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Things That Make You Go Hmmm - Such As The Global Central Planning Groundhog Day

Tyler Durden's picture





 

Grant Williams submits his latest weekly thoughts on the big picture.

February 2012 finds the world in its own timeloop as we remain trapped in our very own Groundhog Day watching politicians try endless new and inventive ways to ‘fix’ a simple problem of way, WAY too much debt. It isn’t complicated. The world grew fat and happy on the sugar rush provided by a decades-long injection of cheap and easy credit and now it’s time for the crash diet. Trying to avoid the ‘crash’ seems to be uppermost in everybody’s mind.

...

Since 2008 and the bursting of the great credit bubble, central banks have been printing money hand over fist in a desperate attempt to generate the inflation they feel is necessary to drag the world out of a perceived deflationary spiral. The chart (left) shows the growth in ‘assets’ of G-3 Central Banks over the last 17 months alone, during which time, they have increased by 32%.

To date, the level of the various benchmark CPI indicators would suggest there have been no deleterious effects, but just because the results aren’t showing up where those in charge of measuring them are LOOKING, doesn’t  mean they aren’t showing up at all.

Look at food prices across Asia. Look at housing prices in Hong Kong. Look at fuel prices in Nigeria. Look at heating costs in the UK.

Look at gold.

Targeting inflation is a dangerous game to play because - well, because it is impossible. You cannot target ‘inflation’ per se, only a specific measure of a specific collection of items, and the wider that collection of items is, the harder you make it for yourself. But despite what seems fairly obvious to many - namely that ‘inflation’ cannot be finely controlled by setting interest rates (though, if caught in time and tackled aggressively enough it can sometimes betamed as Paul Volcker demonstrated), the minds in charge of setting policy have a peculiar attitude towards something that is so imprecise and so multi-faceted. The general level of certainty surrounding interest rate policy, quantitative easing and inflation amongst Central Bankers is a constant source of amazement to me.

The playbook for the game we are playing now was drawn up a long time ago and we can’t say we weren’t shown what lay between the covers.

As far back as November 2002, when Bailabankout Ben made his seminal speech to the National Economists’ Club, we were told how this was going to play out.

Firstly, the title:

Deflation: Making Sure “It” Doesn’t Happen Here

‘Sure’? Hard to see how you can be ‘sure’ Ben, but OK.

Secondly, this famous nugget with which most of you are no doubt familiar:

“The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning.”

‘Always’. ‘Basic economic reasoning’.

Thirdly, the big one:

...the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation...

And finally, this little nugget

If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.

Three quotes. Three uses of the word ‘always’.

If something is ‘always’ guaranteed to work, you just keep doing it until you get the result you expected, right.

Right?

The inflation warning light that is built into the gold price has been flashing non-stop for eleven straight years and, after the short-lived and, yes I’ll say it, somewhat suspicious-looking correction in December, gold has resumed its inexorable march higher this year amidst a wave of predictions for both high and higher prices and further inflationary action by the ECB in the form of the LTRO along with consistent and concerted talk of the need to generate inflation by the world’s other Central Banks.

(Incidentally, the recent announcement by the FOMC that they would keep their low rate policy for ANOTHER year - out to 2014 - struck me as incredibly strange. The only possible reason for doing that, in my mind at least, would be to fire a shot across the bow of other Central Banks hell-bent on debasing their currencies in the face of a strengthening dollar. That is NOT something Bailabankout Ben is about to sit quietly and let happen. In fact, a case could be quite easily made for QE3 being not necessarily triggered by poor economic numbers, but by a strengthening dollar - but more of that another time).

Gold is most certainly NOT signalling a nice 2% rise in inflation as its gains since 2000 demonstrate.

Full latest TTMYGH report below (pdf):

 

 


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Sun, 02/05/2012 - 21:24 | Link to Comment SGS
SGS's picture

Gold who? That relic metal?

Sun, 02/05/2012 - 21:30 | Link to Comment King_of_simpletons
Sun, 02/05/2012 - 21:45 | Link to Comment Michael
Michael's picture

The words "Bag Holders" comes to mind.

Sun, 02/05/2012 - 22:24 | Link to Comment akak
akak's picture

Shhhhh, don't tell Trav --- apparently, in his universe, the word "bagholder" can only possibly relate to those who hold silver (and somehow, regardless of when or at what price they purchased it).

Sun, 02/05/2012 - 23:58 | Link to Comment Thomas
Thomas's picture

Well ya can't eat it.

Mon, 02/06/2012 - 00:56 | Link to Comment ChrisFromMorningside
ChrisFromMorningside's picture

You can but you'll turn a nice shade of blue-grey.

Mon, 02/06/2012 - 01:04 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

And it only costs $5.00 / oz to get it out of the ground.  Or was that gold?

Sun, 02/05/2012 - 22:02 | Link to Comment disabledvet
disabledvet's picture

how about this Manhattan Transfer:
http://www.youtube.com/watch?feature=player_detailpage&v=B7YsE-wQn9c
were you expecting something different?

Mon, 02/06/2012 - 10:04 | Link to Comment DavidC
DavidC's picture

Superb.

DavidC

Sun, 02/05/2012 - 21:17 | Link to Comment ike
ike's picture

I have one email account that I use JUST to register to Peter Schiff mailing list!

