muses of the moment

April 22, 2015

Regarding inflation vs. deflation

There is an ongoing debate about what the US is going thru and what it will go thru: inflation or deflation?

Martin Armstrong says we are in a deflationary monetary cycle. And in the big picture, he is right.

However,

Groovygirl has always said, it depends where you are. And gg has always said, it doesn’t matter how cheap a product/service is, if you don’t have any money to buy it. It is always about can your wages buy the necessaries or not? It really doesn’t matter the actual price, it’s the relation. Can you pay cash to buy a car or must you borrow? Can you borrow? Can you afford the monthly payment? A house? College? Health care? What percentage of your monthly income is spent on debt? 10%, 25%, 50%? If your wages go down, it could turn into 75% overnight?

I remember my grandfather talking about the Depression. He said he was much better off than many people because he had a steady job. He didn’t get a raise for 10 years, but he could save money and buy a car, because prices were low or relatively lower than before 1929/1930. He didn’t have to go in debt to survive. He could pay for food and rental housing and some extras like a car. And he wasn’t ever unemployed during that time.

People were in trouble during the Depression, because they couldn’t get a job, couldn’t earn enough (Farmers) to buy food and shelter, or couldn’t keep a steady income over that 10-year period and fell into debt to buy necessities. So, prices were expensive to them and many were starving and homeless.

It’s the relation of wages (employment) to prices. That’s why people are protesting for a higher minimum wage.

(That’s why people are leaving California with its high state income taxes and high property taxes for the Midwest. That’s why seniors are flocking to states, like Florida, that have no state taxes. People that can move are moving. They can do math and they can save 10-30% simply by moving to a different state and might get a better or steady job.)

But in Germany in the 1930’s, it was all about inflation. But inflation in prices didn’t keep up with wages (because of the country’s debt and their short-term solution of currency manipulation). It was still about the disconnect between wages and prices, but this time is was an inflationary macro environment.

So, structure investments, jobs, and assets to bring in income/gains that will keep up with prices in your home currency. And don’t forget about taxes. Income taxes and other taxes were not as extensive in the 1930’s as they are now. They must be considered in the “price” of living and assume they will go up.

November 4, 2014

Warren Pollock on usawatchdog.com

Warren Pollock has a new interview out!! Great info. Click here for Warren Pollock’s video interview on usawatchdog.com.

gg favorite’s line: the less flexible you are, the more reliant you are on government, the harder it will be. No matter what level of crisis you are preparing for, that truth remains…truth.

March 11, 2014

High Frequency Trading

Tyler Durden via zerohedge had an excellent article this morning about the amazing winning percentages of HFT platforms. Apparently the big market for “winning” is currencies. Making fiat money on fiat money with the fastest computer. Fake money and fake traders. Welcome to the virtual world.

Click here.

But the most interesting thing about this post is not that computers control HFT trading, that the fastest and closest computers always win, that these HFT fat fingers can take down a market in milliseconds, or that currency markets are the main trading market they use to do it.

The scary thing about this chart is that there is a losing side to the winning computer’s HFT bet. Those extraordinary profits were taken from someone’s capital, debt, or savings. And who is that losing side? This is a another angle of the biggest wealth transfer in history.

Side musing: gg thought this little item about Ukraine’s gold air-lifted to NYFed for “safe-keeping” was interesting. Click here. Maybe it is collateral for that billion dollar loan?

January 2, 2014

Excellent Interview on Gold for 2014

This interview from a Switzerland perspective on gold/precious metals with Egon von Greyerz. Click here. About 25 minutes.

One important thing he states is that what he thought would happen (collapse of the dollar and its impact on global fiat money system/precious metal investments) is taking longer than he thought. He didn’t think that people would take the huge amount of printed money from all central banks, not just the US, as actual money. gg agrees, she certainly wouldn’t. But not everyone invests as gg would. Short-term profits rule at the moment, no question about it.

And the very important thing he says : “People should prepare themselves to the best of their ability and then just continue to enjoy life.” Excellent advice. Very good interview.

  • European, and particularly Switzerland, perspective.
  • This person advises very wealthy people, probably mostly Europeans, so he mentions things like art, diamonds, etc. So, not everything will apply to the Main Street investor.
  • This person has been in the business/economics for a very long time. When he talks about the fall of the dollar (especially vs the Swiss Franc), it is on a 50-year time line.

December 24, 2013

Catherine Austin Fitts in Holland

Another very good seminar with Catherine from Holland. It’s long, but worth it. About 2 hours long. First hour is the old system and the last part is the new system.

 

November 6, 2013

A Bubble in search of a pin

Great, great interview with Chris Martenson (about 16 min long). A must listen.

http://www.zerohedge.com/news/2013-11-06/exit-strategy%E2%80%A6-what-exit-strategy

August 13, 2013

Latest Blog Posts from Martin Armstrong dated August 13, 2013

Filed under: Fiat Currency, Martin Armstrong, Tangible Assets, The Dollar Crisis, The Financial Crisis — Tags: — totallygroovygirlfriday @ 8:45 pm

Click here for Martin Armstrong’s latest blog post entitled Outlook for Wheat dated August 13, 2013. With charts.

