By Jason Lureman Thu, 09 Sep 2010 They say a picture is worth a thousand words, so a chart as startlingly clear as our Debt Man's Curve must be worth 10,000 words. EWI analyst Jason Farkas first created and wrote about this parabola that displays different risk levels of bonds in late July 2010. Specifically, the chart plots sovereign, municipal and corporate issuers on the same spectrum. The resulting sharp curve up makes it easier to see why we think that bond issuers are flirting with a bad crash the same way the driver does in Jan and Dean's hit song from the 1960s, "Dead Man's Curve." More recently, Jason recorded this 10-minute video to take his Currency and Interest Rate … [Read more...]
What is the Ultimate Status Symbol in a Deflationary Depression?
Deflationary Depression: Ultimate Status Symbol The Biggest House? No. The Most Expensive Car? Try Again. By Robert Jay Ostentatious display defined the "Gilded Age" in the latter part of the 19th century. Most of the upper class in that period believed that if you had a big bank account, you should make sure everyone knew it. A century later -- during the bull market of the 1980s-1990s -- "McMansions" with BMWs in the garage became more common. Pulling out the plastic and enjoying instant gratification became pervasive. In most decades of the past century, families had to save for big ticket items, perhaps even save all year to ensure holiday presents under the tree. To take … [Read more...]
Quadrillion Dollar Debt: ‘Day of Reckoning’ Looms
What Will Happen as $1,000,000,000,000,000 in Global Debt Winds Down? By Elliott Wave International The biggest balloon in the world is deflating. This balloon had been inflated with a quadrillion (1015) dollars, which is to say: This balloon was filled not with air but with debt from around the globe. What will happen as this global debt winds down? In two words: Deflationary Depression -- the likes of which could be unprecedented in history. A thousand trillion in debt can't be wished away or swept under the rug. No one can "forgive" the debt. The consequences of unwinding this debt could be as massive as the dollar figure itself. … [Read more...]
Why the Bailout Won’t Work
By Andrew Gordon The economy is now staring eyeball-to-eyeball with an activist U.S. government. It will legislate, reform, supervise, bully, give out money like cotton candy and get concessions in return. It will encourage technological development in environmental and other “future” industries. It will seek sources of energy other than the oil and gas we get from Mexico, Canada and OPEC. And it will put generous sums of money behind these initiatives. The Obama government emphatically does not want banks to sit on the money they get from the government. Nor do they want it to go to shareholders in the form of dividend payments. This is why I look for more companies to cut their … [Read more...]
The Inflation Beast is About to be let out of its Cage
By Andrew Gordon How bad is it going to get? Our reference point is the 1930’s and the Great Depression. But people in Russia and Asia only have to recall events of a little more than a decade ago. The “Asian Contagion” actually began in Russia in 1998 when the country defaulted on its national debt. The crisis then hit Thailand and within a year had spread to all of Asia with a few exceptions (Malaysia and China being the main ones). I had a front row seat. At the time, I ran a technology-transfer business in Southeast Asia and our central office was in Jakarta, Indonesia. For a while it looked like the crisis might skirt Indonesia. But it didn’t. And when it hit, it hit with a … [Read more...]