And I got email from Rick Santorum. So Peter is supporting Rick

Sun, 02/05/2012 - 21:37 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

No.

Mon, 02/06/2012 - 00:09 | Link to Comment i-dog
i-dog's picture

It doesn't surprise me at all. From the way Schiff behaved during his recent senate campaign, I don't trust him one inch any more. He's only in it for the money (though he does make many valid points in general).

Mon, 02/06/2012 - 00:25 | Link to Comment Sam Clemons
Sam Clemons's picture

Met him once.  Could not agree more.  On point for ideas, but his personality leaves something to be desired.

Mon, 02/06/2012 - 03:17 | Link to Comment Davalicious
Davalicious's picture

Peter Schiff is Jewish. Jews will naturally want to have a foot hold in all camps, so there will be those fighting for and, apparently, against the status quo. When the dust settles there will be plenty of Jews in the winning camp, and they will open the door to the rest.

Mon, 02/06/2012 - 09:45 | Link to Comment Vlad Tepid
Vlad Tepid's picture

Not that my comment is worth any more than yours but I met him once too (at a hard money conference a few years back) and I found him to be engaging, friendly and informative.  So there you go.  Every one is entitled to off days.

Sun, 02/05/2012 - 21:20 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Inflating gold, it's tradition, bitchez!

Sun, 02/05/2012 - 22:07 | Link to Comment akak
akak's picture

.

Gold is most certainly NOT signalling a nice 2% rise in inflation as its gains since 2000 demonstrate.

Need more be said than this?

Apparently, to the clueless deflationary flat-earthers, there is --- but that is, and will be, their problem, NOT mine.  Let them sit in vain waiting for their magical appreciating fiat currency, nervously biting their nails as gold, silver, food and petroleum all continue relentlessly rising in price, and the dollar (and every other fiat currency) continues to lose purchasing power.

I can just hear them now: "Next year in (deflationary) Jerusalem!"

And next year, and the year after that, and the year after that .....

Sun, 02/05/2012 - 23:50 | Link to Comment seek
seek's picture

I ran across this link recently, which is pretty clearly anti-deflation: http://www.grandpappy.info/hfood1yr

Basically the fellow has a stock list for a one-year supply of long-shelf-life food, every year he gets new pricing info, make adjustments for calories and package size changes, and documents every single detail. The cost of feeding an adult with very basic foods is up 33% in four years. So not the same rise as gold has seen, but the cumulative CPI over the past four years is nowhere near 33%, even though we all know both food and gas has gone up by massive amounts. I think it's just that gold is an immediate leading indicator and the food pricing follows with a delay, which suggests things will be ugly a year from now.

This is obviously by intent, saving banks by hiding inflation. Clearly cost-push, rather than demand-pull inflation, and caused by dollar devaluation.

There's lots of interesting tidbits from the link -- like tomato sauce suddenly losing 160 calories per same-sized can, and going from thick sauce to water as the producer dilutes it while maintaining the same price.

Sun, 02/05/2012 - 23:57 | Link to Comment Matt
Matt's picture

Deflation is occuring in all sorts of places. $5 toaster, $8 coffee maker, $2000 houses. Automobiles seem to be quite a bit more affordable than in 2007.

Food and Energy relentlessly march onwards to higher prices, but there's a few things to look at there. Food is essentially a derivative of oil, since oil is used to make the fertilizers, transport them, to sow the seeds, to dispense the pesticides, to harvest, refrigerate, transport the food to market.

Rising oil prices are affected by several factors, including currency depreciation (the money printing), the desire for oil producing countries to have higher prices, and possible declines in supply, as well as security and geopolitical issues.

Outside of food, oil, silver and gold, what else is getting more expensive?   

Mon, 02/06/2012 - 00:00 | Link to Comment Thomas
Thomas's picture

Don't be faked out by the reduction in quality. Accelerated depreciation rates have to be factored into price. A toaster that lasts 20% the life expectancy of its predecessors requires a fivefold multiplier on its price (per unit of usage). 

Mon, 02/06/2012 - 01:01 | Link to Comment seek
seek's picture

Exactly, producers are cutting whereever they can. Interestingly, many don't actually want to do so, but are forced into quality cuts by the stores, notably Walmart. This story from last year presents the issue pretty well: http://grist.org/business-technology/2011-11-11-is-your-stuff-falling-ap...

It cites a study that basically shows how killing quality results in lower costs, but also competitively enables Walmart because of how the economies of scale work against stores that actually want to sell quality goods, dragging everything down.

 

Mon, 02/06/2012 - 00:28 | Link to Comment Sam Clemons
Sam Clemons's picture

College and bailout costs.

Mon, 02/06/2012 - 00:35 | Link to Comment Manthong
Manthong's picture

"Outside of food, oil, silver and gold, what else is getting more expensive? "

The most expendable item.. government.

Mon, 02/06/2012 - 01:04 | Link to Comment ChrisFromMorningside
ChrisFromMorningside's picture

The welfare state. America's military and the global empire it supports. The public sector in general. Education. Housing costs have remained remarkably static in many metro areas (not including Las Vegas, Phoenix and a few other epicenters) despite a huge overstock.

 

Mon, 02/06/2012 - 01:29 | Link to Comment Strike Back
Strike Back's picture

Anything that the government has a hand in.  Medicine and war come to mind. 