Wheat is still position to move into a low for September where we have a Monthly Directional Change. We do have an important Monthly Bearish Reversal at 604250. That is the major closing support to watch. Only a monthly closing beneath that would point to a drop down to the 580250 level.

Click here for Martin Armstrong’s latest blog post entitled Outlook for the A$ dated August 13, 2013. With charts.

We still see the A$ declining with the commodity cycle. The rise is likely after 2015.75. For now the major resistance stands at the Monthly Bullish Reversals at 12366 and 13804. The interesting aspect is that the dollar peaked on August 5th at 11299. The Daily Bearish to watch lies at 10713. A minor Daily Bearish lies at 10858. We do have a Directional Change next week.

June 12, 2013

Pay Attention!

Remember when groovygirl said that every industry not based on tangible assets would fail during this debt collapse cycle?

Insurance

Insurance industry has acted like and been used as the banking industry for the last 40 years or so, click here:

Mr. Lawsky said he was struck by similarities between what the life insurers were doing now and the issuing of structured mortgage securities in the run-up to the financial crisis of 2008.

Banking

Remember when groovygirl told you that the swaps and derivatives (especially those tied to the mortgage-backed securities) were NOT resolved and will blow up again?

Seven banks, the ones that hold the majority of these swaps, get a 2 year reprieve. Click here. They are getting a reprieve because if they had to mark to market on their books, they would be bankrupt. Even after applying the new creative accounting rules. Yes, that is how bad it is.

Government bought and paid for, click here.

Dodd-Frank can never be applied to the too big to jail/fail banks. It would cause the world to see that the US banking system is already done, failed, collapsed, a figment of market’s imagination.

Only a matter of time….

April 23, 2013

Propaganda

Once again, Charles Hugh Smith of Of Two Minds, explains the facts beautifully.

Click here.

If you want to know what will happen and why, this is it.

Examine point three very carefully.

3. Since the only endgames to ballooning debts and declining household incomes are runaway inflation or renunciation of debt, the Status Quo has only one choice left to preserve its neofeudal arrangement: do more of what has failed spectacularly, i.e. inflate more asset bubbles as a way to mask the system’s phantom collateral for a few more months or perhaps years.

Unfortunately for central banks and their politico cronies, serial asset bubbles face the headwinds of diminishing returns. All the Fed and Federal agencies had to do to launch the first housing bubble was lower interest rates and encourage subprime mortgages.

Take a look at that Case-Shiller House Price Chart, can you say unsustainable? The Fed is purchasing billions in mortgages each month and the US government is insuring any and all new mortgages and it is still a basic flat line. Spending lots of money just to stay in place….unsustainable.

And take a look at that stock market chart, adjusted for CPI (which is the lowest inflation indicator), stocks have not rebounded. But you would never guess that from listening to the financial talking heads. With this chart in mind, there is still movement up for stock prices, but just keep in mind that is up just to get where you were in 2007. And look at the scary volatility in the stock market since 2007. Bumpy ride.

But the scariest chart, the one that will ensure an economic depression for the next 20 years (whether that is a deflationary depression or a hyperinflationary depression or both, one after the other). It is the spread between real income and real expenses and the widening of that gap that will keep the US in a depressive economic situation for years to come.That spread can happen in a deflation or hyperinflation, same outcome for Main Street. And Main Street, the consumer, is 70% of GDP.

That increasing spread will make sure more defaulted consumer and mortgage debt, lower GDP, and more bail outs and bail-ins for entities holding that debt. Add to this an aging population those income naturally declines after retirement.

These charts tell the whole story.

March 18, 2013

Cyprus

Well, this is certainly an interesting Monday morning. If they were looking to stabilize and create confidence in the European and global banking systems, gg thinks they missed.

This is just one more lesson in the past 5 years. Banks are not a safe place to keep money, you will be penalized for saving money, and saving the current collapsing system is the prime directive.

side musing: it also confirms what Martin says, there can be no conspiracy because they have no idea what they are doing five minutes before they do it. A well-thought-out plan would not piss off the Russian government. The powers-that-be are only reactionary and use every new crisis (whether they indirectly created it or not) as much as possible to retain power, influence, and wealth until it doesn’t work anymore. Then they move to the private sector and use their reactionary-crisis skills to destroy investor funds.

Click here for zero hedge comments. And here.

Update: seems to be going well…yeah right! They just extended the “bank holiday” to Wednesday/Thursday. Click here.

Another update: it just keeps getting more interesting. Problem is that Europe/IMF doesn’t have time for another option to bail out Cyprus, this was it (or Germany front the money…..) Click here. So more interesting than the Russian mob money, the citizen riots, and what this will mean for future “bailouts” of southern European countries is: what will they do in Cyprus, if they don’t do this?

Older Posts »

The Shocking Blue Green Theme. Create a free website or blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.

Join 83 other followers