Thursday, May 20, 2010
More of the same but with bells on
The Telegraph: 'Perfect storm' as market tremors hit China, Europe and the US
Capitulation fever has swept global markets on triple fears of faltering recovery in the US, Chinese credit curbs and Europe's intractable escalating debt crisis.
"It is the perfect storm," said Andrew Roberts, credit strategist at RBS. "People have been too complacent about risky assets. This is a global deflation scare and people need to get ready for falls in US and European bond yields to 2pc."
........................So does all this talk of deflation mean we are heading for a hyper inflationary scenario?...............or is it business as usual?
Again very strong terminology emanating from the Telegraph.....so strong that it makes you wonder if there is smoke behind the fire, and if there is smoke it will make a HPC feel like loosing a tenner on the grand national.
15 Comments
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1. devo said...
chelyabinsk's comments are always worth a read: for example...
For the City of London this is BIG BANG II. The end of their era of the destruction of the British economy and the poison pills they have sold to the global economy. These people have done more to destroy the capitalist system than communism could ever hoped to have done.
2. growler said...
Oh goody. Now we'll have all those people coming out about how we need yet more Keynesian QE to counter "the problem". The problem is what's happening isn't the problem - it's the symptom.
I for one don't have an issue with a bit of an Armageddon. It would seem that this is the only way Governments will realise that you can't grow for ever at the rates we have.
We live in interesting times
3. general congreve said...
Thankfully it seems the time is coming, was worried I might have to wait 5 to 10 years.
GOOOOOOOOOOOOOOOOOOOOOOOOOOLLLLLLLLLDDDDDDDDDD!!!!!!!!!!!!
4. i remember the 90`s said...
The press always have to write the most extreme ,itwas not long back they were writing were over the worse good times ahead ,i suppose they write what sells!!!!!!
5. alan said...
Thanks devo,
I wonder who chelyabinsk happens to be? The comments are quite penetrating!
I googled the name...it said "the most contaminated spot on the planet"
6. This comment has been removed as it was found to be in breach of our Blog Policies.
7. Rental John said...
Gold - does the graph look familiar....
http://66.38.218.33/scripts/hist_charts/yearly_graphs.plx
8. sneaker said...
The Telegraph is consistently the most negative on the economic outlook.
Thing is, the Right always fears that society is declining and the economy is about to collapse.
So are they right about this, or just Right?
My reCaptcha code this time: "dispirit 1972".
9. bellwether said...
To AEP's credit he was been pretty accuate throughout the crisis eg he was writing on the potential of the north south divide causing serious problems with the Euro and MU in 2007/2008. I'm not therefore sure I would therefore write off his work as breathless drivel, although I agree with Flash in that glee about bad economic outcomes is an insane and misguided reaction, and surely more a reflection of current unhappiness.
Then again while I doubt this is the end of the world/globalisation/fiat currencies, I do think the issues are far more serious than most assume. A ponzi scheme can generally be thought of as a an investment which rises in price irrespective of fundementals, fundementals in this context being income. On the basis that income cannot support asset prices in much of the western world (and esp the UK) or pay off the debt accumulated against them without almost impossible growth, it is arguable that there are ponzi aspects to our economy.
Generally amongst the noise the debt issue is not being taken seriously as is evident in the tendancy to look at say banks or greece as, at one extreme, one off's rather than descriptive of an endemic problem and at the other the end of the world as we know.
For me debt is now an endemic problem from which there is not obvious way out (but that is not to say a solution will not be found it will), if we make cuts earning capacity is compromised and deflation becknons, if we expand and take on more debt we encounter inflationary issues, which once out of hand will undermine trust in the whole concept of money and trade.
10. Crunchy said...
6.
You can lead a horse to water.....
Being aware of what is actually happening is a burden flash. If China goes down we all follow. Not funny!!!
Remember my "Hyperinflation food shortages" quotes from months ago.
BTW if you are referring to all so called conspiracy theorists about not having a profession think on
the next time a trade goes against you or the markets go a little weird. :)
LE CRUNCH. Start to love the Euro.
11. flashman said...
bellwether: The debt situation is dire and there will be all sorts of pain and dislocation ahead. Places like Greece will get their comeuppance and I, for one, am pleased. I used to enjoy eating 48 courses in a Taverna for a fiver. Now it costs about the same as a night out in Mayfair and the sweaty resteranteur drives a Merc. It was fools gold and it had to end in tears. I think that the UK will suffer from four years of belt tightening and then we will be OK (partially because we will have flogged off the banks by then). That last sentence makes it seem like I am underplaying the seriousness of the situation. Belt tightening can be very unpleasant and many people will have a hard time of it
In the meantime house prices will fall. If unemployment remains under control there will probably be gentle falls (actual and/or inflation adjusted). If unemployment gets out of control, then I can see houses prices falling by at least 20% and maybe by as much as 30%
12. flashman said...
or even 'sweaty restaurateur'
13. growler said...
or even 'sweaty restauranteur'
14. inbreda said...
or even 'sweaty restaurateur'
Recaptcha: correct that
15. flashman said...
From the dictionary:
"This is also spelled restauranteur (with an ‘n’), but this is considered erroneous by some, and the form restaurateur (without the ‘n’) is preferred in formal writing, and especially in Britain"