Mon, 02/06/2012 - 03:03 | Link to Comment Sandmann
Sandmann's picture

Outside of food, oil, silver and gold, what else is getting more expensive?  

Lawyers Fees. Medical bills. Taxes. Car Repairs. Paper. Hard Drives. Bank Loans. Prime Real Estate. DVDs. Fencing Panels. Wood. Property Taxes.

Mon, 02/06/2012 - 03:19 | Link to Comment akak
akak's picture

Outside of houses and increasingly low-quality Chinese-made crap, what is getting cheaper?

 

(Aside from the idiotic rhetoric of the clueless and/or disingenuous deflationists, that is.)

Mon, 02/06/2012 - 03:15 | Link to Comment AnAnonymous
AnAnonymous's picture

$2000 houses.

_____________________________________________________

Going for the jugular. Tough.

So as the RE bubble was meant to increase the housing inventory and keep US citizens in their way of life, meaning that hardwork should allow you to buy a house later in life, so what, it means that the US elite has well served the base with what the base desires?

Come on, it is well known that in US citizenism, the elite does not work hand in hand with the base but wants to destroy it.

US citizens always tell there is conspirational elites everywhere wanting to kill them.

Mon, 02/06/2012 - 03:37 | Link to Comment akak
akak's picture

Make me laugh!

Here once again we have the Chinese citizen troll, spreading the anti-American propaganda of nose-picking, roadside-shitting Chinese citizenism.

Not content with invading, conquering and raping Tibet, Chinese citizens and their running dog imperialism now look with greedy eyes at the independent republic of Taiwan, and eventually to the entire rest of the world.

Chinese citizens are always invading, conquering, exploiting, destroying and blobbing up.

Destroying their own environment is not enough for Chinese citizens, as Chinese citizenism demands that their toxic environmental destruction be spread and blob up the entire earth, all to build empty ghost cities to celebrate the perversion of Chinese citizenism.

It is the eternal nature of Chinese citizens to spit, pick their noses and blob up.

 

PS: Shouldn't you be working on the sequel to your "Little Red Book", Chairman Maose?  Or does Chinese citizenism spamming simply take up too much of your time?

Mon, 02/06/2012 - 04:25 | Link to Comment AnAnonymous
AnAnonymous's picture

Tibet is 1950.

Justifying every US citizen move thanks to Tibet is childish and dangerous.

Consider, US citizenism is conquering China. Just like the rest of the world.

As the current strand of US citizens indulge itself in justifying everything through Tibet, the potential for the US citizen newcomers grows geometrically.

Same stuff as usual. US citizens behave the same, correction is situational.

In banking, they call it fractional reserve.

In war, they will call it what they call.

Same method.

US citizenism all the way.

Mon, 02/06/2012 - 04:55 | Link to Comment akak
akak's picture

Chinese sanitation and hygiene is 1350.

As the current strand of running dog Chinese citizenism attempts to justify itself, and deny its own existence, it continues to encourage animal-like, rabbit-breeding Chinese citizens to spit in public, pick their noses and shit on the roadsides. 

Such is the 'advanced" and "cultured" nature of Chinese citizenism.

Even as dozens of empty ghost cities rise to the skies, and the formerly free people of Tibet are genocided into extinction and their land colonized by Chinese citizenism blobbing up, Chinese citizens continue to spit, pick their noses and shit on the roadsides.

This is called barbarism.

Barbarism and blobbing up are synonymous with Chinese citizenism.

Mon, 02/06/2012 - 04:55 | Link to Comment AnAnonymous
AnAnonymous's picture

formerly free people of Tibet

///////////////////////////////////////////

Free people of Tibet? US citizenism way then.

Tibetans maintained a system of slavery. Slavery is not freedom, contrary to US citizenism cheap propaganda.

They also had an extended network of children abduction to feed the monasteries.

A system that China curbed without eliminating since abduction keeps going on in Tibet for the same reasons.

Only a US citizen can see freedom in Tibet.

Hey, usually, US citizens of A has no issue when referring to their country back in the eighteenth, 19th century as a free country while being obviously a slaver country.

US citizenism is as US citizen does.

Mon, 02/06/2012 - 05:03 | Link to Comment akak
akak's picture

Make me laugh, chinese troll!

More lies from the Chinese citizenism troll.

Tibet was completely free, and did NOT practice slavery, before the cruel, unjustified and monstrous Chinese citizens invasion of 1950.

Tibet was an independent nation for centuries, living in harmony and utterly unwarlike, until the Chinese crypto-fascists under Mousy Tongue invaded their peace-loving nation and proceeded to colonize, exploit, rape, destroy the environment, kill the Tibetans and otherwise blob up.

The entire world condemned the crypto-fascist running dog Chinese imperialists for their criminal invasion of Tibet, but to no avail --- Chinese citizenism recognizes nothing but its own short-sighted greed.

Like the Old Prussians under the cruel Teutonic Knights, the racially arrogant Chinese will one day appropriate the name "Tibetans" even as they kill off the last real such people.  Such is the nature of rapacious Chinese citizenism.

But one day, the world will turn against Chinese citizenism, and they will pay for their crimes, and for shitting on the roadsides too.

Mon, 02/06/2012 - 05:16 | Link to Comment akak
akak's picture

I do not have the time to wait for your reply, Chinese citizenism citizen, as I know that your spitting and nose-picking will take some time before you can respond.  For all I know, you are looking for a roadside to shit on as well.

