mikek31's picture

How deleveraging drove the Great Depression

New from Australian economist Steve Keen's Debtwatch.  This may take a few reads, but it's important to understand.  Once the real economy begins to deflate in a highly leveraged system, there's really nothing that can be done to keep it from falling, barring complete destruction of the currency.

WendyT's picture

Interest Rate Derivatives & Goldman Sachs & JPMorgan


Could you please comment on the matter of interest rate derivatives; the huge amounts of these held by GS and JPM (on the order of $87 Trillion and $38 Trillion, respectively, according to one source -which unfortunately I cannot locate at the moment); and the implications for FED policy visavis interest rates, for future banking sector losses, and the financial system in general? (I'm not asking for too much, am I? LOL)

investorzzo's picture

The Deflation Myth

So I’ll be crystal clear. All of this talk of current deflation
is bologna. When you see people writing about deflation, they’re basing
their conclusions on unrevealing data. Those who speak of deflation are
only defining what the banks are doing. The banks are holding their cash not because they have to, but because they can.
The big banks have been given a blank check from the Treasury so they
can make as many loans as they want. The problem is that they want to
avoid nationalization. The more money they “borrow” from the Fed and

scepticus's picture

dreams of recovery and inflation

Hi all,

In the FED thread, many advance the opinion that if the fed's machinations somehow kickstart a recovery then inflation returns with double digit force and it can't be prevented without killing the 'recovery' dead. With this I completely agree.

However implicit in the comments is that there is going to be some measure of recovery. I can't see where this can possibly come from, so I have started this thread to gather ideas of what form such an inflation driving recovery will be.

SamLinder's picture

It's Not a Credit Crunch, It's a Deflation

If you’re within one astronomical
unit of a TV, by now you’re convinced that we’re in a Credit Crunch. 
If only those nasty financial institutions would just loosen credit
things could get right, right?  Not at all; this is a deflation.


SagerXX's picture

Flipping from deflation to [hyper]inflation?

Hey gang --

Right now as I understand it we're in a deflationary period.  Not too severe [yet], but there has to be less money chasing products around the economy just by virtue of the ludicrously large amount of wealth destruction we've seen in the last 9-12 months.   

So -- with the gov throwing money into the economy, as I understand it there will come a point where all that extra currency will start to move us into an inflationary [possibly hyperinflationary] environment.

Kman's picture

Cash: "Trash" or "King"?

Much thanks to Chris and his team for making all of this information available.  After watching the crash course, I have since been reading as many books and blogs on the economy as I have time for.  All indications are that we are in for major adjustments going forward resulting from the US being the greatest consumer based debtor nation in history.  However, there seem to be to viewpoints:

"Cash is Trash"  and "Cash is King"  --->  "Cash" being the US dollar

strabes's picture

The REAL most important video series you'll ever see

I recommend watching these 2 series.  This issue MUST be understood.  They are a good intro to the cancerous monetary system to which we are all slaves...the real problem behind all of our smaller problems...exponential growth in the 20th century, over-population, resource constraints, hollowing out of society, destruction of family/community, destruction of habitat, insatious corporate institutions, wars, leviathan government, perpetual inflation (with vicious deflationary corrections), etc.

rci2145's picture

Just a Great Article

This is just a great interview of Ray Dalio who has made himself one of the richest men in the world through investing.  He called the economic meltdown in 2007 and unlike Peter Schiff, made a profit last year.  He rarely puts himself in the limelight so I hadn't heard of him until this interview but I think there is some really great stuff in it. He does not call our economic situation a recession, he says it will be a long D-process.