LiveWire Economics Blog
LiveWire Economics Blog - October 8, 2007 9:12
The market certainly seemed pleased with the new jobs number. The glass is more than half full – or is it?
Consumer Price Inflation has finally arrived and Gold will have its day in the sun yet. Not a day goes by without another financial institution getting bailed out.
We mentioned briefly in the market section at the start of this issue that there has been a change of tides, and possibly a change as fundamental as a change of current.
For almost a year now, we have been driving our clients crazy with Charles’s tired old metaphor about the global liquidity contraction, in which the central banks keep throwing in sticks of dynamite until the ocean finally disgorges a huge dead whale.
On Wednesday this weekÂ the UK mortgage bank Northern Rock ran a banner advertisement across the bottom of The Daily Telegraph‘s front page.
There are moments in history when everything comes together. Today is the sixth anniversary of the al Qaeda attack against the United States. This is the week Gen. David Petraeus is reporting to Congress on the status of the war in Iraq.
A recap of the scenario: bubble, easy money, inflation in fiat money supply, inflation in commodities and hard assets, inflation, fear of inflation, rising rates, YC inverting, flattening, rising and inverting again, tightening, withdrawal of liquidity, corrections, crashes, talk of stagflation, FEAR, withdrawal of speculative funds, further corrections and crashes, demand collapse…….Deflation.