But be aware that we all recognize you for what you are, an evil and disingenuous Chinese citizenism citizen, and nobody believes your bigoted lies about Tibet, your anti-Americanism, or your untruthful blobbing up.

We are free of you and your crypto-fascist running dog imperialist masters in Beijing.  Chinese citizenism will be defeated and wiped out, much as you defeated and are wiping out the poor innocent Tibetans in your Chinese citizenism greed.

We shall overcome Chinese citizenism.

Mon, 02/06/2012 - 00:36 | Link to Comment jimmyjames
jimmyjames's picture

Gold is most certainly NOT signalling a nice 2% rise in inflation as its gains since 2000 demonstrate.

Need more be said than this?

Apparently, to the clueless deflationary flat-earthers, there is --- but that is, and will be, their problem, NOT mine.

*************

Obviously gold is not signalling inflation-otherwise it would be going down-not up-

Gold is signalling the same thing now as it was in 2001-

Credit risk ie: Deflation risk-

Here's what gold does during inflation-unless you think we had deflation from 1980-2001-

http://www.acting-man.com/blog/media/2012/01/usgmonth-1.gif

I think you have it completely assbackwards and if you care to show me wrong with some data that proves it-fine-otherwise you're just theorizing -

Mon, 02/06/2012 - 08:07 | Link to Comment j.darkness
j.darkness's picture

Akak, please help me to understand, because while I agree that there is plenty of inflation going around, I also think that the credit bubble is being artificially inflated even though it has been burst.  At some point CB techniques will fail to blow hot air into the bubble and/or the hole will enlarge and no amount of hot air can sustain it.  At that point doesn't all credit disentigrate and we have massive deflationiary death spiral?  I feel that at some point the global ponzie will collapse under its own complexity and we will be left with whatever is in the near field grasp.  Do you think that before we get to the collapse we will hyperinflate?  Will it then collapse?  Either way we are screwed but the preparations are different and I am trying to best prepare.  Thanks in advance for any insight. -j.d

Sun, 02/05/2012 - 21:21 | Link to Comment kill switch
kill switch's picture

ZH is highlighted in this incredible video!!! Fold up the tents,,,time to get out of town!!!

http://www.youtube.com/watch?feature=player_profilepage&v=cJg99tGolNI

Sun, 02/05/2012 - 21:23 | Link to Comment Dapper Dan
Dapper Dan's picture

That G3 chart looks like K2, were gonna need more oxygen,

On second thought it looks like a ten year Gold chart !!!

http://www.kitco.com/charts/popup/au3650nyb.html

 

Sun, 02/05/2012 - 21:38 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Huh, I wonder why that is?

;)

Sun, 02/05/2012 - 21:23 | Link to Comment mariner22
mariner22's picture

Clint Eastwood making commercials about hardships in the motor city for a company bailed out with billions of US taxpayer funds to help FIAT shareholders beat Ford. Is nothing sacred?

Sun, 02/05/2012 - 21:31 | Link to Comment Alea Iactaest
Alea Iactaest's picture

Certainly not if you were a GM bond holder.

Sun, 02/05/2012 - 22:15 | Link to Comment oldman
oldman's picture

What a great idea!!!!

Clint for president!!!!

Wow!!!

What will I think of next?????

 

or bill clinton?                       om

don't say that---you know I don't vote!

Sun, 02/05/2012 - 22:52 | Link to Comment Mike North
Mike North's picture

Bill had his turn. It's Hillary next then Jeb then Chelsea then I guess the first twin presidents.

Sun, 02/05/2012 - 23:24 | Link to Comment economics1996
economics1996's picture

Mochella Obama for President.

Sun, 02/05/2012 - 23:46 | Link to Comment economics1996
economics1996's picture

Whoever voted me down it was a bad joke.

Mon, 02/06/2012 - 00:09 | Link to Comment Mike North
Mike North's picture

Wasn't me. I'm not American so I think it would be funny as hell if she was president. Ross Perot level of funny. Just think of the state of the union speech.

Mon, 02/06/2012 - 00:23 | Link to Comment UP Forester
UP Forester's picture

Would she make a "Giant Sucking Sound," or just suck?

Mon, 02/06/2012 - 03:31 | Link to Comment Transformer
Transformer's picture

Everything Ross Perot predicted, has now come true.

Mon, 02/06/2012 - 10:28 | Link to Comment Theta_Burn
Theta_Burn's picture

Thanks for typing that for me

Sun, 02/05/2012 - 23:07 | Link to Comment A Lunatic
A Lunatic's picture

The only reason I watched it is because I sincerely expected it to go along the lines of "Was that five trillion Benny bucks or was it six.............You feel lucky bitchez? Do ya? 'Cause I don't...........not even dirty fucking Harry can fix this shit".........and then he blows his head off as the camera pans across the American landscape as it burns to the ground. That would have been some classic Eastwood.

Sun, 02/05/2012 - 21:25 | Link to Comment Unprepared
Unprepared's picture

Things that make you want to puke ... like how  re-reading Bernanke's speech

Sun, 02/05/2012 - 21:25 | Link to Comment xela2200
xela2200's picture

"Targeting inflation is a dangerous game to play because - well, because it is impossible."

These bankers are not stupid. They know that inflation targeting doesn't work. They just want to be able to print whenever and however much they want.

