The truck maker Scania in sweden had a decline of q 3 from 2007 40000 sold to q 3 2008 115 sold.
This is a decline of 99,7%. No wonder the car industry needs to layoff people.
[quote=steff66]The truck maker Scania in sweden had a decline of q 3 from 2007 40000 sold to q 3 2008 115 sold.
This is a decline of 99,7%. No wonder the car industry needs to layoff people.
[/quote]
Deflation is the surest way in the short run to manage the inflation expectation as a result of Feds recent actions to explode its balance sheet. It is part of attempting to keep status quo in the short run.
There is one more bubble that is clearly evident after the housing and credit bubble as a result of the 20th century oil and its related monetary explosion. That bubble is the population itself. Since the entire thesis as a result of Peak Oil is population has exceeded the planet’s carrying capacity and is ripe for a correction.
The most favourable outcome for the human race over the long run is
-
Short run - purposeful demand destruction underway in response to peak oil as the ruling global super class try to manage the descend for a soft landing by deliberately deflate the economy at a controlled rate faster than oil depletion while managing damaging deflation expectation carefully through confidence measures such as bailouts and Central Banks’ balance sheet tweaks.
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Medium run - Controlled descend fails and super class concludes the population bubble need to be deflated in an orderly fashion as well. The global unemployed as a result of step 1 are recruited into military to either expand Iraq War or start another regional war in name of security. Inflation will result since wars are by definition inflationary, this will either solve the crisis or not but will polarize the remaining civilizations on earth. eg China may stand with the developing world that are being decimated.
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Long run - Regional inflational war does not solve the population problem and instead triggers global thermal nuclear war. Large population centers such as those in China are nuked. The great population bubble bursts and corrects to a small level and everybody who survive the holocaust lives happily ever after since they can now enjoy the fruits of labor of all the dead people for centuries to come.
T:
The smartest man I know opened my eyes to population. It is ALL about population. He suggested I watch Dr. Albert Bartlett (sp?) and I also googled immigration by numbers +video.
I hope we come up with some better alternatives to our dependency on oil and we live sustainably or I can see you scenarios or something different but equally as awful panning out.
Question: Folks, am I missing something here?
SPV’s I thought were primarily off balance sheet financing, that although maybe used for legitimate use, were at least for Enron used to hide billions of dollars in debt.
So the "Fed" is using SPV’s to guarantee 90% of the $600,000,000,000.00 of money market loans, I thought to get confidence back in the money market. Now they are pushing the start date back.
Chris wrote, and I quote, "Either the Fed is running out of maneuvering room on its balance sheet (which is a VERY big story if true), or they are displaying a clear bias for institutions and against individual people (the more likely explanation)."
My questions are:
- Aren't SPV's/Derivatives that got us into this mess?
- Isn't it weird/ironic and possibly insane that they are using them to protect money markets?
If yes and yes then I think Chris is right, on or off balance sheet I think this IS THE storey.
Thanks in advance....
US May Lose Its 'AAA' Rating
Posted November 11th, 2008 by 86theFEDUS May Lose Its ‘AAA’ Rating
CNBC.com | 10 Nov 2008 | 07:49 AM ET
The United States may be on course to lose its ‘AAA’ rating due to
the large amount of debt it has accumulated, according to Martin
Hennecke, senior manager of private clients at Tyche.
"The U.S. might really have to look at a default on the bankruptcy
reorganization of the present financial system" and the bankruptcy of
the government is not out of the realm of possibility, Hennecke said.
"In the United States there is already a funding crisis, and they
will have to sell a lot more bonds next year to fund the bailout
packages that have already been signed off," Hennecke told CNBC.
In order to solve or stem the economic slowdown, Hennecke suggested
the US would have to radically reduce spending across all sectors and
recall all its troops from around the world.
As for a stimulus package, there is not much of an industry left to stimulate back into life, Hennecke said.
While I am not one to underestimate the amount of control the ruling elite possesses, I think you are overestimating it here. There are just too many variables at play here for the ruling elite to orchestrate like a finely tuned symphony.
GregRoberts:
SUPER Post and I’d reccomend to all watching that video http://www.cnbc.com/id/27641538
that GregRoberts posted!
I loved the stupidity of the news reporter and the econimist (raise taxes, and the US can just print money so the S&P guy should be called off.)
I think when this happens we can kiss deflation goodbye and say hello to hyper inflation until the redemoninate the dollar.
Another article predicting inflation in the future…
[quote]3. Long run - Regional inflational war does not solve the population
problem and instead triggers global thermal nuclear war. Large
population centers such as those in China are nuked. The great
population bubble bursts and corrects to a small level and everybody
who survive the holocaust lives happily ever after since they can now
enjoy the fruits of labor of all the dead people for centuries to come.[/quote]
If the preservation of capital goods is a goal of this form of, um, "demand destruction", then presumably famine and pestilence would serve the purpose better than war…
GregRoberts:
Another super link. Thank you. I read, I think on Mish’s site or on Casey Researches site that once the bond markets start closing with more sales than buyers - watch out. I have yet to find the chart where it shows this but I caught the expert being interviewed by the 2 cheerleaders that he (the expert) said it already was doing or had done that (closed with more to sell than those to buy.)
Todays developments from Russia sound real scary. Story below from the ‘Telegraph’.
