by
Adam Taggart
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Economy
by
Chris Martenson
The US federal government is barreling towards a certain fiscal train wreck. While there is much being gleefully reported about the return of the shoppers…er, consumers…uh, patriotic citizens…spending more than they have, there is almost no hope of growth returning fast enough to offset the amount of budgetary deterioration that now seems to be baked into the cake.
As always, one component of the problem is that the US political leadership has absolutely zero experience with controlling spending, let alone cutting spending. Where austerity is being attempted in Europe (at great pain, too…if you have not seen this video of the recent Greek riots, it is both remarkable and disturbing) the current civil unrest shows that citizens don’t necessarily dutifully accept their politicians’ belt-tightening policies.
The plan, such as it is, for the US fiscal and monetary authorities seems to be to keep up the government spending (including the Fed’s QE efforts) for as long as necessary until self-sustaining growth returns.
The Federal Budget Deficit and the Looming Crisis
PREVIEW by Chris MartensonThe US federal government is barreling towards a certain fiscal train wreck. While there is much being gleefully reported about the return of the shoppers…er, consumers…uh, patriotic citizens…spending more than they have, there is almost no hope of growth returning fast enough to offset the amount of budgetary deterioration that now seems to be baked into the cake.
As always, one component of the problem is that the US political leadership has absolutely zero experience with controlling spending, let alone cutting spending. Where austerity is being attempted in Europe (at great pain, too…if you have not seen this video of the recent Greek riots, it is both remarkable and disturbing) the current civil unrest shows that citizens don’t necessarily dutifully accept their politicians’ belt-tightening policies.
The plan, such as it is, for the US fiscal and monetary authorities seems to be to keep up the government spending (including the Fed’s QE efforts) for as long as necessary until self-sustaining growth returns.
by
Adam Taggart
"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.
This week's Straight Talk contributor is Tyler Durden, founder and chief demagogue of the popular econoblog Zero Hedge. Zero Hedge's mission is to bring back a more critical, rigorous, and informed style of commentary and synthesis for the professional investing public. The blog has experienced explosive growth in it's two-year existence, due in part to its prolific coverage of financial events as well as its unapologetic (some say controversial) editorial approach, which is often highly critical of today's economic and political leaders.
1. What led you to start Zero Hedge? Was there a particular story or moment? For many of our readers, you have become the CNN of the Great Collapse (this is seen as a positive thing). Is this what you set out to be?
Zero Hedge was started two years ago in the aftermath of the Great Financial Crash, as coined by Bill Buckler, when we realized there is a substantial vacuum in information distribution, and to a lesser extent, processing. The financial media world was (and to a great extent still is) dominated by journalists who were learning finance on the job and thus were incapable of putting the dots together on most stories under investigation.
Straight Talk with Tyler Durden: The U.S. Is Free-Falling Into Bankruptcy
by Adam Taggart"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.
This week's Straight Talk contributor is Tyler Durden, founder and chief demagogue of the popular econoblog Zero Hedge. Zero Hedge's mission is to bring back a more critical, rigorous, and informed style of commentary and synthesis for the professional investing public. The blog has experienced explosive growth in it's two-year existence, due in part to its prolific coverage of financial events as well as its unapologetic (some say controversial) editorial approach, which is often highly critical of today's economic and political leaders.
1. What led you to start Zero Hedge? Was there a particular story or moment? For many of our readers, you have become the CNN of the Great Collapse (this is seen as a positive thing). Is this what you set out to be?
Zero Hedge was started two years ago in the aftermath of the Great Financial Crash, as coined by Bill Buckler, when we realized there is a substantial vacuum in information distribution, and to a lesser extent, processing. The financial media world was (and to a great extent still is) dominated by journalists who were learning finance on the job and thus were incapable of putting the dots together on most stories under investigation.
by
Chris Martenson
Don’t Be Fooled: Inflation Has The Upper Hand
Wednesday, December 8, 2010
Executive Summary
- Money supply (M2) has been steadily growing for a decade, and banks hold an unprecedented amount of excess reserves that could enter the market at any time.