Sun, 02/05/2012 - 23:03 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

The 2% target is running around 12% actual these days, so yes, targeting 2% inflation is a joke.  There could be 30% inflation and Bernanke would still say he's targeting 2%.

The whole "targeting inflation" thing is just a cover story for currency printing how much and however they want.

When a bank needs a trillion dollars, no problem, print a trillion dollars, who cares about inflation.

When the government needs a trillion dollars, no problem, print a trillion dollars, who cares about inflation.

When ECB needs a trillion dollars in currency swaps, no problem, print a trillion dollars, who cares about inflation.

When IMF needs a trillion dollars, no problem, print a trillion dollars, who cares about inflation.

You have to ignore what he says and watch what he does.

Mon, 02/06/2012 - 00:25 | Link to Comment UP Forester
UP Forester's picture

Kinda like targetting a building with an ICBM, with MIRVs.

 

Sure, you'll hit your target, right on the mark, just ignore the "collateral damage."

Mon, 02/06/2012 - 02:50 | Link to Comment bonin006
bonin006's picture

I don't think most people, even here, realize yet how blatent the data manipulation has become. Please note that the new target does not use the CPI, but the CPCE (which of course no one outside of Ben's circle has ever heard of). Check out this link for a little information about it:

http://incredulousinvestor.com/2012/01/27/inflation-and-deflation-with-a-sprinkle-of-dinosaurs/

The critical point is that The largest share of the core PCE is wages!

How about that? it doesn't matter if prices of goods double, as long as your wages don't go up, you will spend the same amount (buying half as much as you did before), so no inflation. problem solved.

PS:   I am not much of a fan of the Iranian regime, but they do have a way with words. doesn't "The Evil One" roll off the tongue much better than "The Chairsatan" ?

Sun, 02/05/2012 - 21:28 | Link to Comment Cabreado
Cabreado's picture

Can't talk now, the Corporate Bowl's on.

Go GE, go.

(Literally!) a circus...

and gladiators, even...

ring any bells?

Sun, 02/05/2012 - 21:38 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Got bread?

Sun, 02/05/2012 - 22:25 | Link to Comment RafterManFMJ
RafterManFMJ's picture

 

 

No bread, but I do have an Ipad2 in the crock pot with some leather and a stone.

Sun, 02/05/2012 - 22:35 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I heard those are the ingredients to make dollars!  We'll be rich!

Sun, 02/05/2012 - 23:52 | Link to Comment ChrisFromMorningside
ChrisFromMorningside's picture

There will be plenty of cheap starches consumed across America today.

Sun, 02/05/2012 - 23:17 | Link to Comment knukles
knukles's picture

And the ad for the war movie starring the real seal deals....
My oh my, Eddie Bernays and Joseph Goebbels are holding a candlelight celebration.

Sun, 02/05/2012 - 21:30 | Link to Comment disabledvet
disabledvet's picture

Why shouldn't "Bailout Ben" as you call him SAY that interest rates should stay flat for another year and a half? If Europe plunges into a massive deflation (more than a probability now) thus dragging down Japan (been in a deflation for over 2 decades now) then all he ends up doing is pointing out the obvious. The question then would be "has he truly prevented a deflation here in the USA?" If so...mission accomplished.

Mon, 02/06/2012 - 00:39 | Link to Comment riphowardkatz
riphowardkatz's picture

If Europe plunges into deflation I will eat my hat. If it doesnt will you?

They have a printing press. They cannot plunge into  deflation.

Sun, 02/05/2012 - 21:35 | Link to Comment non_anon
non_anon's picture

curtain call

Sun, 02/05/2012 - 21:39 | Link to Comment The Monkey
The Monkey's picture

Although the situation itself isn't anything to laugh about, It makes me laugh to see the market chases prices ever higher (central planning offering what ZeroHedge proffered as "Bernanke's guarantee"). Same old cheap money & cheap credit.

The full retard zone.

Sun, 02/05/2012 - 21:41 | Link to Comment Manthong
Manthong's picture

Typical that a legitimate salvage operation of long abandoned cargo in international waters should be hijacked by broke, corrupt dictatorships (US and Spain).

Curious that Odyssey called that treasure site "Black Swan".

http://www.guardian.co.uk/world/2012/feb/01/treasure-trove-galleon-returned-spain?newsfeed=true

Sun, 02/05/2012 - 21:44 | Link to Comment spankfish
spankfish's picture

How can I concentrate on the Super Bowl when you keep posting!

Sun, 02/05/2012 - 23:25 | Link to Comment economics1996
economics1996's picture

If you want to make money bet against whoever I pick to win.

Sun, 02/05/2012 - 21:48 | Link to Comment booboo
booboo's picture

thus our largest exports are inflation and war, Ok, I get it now.

Sun, 02/05/2012 - 21:50 | Link to Comment malek
malek's picture

GE ad during the Superbowl: "WE are going to revitalize manufacturing"

Buahahahaaa, did they mix up vitalize with the ever more popular vaporize?

Sun, 02/05/2012 - 22:00 | Link to Comment booboo
booboo's picture

but they make turbines that make electricity that make beer that makes the sheep go baaah. Homer Simpson gets it and so do americans and that'd all that matters

Sun, 02/05/2012 - 22:02 | Link to Comment bob_dabolina
bob_dabolina's picture

They also make generators that make Japasheeple go bzzzzzzz

Sun, 02/05/2012 - 23:51 | Link to Comment dwdollar
dwdollar's picture

Will they clean up radioactive Japan first?

