Tag Archives: deflation

  • Insider

    Off The Cuff: Repercussions Of Rising Rates

    Rising interest rates are the big story right now
    by Adam Taggart

    Friday, December 2, 2016, 1:54 AM


    In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

    • A Bottom For Miners?
      • Mish thinks this may be a good purchasing window
    • Hit To Housing
      • Rising interest rates are kryptonite to home prices
    • Vanishing Jobs
      • Trump can't replace the jobs lost to automation
    • The Year Of The Iconoclast
      • Anti-establishment platforms gather steam around the world

    After years and years of declining/0% interest rates, the trend may be reversing. Market interest rates have risen faster over the past month than in decades.

    Chris and Mish see this as having implications that will ripple through all asset classes. As Mish warns:

    I’m watching interest rates just rise and rise. And the thing here is everyone’s betting on this massive inflationary scenario under Trump. I’m not sure I get it. Now, long term, we can all look at this and say, “Yeah, he’s going to take less money in in taxes, he’s going to waste more on infrastructure, he wants to increase military spending.” Of those, the only one I agree with is lowering taxes but the analysis is negative, negative, negative from Congressional CBO and all the people who figure this stuff out.

    So we’ve got this surge in interest rates and money pouring into the dollar. The dollar’s going higher. I look at all of this and I think, “Hmm, a surge in interest rates. Ah, it’s likely to affect an ugly market.” The rising US dollar impacts exports in a negative fashion. The stock market is incredibly overvalued. And we know what generally happens when interest rates rise: I’m looking at a potential deflationary bust. Especially when we factor in Trump’s trade policies that might very well cause a global trade war.

    Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.

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  • Blog

    Hell To Pay

    The final condition for a market crash is falling into place
    by Chris Martenson

    Friday, September 23, 2016, 9:23 PM


    Those familiar with my writing know I put the word “markets” in quotes because we no longer have a financial system where legitimate price discovery is a regular — or even recognizable — feature.

    It's destined to fail. What more can be said about such a flawed system?

    Well, a lot as it turns out. 

    And failure to pay attention at this stage of economic and ecological history will prove to be exceptionally painful.

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  • Insider

    Prepare For The Global Deflationary Deluge

    The 2008 crisis was just a warm-up
    by Chris Martenson

    Friday, September 23, 2016, 9:23 PM


    Executive Summary

    • Why the debt market is the powder keg that will blow things sky-high
    • The most dangerous asset bubbles to watch and avoid
    • The implications of a collapse in the bond market
    • Where will money then go?

    If you have not yet read Part 1: Hell To Pay available free to all readers, please click here to read it first.

    Economic Deformations

    The big problem with central bank policies, besides driving the largest wealth and income gaps in all of recorded history, is that they’ve massively deformed the financial and economic landscape. 

    Too-cheap money has distorted just about everything, and has badly warped corporate incentives. There’s literally no place one can look and not find an economic or financial distortion.  “Gains” (such as they are) have gone to holders of financial assets, and corporations have opted to buy back their own shares and to not re-invest in property, plant, equipment or people. 

    All of this will work right up until the day it doesn’t. And then we'll experience a financial and economic crisis likely to be the largest we ever live through.

    And these distortions are not only everywhere, but they are all at record levels.  As in never higher in human history. 

    Just looking at the corporate data alone ought to scare the pants of off every investor on the planet. As the chart below makes clear…

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  • Insider

    And…..It’s Gone!

    Market value everywhere is vaporizing fast
    by Chris Martenson

    Wednesday, January 20, 2016, 4:00 PM


    The deflation monster was evident across the global markets today, and the possibility of a market crash remains as high as ever.

    In the overnight session on Tuesday, everything fell apart.

    We can now clearly see the tracks of the deflation monster stomping across the world stage. While a retreat into bonds (safety) has happened, that’s just the normal first reaction to such a terrible financial situation.  However, those bonds will prove to be roach motels as the next stage of this monster will be massive bond defaults of all varieties.

