Thursday, January 15, 2015
Deflation takes hold: Gold and the dollar rising together
If you listen to the financial press you will hear the word "Disinflation" all over the place. This is like listening to the Disney channel and hearing a character curse by using the word "Darn!" In real life people says "Damn it." or "God Damn it to Hell!" or "Motherfucker!"
In real life we are not experiencing Disinflation. We are in the early stages of massive, all consuming debt DEFLATION:
Here's what happens in deflation:
WORLD RATES CRASH:
COPPER CRASHES: Dr Copper: the ultimate arbiter of industrial production:
THE BALTIC DRY INDEX CRASHES: (movement of goods around the world)
DEFLATION IS THE ULTIMATE ENEMY OF AN ECONOMY BUILT ON FINANCIAL ENGINEERING. IT THREATENS THE VIABILITY OF THE FINANCIAL STRUCTURE WHICH IS DEPENDENT ON INFLATION TO FUEL A GAME OF THE GREATER FOOL.
IN DEFLATION MONEY FLOODS OUT OF SPECULATIVE CURRENCIES INTO THE SAFEST CURRENCIES
Gold and the Dollar rise together: Everyone wants the safest currencies. When the dollar begins to appear speculative, gold will rise alone.
Bitcoin crashes: who wants a speculative currency?
AND IN DEFLATION MONEY FLOODS OUT OF SPECULATIVE FINANCIAL ASSETS AND INTO HARD ASSETS.
NOT RIGHT AWAY OF COURSE.
FIRST THE FINANCIAL ASSETS OF THE SAFEST CURRENCIES WILL RISE. THAT MEANS THE DOLLAR. LATER THE VULNERABILITIES OF THE MASSIVE DEBT ASSOCIATED WITH THE DOLLAR WILL ASSERT ITSELF. THEN THOSE TOO WILL CRASH.