DiggerUK

Wall Street Breakfast: Must-Know News

Shooting yourself in one foot is bad enough, but doing it with a JFK magic bullet that punctures both feet at once, is a skill unworthy of praise.

The A$ has risen on the back of the carry trade winging it's way to the outback at a rate of knots. It's QE by the back door, nothing to do with a recovering economy.

And how exactly are they going to get rid of this carry trade, without harming the currency, by lowering rates, especially if they have to raise rates to dampen any future inflation, due to the stimulus packages that have been introduced.

V-Shaped Revenue Recovery + L-Shaped CapEx Growth = Unstable Economy

In a board room somewhere, there will be a slick presentation, that shows if they reduce staff costs to zero, they can make more profit next fiscal year.

Reminds me of those nature documentaries were animals eat their young.

Does the IMF Warning Indicate a Repeat of 1930s Banking Crises?

On Apr 22 12:44 PM dcb wrote:

> What do you do when all the countries are racing to the bottom?

Stay beyond the minimum safe distance from the finishing line ?
Just a wild guess.

Does the IMF Warning Indicate a Repeat of 1930s Banking Crises?

Sorry,
"inflation multiplier of x25 in 40 years" not 30 years.
Must study maths.
Must study maths.
Must stu................

Does the IMF Warning Indicate a Repeat of 1930s Banking Crises?

Peter,
".......it is still clear that there must be a day of reckoning"
Don't have a fundamental disagreement with that.

What I think we should do is look at what is different between now and 1930, and concentrate our thoughts there.

Exchange rates, gold price, fractional banking multipliers, major world players, were more fixed then, it is a lot more flexible now.

The weakest link in this flexible chain is the world's number one reserve currency. An IOU from the biggest debtor in world history.
At one point it was $35 to an ounce of gold, now it is $880/890 an inflation multiplier of x25. In 30 years.

I think that the systems ability to keep a lid on crisis' blowing out of control has moved from periods measured in days, to periods measured in years.

Capitalism has a remarkable knack of keeping going, so long as people follow a few basic rules. Everybody has been breaking the rules with abandon, that seems quite a meltdown to stop from were I'm sitting.

Employment Situation Report: No Good News

I rushed my post. Every world leader should have;
IT'S THE JOB'S STUPID ,on their pin board.

The Economic End Game: Nuke the Debt

Debasing a currency always causes inflation.

The history of this law stretches from Rome to Zimbabwe.

What type of inflation we will get is still to early to predict, high, stag hyperinflation? You prints your money, and takes your choice.

I'm not sure there would be any real benefit for investors if the authors hoped for "upward bounce" happened tomorrow.

Employment Situation Report: No Good News

Right article, right time.

The unemployment figures are the smoking gun that shows how deep the economic crisis is. Like Chezfredrick, I wish for a different reality.
But if the only deal on the table is a shit deal, guess what?

IT"S THE ECONOMY STUPID, should be on every world leaders pin board.

G-20 on Protectionism: A Cause for Optimism?

All they agreed on was a bailout, everything else was fudged.

They have no plan to get people back to work and step up wealth creation by producing anything. Where is the added value in a tax haven?

It was a very well staged photo shoot, that's all.

That Wasn't a Bear Market, This Is a Bear Market!

What bears do in the woods, and bulls do in the fields is what this market is at present.

Good job that there is plenty of paper about !

2008: Year of the Global Recession

Hindsight is a wonderful thing.

What is your foresight telling you?

Smartarses are ten a penny at the moment.

The Great Depression vs. Today's Economic Crisis

Thank you for the last two parts of you article.

The differences between "now and then" are invariably glossed over, or ignored by far too many.

I broadly support you conclusions.

My contribution is not part of the 'flations debate, a subject practiced by more people with crystal balls, than crystal thoughts.

I do not believe we will ever go back to a gold standard of old, but conclude that all fiat paper must have some relationship to gold if it is to be trusted, and avoid collapsing.

Many countries have suffered triple digit inflation. Mid war Germany and today's Zimbabwe show when inflation figures end with numbers to the power of 10, what was different. No gold in their banks.

The IMF bailouts are backed by it's gold reserves.

Interest Rates Cannot Go Lower Than Zero

When rates are below inflation, then you pay negative interest.
With rates at zero, and inflation positive, you are paying negative rates.
Any maths Professors out there who can check my formula?


On Dec 19 04:05 PM neutrino23 wrote:

> Just a theoretical point but why can't rates go lower than zero?
> Instead of a contract to repay principal plus alpha after some period
> of time you write a contract to repay principal minus alpha after
> some period of time. Basically you pay people to borrow money.

Interest Rates Cannot Go Lower Than Zero

British understatement dear boy, British understaement.

Interest Rates Cannot Go Lower Than Zero

The net effect of 0% rates must surely mean that you are buying money at less than cost, if inflation stays above zero.
Do the maths, if you borrow now and inflation devalues money, the repayments get steadily easier.
A Zimbabwean who borrowed 1 Million 10 days ago could easily repay that ammount today, and be left with the change.
In a deflationary time of course it would be the opposite.
Whatever one thinks of Fed/Cental bank actions, you have to admit it's bold to move to 0% rates.