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  • Insider

    Why This Next Crisis Will Be Worse Than 2008

    And what you can do to prepare
    by Chris Martenson

    Saturday, January 16, 2016, 12:53 AM


    Executive Summary

    • There are too many signs of deflation to deny it's winning the day
    • Why China's weakening will accelerate the global economy's decent
    • Why this next crisis will be worse than 2008
    • What will it look like if things really get out of control (how bad could things get?)
    • The best investments to be making now, before the rout

    If you have not yet read The Deflation Monster Has Arrived, available free to all readers, please click here to read it first.

    Too Many Warning Signs To Talk About

    The deflationary monster is here and there are almost too many warning signs to list, let alone fully describe.

    So I’ll just list and link them…you can follow up on the details if you want, it’s the ‘general vibe’ I want to get across.

    Here are the signs of a weak economy that we are dealing with:

    The pattern here is one of rapidly slowing economic activity and mounting pain starting “from the outside in” as emerging markets and the poor people within the core countries bear the brunt at first. Things always get rolling to the downside starting with the weakest, peripheral elements first.

    Copper and oil are providing very clear signs that economic activity is not just slow, but in rapid retreat. Wal-Mart tells us that its shoppers are having trouble. The fresh all-time lows in a variety of currencies, plus massive weakness in others, is telling us that the virtuous portion of the liquidity cycle that the Fed, et al., unleashed on the world has entered the vicious part of the cycle.

    The pain will spread to the center with increasing speed. The main question is if the authorities can stop that before the momentum becomes too great to halt? And what will happen if they cannot?

    The answer to that is…

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  • Blog

    Markets Are Correcting Hard

    An assessment of the risks of things getting worse from here
    by Chris Martenson

    Friday, January 8, 2016, 5:41 AM


    The long-awaited global financial market correction has arrived. We are seeing collapses in all major markets and across all major categories.

    As usual, the pain has started at the edges, in the weaker elements (emerging markets, junk bonds, weak companies, etc.) and is rapidly spreading towards the center.

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  • Insider

    The Deflationary Wave Builds

    2016 is already off to a worrisome start
    by Chris Martenson

    Tuesday, January 5, 2016, 6:32 AM


    Well, the New Year got off to a rocky start in the world markets.  Why it has taken so long for the equity markets to react to an obvious weakening global economic environment is beyond us.  We write that knowing that it may take even longer still for reality to catch up to the world’s financial markets.

    Part of the reason for the delay, of course, is that the world’s central banks have been fighting off reality with a coordinated series of actions designed to prop up financial markets for as long as possible.

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  • Blog
    Phonlamai Photo/Shutterstock

    The Screaming Fundamentals For Owning Gold

    We're at a moment of historic opportunity
    by Chris Martenson

    Tuesday, December 8, 2015, 4:53 PM


    Every year or two we update this report, which lays out the investment thesis for gold. Here is this year’s version.

    Silver is touched upon only as necessary; as a separate report of equal scope is required for that precious metal.

    Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world’s fiat (unbacked) currencies. If this experiment fails — and we observe it’s in the process of failing — gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it.

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  • Blog
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    Deflation Warning: The Next Wave

    The global economic slump is accelerating
    by Chris Martenson

    Thursday, October 1, 2015, 4:36 AM


    The signs of deflation are now flashing all over the globe. In our estimation, the possibility of an associated financial crisis is now dangerously high over the next few months.

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  • Insider
    Michael Wick/Shutterstock

    From Deflation To Hyperinflation

    Expect a market crash followed by helicopter money
    by Chris Martenson

    Thursday, October 1, 2015, 4:36 AM


    Executive Summary

    • China is rolling over
    • Contagion will eventually take down the core economies, including the US
    • We are witnessing a full-blown collapse of the commodity complex
    • Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation

    If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.

    The Chinese GDP Lie

    Right off the top, China is not growing anywhere near the 7% it claims.  That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.

    Fortunately, hardly anyone is falling for that particular fib any longer.  Let’s start with the completely obvious manufacturing slump that has hit China:

    Chinese Factory Gauge Slumps to Lowest Level Since March 2009

    Sept 22, 2015

    A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.

    A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.

    Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.


    The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction.  Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target?  You know, because China is…

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