"The rouble has fallen out of its basket against the euro and the dollar. Russia is facing a serious confidence crisis and this could set off a self-fulfilling panic. What is clear is that economy is slowing drastically."
Chris Weafer, strategist at UralSib, said there were echoes of the 1998 crisis. "If people lose confidence, we could have a massive run on the banks as we saw twice in the nineties: then the game is up,‘’ he told Bloomberg.
Russia is battening down the hatches for a deep slump. It has downgraded is oil forecast to $50 a barrel next year, a level that will play havoc with the state finances. Expecting trouble, the Kremlin has mobilised the police to crush dissent.
"Anti-crisis groups have been set up in the regions to intercept any early indications of destabilisation," said President Dmitry Medvedev.
"If anyone tries to exploit the financial crisis, the authorities should bring criminal charges. We don’t want a return to the 1990s when everything was seething," he said.
What implications does this have for the $US, aren’t they large holders of US debt?
‘Kremlin has mobilised the police to crush dissent’ - doesn’t sound good.
Cheers,
David
New Zealand
Just a few comments…these asset classes are "deflating" in price but this is not "deflation". Up until recently, we’ve had a decrease in the rate of change in money supply growth but the rate of growth is still positive - and now wildly so - which is "inflation". However, there is not enough "inflation" being passed on by the banks at the core fractional reserve banking level via new loans/credit to offset deleveraging so the government is doing its part to ramp up spending/deficits and pump in cash directly to the economy (i.e. Helicopter Ben’s famous speech). This is emergency surgery to by-pass the broken fractional reserve system. The root cause of the inflation is government deficits, which need to be funded and they ain’t going down.
Peter Schiff, Jim Puplava, Jim Rogers et al. have also argued, correctly in my humble opinion, that as massive cuts in the production of goods occur due to a consumer depression, the available supplies of critical goods and consumer staples like food and energy will deteriorate rapidly and, importantly, deteriorate more rapidly than demand destruction. This will cause stagflation and shortages like it did in the 1970’s, which was "impossible" according to Keynesians. And then, when the herd wakes up, money velocity will increase expoentially and government will keep pumping in cash via direct Fed monetization of US Treausury debt as buyer of last resort to fund even worsening deficits under Obama/Pelosi/Reid. The Fed is probably already "monetizing". Then, when the dollar declines, prices of everything we import will rise and the dollars held internationally as reserves will come flooding back to our shores looking for a home of value. This will also cause the price of gold and silver as money with no counter-party risk to skyrocket. And, unless the Fed goes out the yield curve to keep bond prices "in line" through more direct monetization, yields should logically rise dramatically, as well.
Bottom line is that there is no free lunch and socialism/central planning ALWAYS distorts the price system to allocate scarce resources. 2008 anyone? This is highly inflationary (money supply x money velocity) but does not occur in a linear fashion (have to keep fooling some of the people all of the time with "deflation" scares) and it is extremely worrisome.
Davos,
Here’s where I find those links, I start out looking at Peter Shiff’s site,
Then to Friends of Europacific,
http://www.europac.net/friends.asp
24hGold, Howe Street, and Kitco, are good news sources,
The Mogambo Guru is pretty funny in the Daily Reckoning.
The Daily Paul is good, Freedomforce Int. has an unfiltered news section, Infowars and Prisonplanet are interesting, from here I find links to all kinds of info.
If you have any interesting links let me know please, thank you.
Hello GregRoberts:
I’m on my way over there now, thank you! also this is a good capitulation http://marketplace.publicradio.org/display/web/2008/11/12/bailout_runout/
Delivering an update to the Troubled Asset Relief Program (TARP), U.S. Treasury Secretary Henry Paulson said that purchasing troubled assets - the original intention of the $700 billion rescue package - is not an effective use of the program.
http://www.mortgagenewsdaily.com/11122008_phase_two_of_tarp.asp
Yes, numen. War is not an efficient "population control," disease and famine would be the route to population declines. However, war does generate large profits and could enlist large portions of populations into a "one-minded" controlable entity that lives and demands only basic living conditions. New and improved use of military forces?
And some of you need to ease off on this Ayn Rand worship train. Some fundamental understanding of economies does not make her pseudo academic philosophy of Objectivism an absolute model for human action.
"And some of you need to ease off on this Ayn Rand worship train. Some fundamental understanding of economies does not make her pseudo academic philosophy of Objectivism an absolute model for human action. "
Funny how the mere mention of Ayn Rand sets some people off, especially people who have never read any of her works, I have not seen much mention of her on this site and certainly no worship. My guess is your favorite book is Ulysses by James Joyce?
Deflation will be the name of the game for the short and medium to term - as asset prices deflate, but once this stops - and it will once house prices hit bottom - the US will have major inflation as a result of a crisis of confidence in the USD - and it’s subsequent devaluation. House prices need to decline about 40% from their peak in 2006 in order to allign with income growth. They’ve already declined around 25%… just another 15% to go…
Not sure that I was quite "set off" and I have seen Rand mentioned on this site many a times. So that this does not turn into an ideological battle…my point is that just because an author/thinker provides valuable insight to human interactions, whether through the scientific process or through deductive reasoning, don’t assume that this necessarily makes the model absolutely correct. The academic debate around objectivism is interesting and indicates flaws in the foundation for the resulting economic ideology. I see too many people post comments, or saying things, indicating that circumstances are either "this or that" with no "in-betweens" or other perspectives. This is my only point.