Meaningful ‘Deflation’ now Emerging globally!
The evidence is growing, ‘deflation’ has taken hold and our QE policymakers are losing! AP Moller-Maersk, the world’s largest container-shipping group reveals the slowdown in global trade. Maersk is laying off some 12,000 employees as profits wane. A perfect storm has formed for Maersk, says Roger Elliott, analyst for Citi, adding that there will be no rapid rebound. The other evidence for serious emerging ‘deflation’ is the reality that the $6.5 trillion Sovereign Wealth Funds (for the oil-dependent economies). These funds are now selling Treasuries so as to balance their outflow of funds. This trend of emerging ‘deflation’ will grow in the coming weeks and months.
Maersk stock shares decline as investors recognize the trend!
This index reveals a decline in aggregate demand and this will lead to ‘deflation’ going forward!
We also witness China lowering interest rates and deposit rates to counter this trend of emerging ‘deflation’. Will our Federal Open Market Committee actually raise their core Fed Funds Rate tomorrow with this evidence as the background? I don’t think so! The trend is now towards ‘negative’ interest rates to counter the lack of ‘inflation’ in our global economies. Inflation is what our esteemed Central Planners desire for our markets, but with debt at historical levels and with consumer demand decreasing, I don’t think we will witness any rate increases going forward. The markets are ‘deflating’ and recognizing the our DEBT situation is impossible to resolve!
China needs more exports to keep growing! Exports are slowing and this means less Aggregate Demand globally! China is now lowering interest rates to (hopefully) reverse this trend!
Global debt is getting more difficult to service and liquidity for new ventures will wane as global DEMAND continues to wane. Keynesian economics is based upon a growing Aggregate Demand and a growing rate of Inflation over time. Think of the ‘time value of money’ to discern the assumptions underlying Keynesian economics. Cash flows must increase so that the discounted ‘value’ of these flows can increase over time. Deflation destroys the core prerequisites of the Keynesian model. Values decrease rather than increase! Debt is exposed rather than covered! Demand wanes as consumers cut back on purchases. All these trends are Anathema to our Keynesian Central Planners and their desires! Hurrah for the coming ‘deflation’! Maybe the Keynesian model of economics will finally collapse in the next few years!
Spending, borrowing, and Debt is what our Keynesian model is all about! 1934 to 2015!
Will the U.S. Debt Ceiling be increased? It must if our esteemed Congress wants our dysfunctional government to continue. Any effort to stop the increase would mean a complete collapse of government programs and our entitlement society. Debt and deficits must continue until the global economy collapses! Keynesian economics is based upon more DEBT, more CREDIT, more DEMAND, and more INFLATION. Keynesian economics is a One-Way Street…which our Central Planners fully understand! The next big discussion in a few months may be the Nuclear Option! What is this? This is the Bernanke Helicopter Drop! Cyber money is created ‘out-of-nothing’ (typing currency ‘numbers’ into everyone’s on-line account) and letting the consumer SPEND until they drop!
Hoover’s mindset prior to the Great Depression and the Reset by FDR!
Herbert Hoover’s philosophy (a chicken in every pot and a car in every garage) lasted until the FDR depression/reset in 1933-34! Herbert said: Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves.
As Herbert Hoover said in 1928, A chicken in every pot and a car in every garage – Herbert Hoover. Economics is about accumulating ‘things’ and material ‘wealth’. So let the consumers increase Aggregate Demand with a Helicopter Drop of funds for everyone! This is now possible (as our money is ‘imaginary’) and its called the NUCLEAR OPTION! The stupidity of our Central Financial Planners at our Central Banks may create this option down the road. Our current System is in Collapse Mode and there are no viable options except for everyone to SPEND, BORROW, BUY, ACCUMULATE, AND FILL UP THE GARAGE! The next few years should be interesting! Enjoy! I am: https://kingdomecon.wordpress.com.
P.S. Those who desire to make a statement about our Unconstitutional Money and our Unconstitutional Central Bank can do so by doing the following:
You can go to: http://www.jmbullion.com and order at the current suppressed prices. Let our Central Planners know that their ‘Mark of the Beast’ money is not for you! Digital/Cyber money is not Constitutional and not part of Article I, Section 8 and 10 of the U.S. Constitution. Now is the time to accumulate a ‘store of value’ in silver coins and also gold coins. Our corrupt Central Planners, under the Plunge Protection Team group, are currently suppressing silver/gold prices to try to entice Americans to accept the ‘Mark of the Beast’ currency which they create ‘out-of-nothing’ and type into the computer screen. Don’t buy into this End Time System which I call the ‘Mark of the Beast’ System. Buy Silver and Gold, our Constitutional Money! Do this NOW!