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Old 02-28-2014, 03:54 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,043
Deflation from the BRICs coming back to U.S.

America was/is debt saturated. There was no point in investing here because so many were flat broke. Investors pumped money into emerging markets. The EMs wanted to make a great leap forward at industrialization. The money flowed in and they built huge industrial capacity.
The profits flowed in.
These profits were recycled into U.S. GOV bonds.
GOV pumped this money into the economy.
The BRICs were essentially doing vendor-financing.
GOV spent the money on consumption rather than on investment. It takes a lot of printing to make up for the missing money.
When money was flowing into the BRICs, we were exporting inflation. Money is rapidly flowing OUT of the BRICs and causing deflation. That is a problem.

"Listing the consequences and causes of this overreach is not easy and always open to argument, but possibly the best summary is to suggest that since 2008, ‘Ricardo’s comparative advantage‘ paradigm has been inverted. Economic and above all monetary globalization is now the path to ruin and poverty. From win-win to lose-lose. The worse it gets, expect the architects of ruin – establishment politicians, central bankers and financial pundits, to retreat into even deeper denial.

The Production Bubble That Triggers the Collapse

Another simple way to argue the global economy has overreached is that industrial and economic production capacity in the Emerging economies (EMs), starting with the BRICs, is now massively over-sized. This means the EMs can and will saturate the post-industrial, deflating North with industrial supply at every stage and opportunity as technology, design and product development throw up a new market openings everywhere.'
Fasten Your Seatbelts: The Coming Global Monetary Reset

"But besides the decision to target speculators, the PBOC and SAFE have another issue in mind – the loss of competitiveness of Chinese exporters relative to the rest of Asia and the world because of the appreciation of the yuan. "
The People's Bank Of China Just Joined The Currency War | Business Insider
50% of the cost of the average item in America is for finance. 19% for trash collection and 78% for public housing. 50% average. We pay 100% markup
to the bankers. In an effort to survive, the East will flood all of our markets with anything that is moving. That won't be good for jobs. The fewer people working,,, the more deflation.

Here are a couple of pics that I like; $18B

Vid for today; Call Me Senator - From David Zucker - YouTube
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