- Credit growth is flatlining.
- Debt in the household & financial sectors (the big enchilada) exhibits the deflationary trends that are pre-occupying the Fed.
- Federal government credit is exploding upwards as a result.
- Corporate and state debt are increasing, but at more moderate rates.
- Energy costs are high and getting higher = inflationary.
- Confidence in paper currencies is plummeting = potentially hyperinflationary.
- Forecast for the future…
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
In Part I, we stepped through prices as useful indicators of whether we are in a period of inflation or deflation. Because there’s no more important determination to make than to get an early read on whether we are facing a future of inflation or deflation, we are going to dive a bit more deeply into the evidence here to round out the story.
Let’s begin with….
Money
The classic definition of inflation or deflation is a “relative change in the amount of money compared to goods and services.” Too much money and you have inflation; too little and you have deflation.
Don’t Be Fooled: Inflation Has The Upper Hand
PREVIEW by Chris MartensonDon’t Be Fooled: Inflation Has The Upper Hand
Wednesday, December 8, 2010
Executive Summary
- Money supply (M2) has been steadily growing for a decade, and banks hold an unprecedented amount of excess reserves that could enter the market at any time.
- Credit growth is flatlining.
- Debt in the household & financial sectors (the big enchilada) exhibits the deflationary trends that are pre-occupying the Fed.
- Federal government credit is exploding upwards as a result.
- Corporate and state debt are increasing, but at more moderate rates.
- Energy costs are high and getting higher = inflationary.
- Confidence in paper currencies is plummeting = potentially hyperinflationary.
- Forecast for the future…
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
In Part I, we stepped through prices as useful indicators of whether we are in a period of inflation or deflation. Because there’s no more important determination to make than to get an early read on whether we are facing a future of inflation or deflation, we are going to dive a bit more deeply into the evidence here to round out the story.
Let’s begin with….
Money
The classic definition of inflation or deflation is a “relative change in the amount of money compared to goods and services.” Too much money and you have inflation; too little and you have deflation.
by
Adam Taggart
"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.
This week's Straight Talk contributor is Charles Hugh Smith, who has been an independent journalist for 22 years. His weblog, www.oftwominds.com, is a daily compendium of observations and analysis on the global economy and financial markets, as well as notable political, social, and cultural trends. Charles has authored a number of books across several genres, including the recent Survival+: Structuring Prosperity for Yourself and the Nation.
1. Of the many forces at play that you write about within the economy, society, and politics, which ones do you see as the most defining for the future? How do you expect things to unfold?
CHS: Clearly, demographics and Peak Oil are forces which cannot be massaged away by policy tweaks or financial engineering. I think the exhaustion of Global Neoliberal Capitalism and State Capitalism is apparent, as is the bankruptcy of the two ideologies that more or less define our politics. The reliance on expansion of credit and State power is a dynamic with only unhappy endings.
Straight Talk with Charles Hugh Smith: Why The Status Quo Is Unsustainable
by Adam Taggart"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.
This week's Straight Talk contributor is Charles Hugh Smith, who has been an independent journalist for 22 years. His weblog, www.oftwominds.com, is a daily compendium of observations and analysis on the global economy and financial markets, as well as notable political, social, and cultural trends. Charles has authored a number of books across several genres, including the recent Survival+: Structuring Prosperity for Yourself and the Nation.
1. Of the many forces at play that you write about within the economy, society, and politics, which ones do you see as the most defining for the future? How do you expect things to unfold?
CHS: Clearly, demographics and Peak Oil are forces which cannot be massaged away by policy tweaks or financial engineering. I think the exhaustion of Global Neoliberal Capitalism and State Capitalism is apparent, as is the bankruptcy of the two ideologies that more or less define our politics. The reliance on expansion of credit and State power is a dynamic with only unhappy endings.
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