labor aristocracy was incapable of delivering capital a real profit in ‘free trade” competition with productive cheap labor third world .
    Industrial capital long since moved on to seek maximum profits in countries like China.
    The Multinationals invested in Chinese manufacturing and promised the Chinese jobs and a cut in the profits from arranging ‘free trade” access to the American markets they owned through patriotic companies like Wall Mart.
    With access to two markets , the internal Chinese and the American markets development of industry surged in China . China is now the biggest most productive industrial power in the world . America has a subsidized military industrial complex that creates no profits it just runs cost/plus government contract and wastes value as government revenues get blown up in wars.
    With no profits to be got from industry in America now , American finance capital turned predatory , seeking its profit sources from rent and usury debt plunder in credit supply for the retail trade shopping mall economy. That was the only source of profit left in de-industrialized America.All America had was an inflation creating $ printing press.
    So, finance capital frauds kept the US game going for a while , by creating financial bubbles of fictionally valued property and illusions of real returns from ‘strong dollar” investments in US treasuries and US mortgages.
    Mountains of accumulated profits have been re-invested in America way beyond the limits of getting an increased value average profit return, until even the interest /dividends on the Ponzi scheme could no longer be paid by Americans .Their credit supply for public and private debt servicing had been maxed out .As , they could not afford to continue to buy the old level of imported commodities, even after the Chinese invested billions in vendor finance .
    When credit began to be withdrawn the US banksters panicked and organized a financial coup to socialize their losses by printing money for handouts.
    Americans began to lose jobs and cut consumption on credit .
    China then suffered from overproduction in its export sector and millions of Chinese workers were laid off too.
    The Chinese government has accumulated financial reserves ,so it can spend while the American government ,business and people only have huge accumulated debts .
    To finance economic stimulus the US can only print more paper devaluing its paper.
    So, Keynesian Economic Stimulation in in China worked a bit better, because China actually has a manufacturing industrial base. And real saved money value could be injected into its economy.
    While fake Keynesian stimulus in a US services based economy creates no new industrially produced wealth and many everyday commodities used by Americans still have to be imported and so America gets “another day older and deeper in debt” for its wasteful consumer lifestyles..

    Now there is only the remaining process of the administration in partnership with the banksters for looting the remaining assets of the Debt Peons .Trying to collect payments for the mortgage debts ,credit card, student loan and other debt payments from the Debt Peons of America. Before the economy completely implodes..

  9. "Property values always go up because it is a finite commodity."
    Have faith.
    The Jappanese are still hanging in there 20 years after their property and share bubbles burst.
    They survived deflation and money printing stimulation because they still had a wealth creating industial industry and by working a bit harder to sell there goods i other countries markets.
    Although as the national debt still rises it now all looks like again imploding like the US will.
    They jappanese are getting old now and are cashing in their savings to live.They do not even have "Hispanic labor to exploit in their factories .(only a few Japanese -brazilians .
    The americans have not been savers and are big consumers of credit including credit from the Jappanese.
    As deflation of property values is now happening big time in the US the Americans face different problems than the Jappanese.
    For a start they have been de-industrialised and only have an unproductive services based economy of consumers .
    They on average have little savings and their retirement funds invested in property and shares are fast losing value.
    The US government already weighed down by the cost of past deficits for wars will not be of much help because its 'keynesian" spending is not even spent on building infrastucture like the dams and roads built in the last depression ,but is simply directed to socialisng the past losses of the finance sector.
    So recovery of property values in the US will not happen quickly , even in two decades the jappanese have waited so far.
    Still property values must always rise right?

    Hang in there Debt Peons.
    Your turning Jappanese I really think so!
    But, the cheif wankers claim a printing press recovery is on track ,it will surely only take a few decades of debt payments.


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