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Why Spanish Economy Needs to Return to 2000 Wages and Prices

This is another way of reporting on the flaw in world financial systems. When money is created out of thin air because there is 'demand' for it, people treat that money as if it was real (represented value). But it doesn't. So when the house of cards collapses, someone has to pay for that assumption. That is the person left holding the bag. In the article above, the debt.

Adjusting wages and prices can't fix this, there is a real loss. It is much clearer if looked at from the perspective of money as energy / thermodynamics. It is obvious then why there has been a collapse.

In the US, Goldman-Sachs seem to understand this dynamic. So they got out of the markets they created that were ready to fail and left others holding the bag. From a certain perspective, this looks much like fraud, and from another perspective, savvy investing.

Cutting all wages and leaving prices the same is a solution that makes everyone pay for the excesses of the few. Cutting both wages and prices does nothing, and cutting prices in fact is impossible because they are determined externally, by the world market.

The central banks have decided to take the course of cutting all wages. They have decided to do it under the table by inflating all currencies in unison, so that nominal wages don't decline, but actual purchasing power does. Note that, because of the way financial systems are designed, this solution rewards the financial institutions that destroyed the system. What a world!

I haven't yet decided if the political class are complicit in this or are just ignorant.

Asset Class Correlations

In the third chart, the vertical column of correlations for 10-yr is marked as slightly less correlation in the column, but largely less correlation in the row with the same numbers. The inverse is true of the yen, the column disagrees with the row, though for increased correlation.

The numbers are the same, so I guess this is just coloring error.