Sun, 02/05/2012 - 23:55 | Link to Comment KickIce
KickIce's picture

But it's transitory vaporization.

Mon, 02/06/2012 - 00:10 | Link to Comment ChrisFromMorningside
ChrisFromMorningside's picture

They're right. We're going to manufacture more debt, more bonds, more junk securities, more unfunded liabilities than ever! Welcome to the "knowledge economy." This is a post-industrial society, don'tcha know? USA! USA!

Sun, 02/05/2012 - 22:11 | Link to Comment Yen Cross
Yen Cross's picture

We need some WB-7!

Sun, 02/05/2012 - 22:22 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The world could use more WB the 7.

Sun, 02/05/2012 - 22:25 | Link to Comment AN0NYM0US
AN0NYM0US's picture

and to think a large percentage of New Jersians are watching football whilst their glorius tubby governor makes nice with PE types - I want to puke

 

http://www.nj.gov/treasury/doinvest/pdf/Blackstone_Strategic_Relationshi...

Sun, 02/05/2012 - 22:40 | Link to Comment Wipeout2097
Wipeout2097's picture

You can control inflation if you remove some causes from the equation, like criminalize parasitic price speculation and evangelize people to ride a bike instead of those gas guzzling SUVs.

If you _want_ to make such an effort, that is another matter.

 

 

Sun, 02/05/2012 - 22:44 | Link to Comment Yen Cross
Yen Cross's picture

 The he/she Maddona should be playing "Free Safety <> Finally an uneventfull score!

Sun, 02/05/2012 - 23:14 | Link to Comment knukles
knukles's picture

Lady Gaga, maybe
Vigilant Citizen'll have something on her show, lickety split.

sorry, I couldn't resist

Mon, 02/06/2012 - 02:58 | Link to Comment Vic Vinegar
Vic Vinegar's picture

The awards shows and tv events are so over-the-top in terms of their “symbolism” it’s pretty much a joke at this point.  It’s high-time they take this stuff to other walks of life…

…imagine seeing Ben Bernanke photographed at a DC-area Starbucks wearing a Baphomet t-shirt.  The alt-media blogosphere would be set ablaze with a simple wardrobe choice!  ZH might see its first 200k view/10k comments article if this happened.

Gentle Ben should do it just for kicks.  Something to break up the boredom of manning the printing press.  LOL

Sun, 02/05/2012 - 22:54 | Link to Comment caerus
caerus's picture

winning...bitchez

Sun, 02/05/2012 - 22:57 | Link to Comment caerus
caerus's picture

welcome to my enormous a hole

 - t brady

Sun, 02/05/2012 - 23:02 | Link to Comment bob_dabolina
bob_dabolina's picture

$eur not happy 

Sun, 02/05/2012 - 23:49 | Link to Comment The Deleuzian
The Deleuzian's picture

Kind of a boring Superbowl but NY won...So Futures up? 

After what's his face (Giants WR) caught that pass and stayed in...The announcer said 'everybody will remember that catch in 50 years' or something close to that...I thought to myself...Nobody is going to remember anything about this Superbowl in 5 years...

Sun, 02/05/2012 - 23:53 | Link to Comment Yen Cross
Yen Cross's picture

As a "keen"" poster said! It's priced in. If it's not, it shall be on the next "HeadLine"!

Mon, 02/06/2012 - 00:30 | Link to Comment UP Forester
UP Forester's picture

Just imagine what is actually happening, that has real impact on the global serfs' pathetic lives, that may or may not be reported on in three weeks after all this Toilet Bowl shit is flushed....

Mon, 02/06/2012 - 01:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Our days are few in number, and whatever we achieve is a puff of wind.

-- Gilgamesh to his friend Enkidu

Mon, 02/06/2012 - 00:12 | Link to Comment i-dog
i-dog's picture

Aaaaaaaarrrrrrggggggghhhhh (totally O/T...sort of) ... The central planners have shut down btJunkie!!! The fuckers....

Mon, 02/06/2012 - 01:09 | Link to Comment Goldilocks
Goldilocks's picture

Antitrust (2001)
http://www.imdb.com/title/tt0218817/

Mercury Rising (1998)
http://www.imdb.com/title/tt0120749/

Live Free or Die Hard (2007)
http://www.imdb.com/title/tt0337978/

The Art of War II: Betrayal (Video 2008)
http://www.imdb.com/title/tt1233571/

Fantasia (1940)
http://www.imdb.com/title/tt0032455/

Fantasia/2000 (1999)
http://www.imdb.com/title/tt0120910/

Mon, 02/06/2012 - 01:09 | Link to Comment Innocent Bystander
Innocent Bystander's picture

you are right, WTF..them SOBs..

Mon, 02/06/2012 - 00:54 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture

"The choice is deadly deflation of dollar devaluation."

 

paraphrasing....

Currency Wars: The Making of the Next Global Crisis (Portfolio) [Hardcover] James Rickards  (Author)
http://www.amazon.com/Currency-Wars-Making-Global-Portfolio/dp/159184449...

 

Mon, 02/06/2012 - 01:32 | Link to Comment gookempucky
gookempucky's picture

the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation...

