Comments on: Inflation, deflation & the dollar - where do we stand?

By: Mike

Mike — Thu, 07 Apr 2011 09:46:31 +0000

Right. Actually, you know what was the real play after the earthquake? Uranium. Look at this index (this is my site - sorry about the url misdirect last month) - jumped from 75 to 90 in a few days, b/c these companies were so oversold. Some smaller stocks did even better, after doing even worse.

http://miningalmanac.com/uranium-index

By: axlcr8

axlcr8 — Wed, 06 Apr 2011 13:45:55 +0000

I asked Bill F the same question. His answer: - They won’t sell treasuries, if they did and then sold the dollars and bought yen, the yen would go higher, which they don’t want. They will just print yen to pay for everything, until they can’t. -

So, the money printing machine will continue, currencies will weaken over time …. that is for sure ….

By: axlcr8

axlcr8 — Tue, 05 Apr 2011 15:51:08 +0000

Here’s some interesting points too:

http://finance.yahoo.com/blogs/daily-ticker/mortal-wound-japan-disaster-could-trigger-global-liquidity-20110405-053120-279.html

Ah well, there’s my mornin pondering … now to get to work!

By: Mike

Mike — Tue, 05 Apr 2011 14:53:44 +0000

There’s always some crisis like this, and you can spend hours pondering the what-ifs. But the scenario you describe is not worth worrying about IMO. Japan will be fine - the impact of the disaster is way over-hyped. Even if they did become a net seller, the impact would be at the margins - single events like that in a market that is driven by generational long cycles are insignificant.

The problems of demographics and a banking system that, like the west’s, won’t allow liquidation of debts are orders of magnitude greater.

By: axlcr8

axlcr8 — Tue, 05 Apr 2011 14:44:55 +0000

Hi Mike,

Hope all is well. Can you please ellaborate on the impact of Japan’s crisis which is in my opinion worsening as the region that has been affected is responsible for 40% of Japan’s GDP. They have to maintain this somehow (if they can) on 20% less Energy. What will be the impact if Japan becomes a net seller of US Treasuries in order to raise the capital needed to rebuild Japan? Could this eventually lead to the collapse of the US Treasury Bond market in the second half of 2011, a market that now has only a single buyer: the US Federal Reserve? If so, then interest rates are going to shoot up it would be safe to say. What would be the impact on stocks, commodity prices and precious metals?

Here’s an interesting article on the subject:
http://www.leap2020.eu/geab-n-53-is-available-global-systemic-crisis-second-half-of-2011-get-ready-for-the-meltdown-of-the-us-treasury-bond_a6091.html

Thanks

By: Mike

Mike — Sun, 03 Apr 2011 16:36:53 +0000

BTW, nice vid here on the australian situation, complete with apologists who insist it’s not a bubble. Steve Keen is my go-to source for Australian economics.

http://www.brokernews.com.au/tv/the-big-story/the-big-story-is-the-bubble-set-to-burst/963/82509

Keen’s site: http://www.debtdeflation.com/blogs/

By: Mike

Mike — Sun, 03 Apr 2011 14:32:57 +0000

Yes, of course. I forgot about China’s giant property bubble. Major waste of capital there. I didn’t know about India’s, but it’s not surprising, since debt is all the rage the world over.

By: axlcr8

axlcr8 — Sun, 03 Apr 2011 14:30:07 +0000

Regarding debtors that are headed towards an “awakening” - I would include Home owners in India and China.

India: Homes that used to cost (in USD) $50K 10 years ago are now being sold for $250 to $350K! Incomes have not risen at the same level as tradtionally, most people in India buy a home out right with cash. Now they are getting loans ..

China: Same story but in most places they are empty!