Monday, Jun 08, 2009
Ambrose Evans-Pritchard: It is lonely in the diminishing camp of bears
Telegraph: Merkel's inflationary fretting may wake the bears from hibernation
The fall in industrial output has been roughly equal to the 1929-1930 stage for Germany and the Anglo-Saxons, but worse for Japan, France, Italy, and Eastern Europe. The collapse in world trade has been swifter: the global equity crash has been twice as bad. "It's a depression alright." Global debt leverage is much greater this time. Capacity utilization is running at an historic low of 50pc-60pc. Companies will have to fire a lot of workers. This is where the danger lies. Trade data from Asia are flashing warning signals again. Korea's exports were down 28.3pc in May, reversing the April rebound. Malaysia has slipped to -26pc, and India has touched a new low of -33pc. US freight data is getting worse, not better.
Posted by drewster @ 12:23 AM (2071 views) Add Comment
24 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. devo said...
At the risk of scaremongering (Devo scaremongering? Surely not! Ed.) this caught my eye in the comments section...
Would anybody confirm the rumour that Germany has demanded all their gold, held by the USA, be physically transferred to Germany. If true then the direst predictions will occur.
2. crunchy said...
devo, it is true. Not posting anymore, grown out of this site. Moving on to somewhere more challenging and motivated and on a higher level than property. This site is a waste of time for me now and so is this fuoked country. All the best to bloggers and thanks to those who have helped me finally piece this BS nonesense together.
Good luck all. I shall say no more!
3. drewster said...
crunchy - Can you give us a clue as to where you're moving onto? I've been looking around for bear-food, but it's thin on the ground these days.
devo - Don't believe everything you read on the internet! The only story I can find relating to Germany and gold is this flimsy marketing fluff piece: Reuters: German firm plans gold ATMs to meet growing demand. I saw a tv advert for a pawnbrokers (Cash Converters) earlier today, specifying an interest in gold jewellery. If that's not a sign of an overblown market then what is? Next they'll be selling domestic oil tanks "to preserve your wealth in the most liquid form of black gold". Actually there's probably a market for crap like that....
4. crunchy said...
3. North Mallorca. asap.
Adios!
5. devo said...
"to preserve your wealth in the most liquid form of black gold"
Like JPMorgan's antics off the coast of Malta, you mean?
6. techieman said...
Le Crunch 2007 and three quarters - 2009 and a half off to play with the big boys maybe they will get the benefit of a lucid specific level of where various markets meet support or resistance - rather than "the trend is your friend" "buy low sell high - simple" which we have not been entrusted with because we are not worthy. Who knows?
Au revior. RIP.
7. debtfree said...
@ drewster
" I saw a tv advert for a pawnbrokers (Cash Converters) earlier today, specifying an interest in gold jewellery. If that's not a sign of an overblown market then what is? "
They are advertising to buy gold, not sell. When someone down the pub, work colleagues or your relatives start talking about buying gold, then that's a sign of an overblown market.
8. 51ck-6-51x said...
So we'll be seeing a 'new' commentator soon with some fresh, interesting views, sweet ;p
But seriously now, we'll miss the *crunch*.
9. techieman said...
"There are reasons, other than rising inflation expectations, to explain why Government bond yields are rising. Firstly, the huge rise in supply. Secondly, the fear that Governments will default. "
Thats a comment at the bottom, since Ambrose thinks that bond yields are rising because of a perceived inflation risk, and il ne comprend pas. I would go with the comment - i think that this issue cannot be overstated in its importance. In a years time i would be very interested to see Gilt yields and to note the divergence between them and the (de)(in)/flationary word around then. As the comment says the huge rise in supply has and is very likely to continue to push the yield higher. As for the second point.... we are a long way from that, if that were the case bonds yields would be in the high double digits.
Of course that can all change quite quickly.
10. happy mondays said...
Good luck crunchy..Bend with the wind..If you Get naffed off, use my philosophy, F**k Em !
11. jackas said...
Well done Crunchy.
If you truely are getting out then you are doing the right thing. We all know it too, but we kind of enjoy being miserable.
12. 51ck-6-51x said...
RE: Bond yields
Everything to do with supply & the increasing leverage of governments and very little to do with an inflationary outlook (of course a bit, but not much methinks - some here may think there is huge inflation coming, but the market has not priced it in yet, and the market does not seem so sure of this any how.)
RE: T.V. ads for buying gold jewellery from Aunt Doris
1. Gold price is currently relatively high, yet they are offering to buy "scrap", so there is a good margin to be made.
2. Economy is weak hence people are in need of cash.
3. Economy is weak hence TV advertising is cheap.
Looking at the three points here together, it starts to become clear - these ads are made by those who want to take advantage of a time when people who need to raise cash feel their scrap gold is valued highly by marketing a poor service. By poor I mean that they will not give anywhere near true worth.
I see no real indicator of gold's future price here.
13. uncle tom said...
"Note that Total's Jean-Jacques Mosconi said markets are awash with so much crude that almost 100m barrels (a near record) are stored on tankers at sea."
Sounds impressive and reassuring, until you realise that's only enough to keep the world supplied until tomorrow lunchtime..
14. stillthinking said...
Uh oh. Deflation starting to look a bit unstoppable and no believable asset bubbles to inflate.
Ireland (-3.5), Thailand (-3.3), China (-1.5), Switzerland (-1), Spain (-0.8), the US (-0.7), Singapore (-0.7), Taiwan (-0.5), Belgium (-0.4), Japan (-0.1), Sweden (-0.1), Germany (0).
15. d'oh said...
666 - yep, there was a stall setup in the Westgate Centre in Oxford where some guy was buying scrap gold. Didn't bother finding out the price he was paying.
As has been said, the time to start worrying is when everyone is buying gold...not selling.
16. debtfree said...
@14. stillthinking
"Uh oh. Deflation starting to look a bit unstoppable and no believable asset bubbles to inflate."
Apart from gold, remember, hyperinflation is a currency event that happens in a deflationary environment.
17. mountain goat said...
"wake the bears from hibernation" LOL - the bears are rubbing their hands with glee at this dead cat bounce! The higher it goes the more profit to be made going short later.
18. uncle tom said...
If you want a commodity to stick under the mattress, platinum looks a much safer bet than either gold or silver..
19. george monsoon said...
I tend to favour tins of beans as a commodity myself, because when nothing else is worth a damn, people still need to eat.
20. mander said...
Too much money creation when that much money was not needed. Money creation process has no transparancy and no sientific background at the moment.
21. drewster said...
debtfree @ 7,
Good point - maybe it hasn't quite reached the masses yet.
techie @ 9,
I agree entirely. An additional factor is political risk - what are the chances that Latvia might elect an extremist party in the not-too-distant future?
666 @ 12,
The indicator is supposedly the shoe-shine boy factor. When even the shoe-shine boy tells you to buy X, then it's time to get out. I remember in summer 2007 a hairdresser telling me to invest in property.
doh @ 15,
Talking of the Westgate, the redevelopment plans appear to have been crunched.
On the gold side, gold ETFs and funds are seeing record in-flows. I do hold some gold, but much less than I used to.
Off-topic, how are the currency markets reacting to the Euro-elections?
22. uncle tom said...
Drewster,
The Americans have a good saying:
"When Wall St comes to Main St, it's time to get out"
23. refusetobuy said...
@UT
What about tax on platinum?
There is no tax on legal tender, like gold sovereigns.
24. p. doff said...
2. crunchy said.... Not posting anymore
Does that mean Malct is coming back?