No such thing as government- we are under the control of the CORPORATMENT.

Mon, 02/06/2012 - 01:51 | Link to Comment CapitalistRock
CapitalistRock's picture

Oh come on. Central banks are buying gold for tradition. Bernanke told Ron Paul exactly that in a public hearing before congress. Get it? Central banks all over the world are spending hundreds of billions of dollars to satisfy their need for tradition. How hard is that to understand?

So move along. These are not the droids you are looking for.

Mon, 02/06/2012 - 02:17 | Link to Comment lolmao500
lolmao500's picture

Things that makes you go FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU!!!

http://www.ynetnews.com/articles/0,7340,L-4185684,00.html

'Israeli attack will prompt Pakistani response'

European diplomat based in Islamabad says Israeli strike would force Pakistan to support Iranian retaliation, while EU official says 'political and economic consequences of attack would be catastrophic for Europe'

I'll remind you that Pakistan got 110 nukes. And they are allied with China.

Mon, 02/06/2012 - 03:00 | Link to Comment Sandmann
Sandmann's picture

So China wants to lose its export markets and Pakistan wants a rendezvous with India ? Would certainly solve a few problems but I am not sure Pakistan will like the aftermath

Mon, 02/06/2012 - 03:03 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Yes, Pakistan is (unofficially) part of ANA, the Asian Nuclear Alliance, with four Asian nuclear powers firmly on Iran's side. 

I really believe it's gonna be a thermonuclear showdown with America vis a vis Iran.

I understand many of us have never seen a real nuclear showdown in our lifetime.  Some remember Bay of Pigs, but even that wasn't a real showdown where someone draws a line in the sand and says don't cross it or we'll push the buttons.

I believe Iran is that line in the sand.  And no, it's not Iran making that threat.  It's ANA making that threat.

Time will tell of course.

Mon, 02/06/2012 - 02:55 | Link to Comment Yen Cross
Yen Cross's picture

As the Futures drift lower. You gotta love this guy! http://www.youtube.com/watch?v=JWyABiUpihs&feature=related

Mon, 02/06/2012 - 02:58 | Link to Comment Sandmann
Sandmann's picture

Look at heating costs in the UK

 

Look at food costs in the UK too...That 30% devaluation plus rampant speculation in West London funds has made food prices a joke here so much so that  Aldi has seen as 20% sales increase as people migrate away from overpriced supermarkets jacking up prices to boost profits. How supermarkets can charge twice Aldi prices for items from the same manufacturer is unclear - that they do is clear. 


Mon, 02/06/2012 - 03:10 | Link to Comment Yen Cross
Yen Cross's picture

Do you think BoE is going to release a second tranch of QE? They are talking 50-75 Billion Pounds. The macro numbers looked decent last week. Thanks for your input.

Mon, 02/06/2012 - 06:57 | Link to Comment css1971
css1971's picture

Most supermarkets run on razor thin margins, we're talking 5%. Tesco for example made 3.8 billion GBP profit in 2011, on 68 billion turnover. 5.6% profit. Hardly profiteering.

If you look at the way Aldi (or Lidl) do business, they have examined how a supermarket works and cut all costs:

  • Everything stays in the carton it was sent.
  • Limited range of goods.
  • Mostly self branded goods.
  • Relatively few staff in the stores.
  • No bag packing at the checkouts.

Most of the cost of running a business is people. So Aldi have set their stores up to require the minimum number of people.

The classic example is the checkout. Compare Tesco stores with Aldi stores. In order to get good throughput the tesco stores have lots of tills, dozens of them sometimes. This means high capital costs, and wage costs. Unlike Tesco, Aldi clearly looked at the problem and made it impossible to pack your bags at the till, because that's what takes the time, so the goods go back in the trolly, and you pack your bags at a point away from the till. For the same till throughput, lower capital costs, and wage costs.

It is the same story with shelf stacking. Tesco, things are taken out of the cartons and go up on their shelves individually. Aldi, they rip the front and top off the carton and the entire box goes up on the shelf.

These are just the things you can see, the distribution chain is probably similarly organised. Aldi and Lidl are going to wipe the floor with Tesco.

Mon, 02/06/2012 - 03:08 | Link to Comment GernB
GernB's picture

What amazes me is not the arrogance of economists in their absolute certainty that they know what they are doing. No, it is the absolute abscense of morality in asking whether they should.

Mon, 02/06/2012 - 03:12 | Link to Comment Reptil
Reptil's picture

OT (sorry, it does make me go hmmm) Earthquake in Iran near Bushehr Nuclear Plant. 50 km from this (unused) plant, at 10 Km depth. Magnitude 5.

Mother Nature, or a HAARP shot across the bow?

http://en.ria.ru/world/20120205/171156414.html

Mon, 02/06/2012 - 03:18 | Link to Comment jomama
jomama's picture

like ron paul losing nevada.  i smell a skunk...

Mon, 02/06/2012 - 03:46 | Link to Comment FranSix
FranSix's picture

Ok, so people say we have inflation.  So we take our example, oil, which is averaging 10X the low in the 1990's.  If we really have inflation in oil, then all related prices would reflect this gain in price over time.

What we're seeing though, are major infrastructural concerns going an all the time.  A refinery blast, an oil rig disaster, oil pipeline leaks, headlong dive into disastrously polluting gas fracking or oil sands, all of the type of infrastructural breakdown that you would see if profits were not essentially growing against costs, despite the production decline. (not to mention geopolitical conflict)

Rather than have the growth that goes along with inflation as you might see in China, evidence is all around that deflation is a major concern.  And China does not fit with the paradigm of peak production decline, because they have more limited sources of energy than the west.

We are in a deflation from the point of view of the stock market in real terms.  The currencies that have appreciated and demanded interventions repetitively are the Yen and the Swiss Franc.  There is no doubt that both these countries are experiencing classic deflationary tides, though prices in their economies remain very firm, despite their currencies.  There is also a housing bubble in various places outside the U.S.

The third leg of the triple waterfall crash that needs to take place should be getting underway with the Greek default.  But even there the collapse has not resulted a rapid sell-off so far.  This has most certainly not been an 'everything, all at once' type deflation, but rather having an inflationary recession of the kind that typifies a monetary crisis.

There. I said it.  That's some really sick air under the market.  Gnarly, dudes.

http://advisorperspectives.com/dshort/updates/Real-Mega-Bears.php

Mon, 02/06/2012 - 04:29 | Link to Comment AnAnonymous
AnAnonymous's picture

Nigeria story is different.

US citizens wanted to cover their asses for a possible decrease in oil supply.

Considering that the nigerian oil sector is mostly at the hand of private entities (US citizen owned entities), Nigeria domestic consumption was a perfect target for making up for the possible loss due to the escalation of conflict against Iran.

The prices increase in Nigeria derives more than anything from the will to suppress domestic consumption so that it can be exported to US citizens countries.

Different case from the stated others.

Mon, 02/06/2012 - 04:54 | Link to Comment akak
akak's picture

Nigerians would do well to flee any dealings that they might have with greedy, exploitive, nose-picking Chinese citizens.

Chinese citizens are merely the means by which the so-called "Communist Party" (Quasi-Fascist Party) of China spreads its malignant doctrine of Chinese citizenism.

Not content with raping resources and blobbing up, Chinese citizenism-practicing Chinese citizens will move into Nigeria to spit, pick their noses and shit on the roadsides, infecting the negroes with the plague of Chinese citizenism.

Chinese citizenism consists of colonizing, exploiting, destroying, poisoning and blobbing up.

Nigeria will be conquered by the turds of Chinese citizenism.

Mon, 02/06/2012 - 05:00 | Link to Comment AnAnonymous
AnAnonymous's picture

Maybe.

But in present days, Nigerians are under US citizenism imperium.

Justifying present action using a hypothetical is US citizenish.

Iranian country shall build a nuclear device, has to stop them now.

Etc...

The insane quest for symetry keeps going.

A little bird tells me that China will fall way before US citizenism, so one wonders who is next in the scapegoat list, as everything under US citizenism, scapegoat come scarce these days.

Mon, 02/06/2012 - 05:18 | Link to Comment akak
akak's picture

Compared to the crimes and perversions of crypto-fascist, running dog imperialist Chinese citizenism, all bad policies of the US and other nations fade into insignificance. 

Chinese citizenism is the existential threat to all humanity that must be dealt with soon, or the world be become one giant toxic garbage heap, with a Chinese citizen eating puppies, rhino toes and bear penises on the top.

Mon, 02/06/2012 - 05:40 | Link to Comment falak pema
falak pema's picture

Woah, the makings of a new crusader right there; hold your horses Akak!

Hate and reason are not good bed fellows...

Don't take that bait, its not fate and its stale as Mao's cultural revolution spate.

To come back to the post :

The play is never over... and the applause should never be imposed by Potus or Emperor. 

People's voice and people's choice; we need more than ever to impose bottom up control on top down falsification and MS media spin. 

Mon, 02/06/2012 - 06:03 | Link to Comment akak
akak's picture

LOL Falak!

Sorry to cause you, or anyone else here (except for AnAnymouse) any discomfort.  I do not of course believe anything that I have written in reply to our dear Chinese friend (aside from the slams at Chinese actions and policies towards Tibet, where I meant every word), but was merely serving back to him a parody of the same sort of bigoted, absurdist nonsense that he loves to bombard and collectivistically condemn us with under the meaningless name of "US citizenism".  It was all just to jab back at him, with tongue firmly in cheek --- I truly have nothing against the Chinese people.

(I just hope he does not read this!)

Mon, 02/06/2012 - 06:05 | Link to Comment falak pema
falak pema's picture

 monday morning humor!

Mon, 02/06/2012 - 05:40 | Link to Comment Sandmann
Sandmann's picture

nigerian oil sector is mostly at the hand of private entities (US citizen owned entities)

The biggest Shell Nigeria is Anglo-Dutch and accounts for >50% Nigerian production. Then again the proxy war waged by Muslim terrorists in Nigeria such as Boko Haram is probably designed to boost oil prices through a squeeze

Mon, 02/06/2012 - 06:16 | Link to Comment css1971
css1971's picture

Many (most?) commodities, not just gold have approximately doubled to tripled in price since 2005.

Corn for example, 2005 peak ~250, now ~640. More than doubled in 7 years. That puts inflation at 13% per year.

Mon, 02/06/2012 - 06:48 | Link to Comment props2009
Mon, 02/13/2012 - 01:31 | Link to Comment q5251355
q5251355's picture

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