Economic Collapse

A friend of mine just sent me this article. I’m glad he did. This is a very to-the-point no-bullshit kind of article of the Austrian School from Asia Times Online. My only wish is that journalism i Sweden and the rest of “the west” would be as up front as this…

Dollar’s fate written in history, by John Lee
http://www.atimes.com/atimes/Global_Economy/KF04Dj03.html

Debt-based monetary systems are inherently unstable. Money is created out of thin air by the banks and lent to government, consumers and businesses. In order to service and repay those debts, the borrowers take on more debts. Asset prices are inflated, and the vicious cycle continues until the debtors are unable to borrow or the banks are unwilling to lend.

At that point the system snaps, everything is sold off, and we have a financial crisis at hand. Here, we examine what happens to equity and currency markets in the aftermath of financial crisis and deduce what will be the likely outcome for the United States as it emerges from the present crisis.

Dear readers. Here’s an interesting, though very technical, article on the USD collapse and it’s implication for commodities as well as the panic based temporary USD climb since the collapse of -08. Some interesting observations… The key one being that the 200 day moving averages of both the US Dollar Index (USDX) and the Continuous Commodity Index (CCI) have now reached its daily trading level - this should mean that the trend will be reversed during the summer and later this autumn. However(!) another stock market panic could again temporarily give the USD fuel even though the Fed have increased the monetary base by (at least) 111% during the last year!

…So, this article is interesting, even though I don’t agree with everything… The author believes the US stock indices will continue climbing for the rest of this year… Maybe in nominal terms, not likely in real terms… We’ll see…

Dollar’s Commodity Impact
Adam Hamilton, May 22, 2009
http://www.zealllc.com/2009/usdxcci.htm

Derivatives now 29 times the GDP of the world… What happens to bubbles?

Federal Reserve Will Fail With Quantitative Easing

Quantitative easing; everybody is doing it like the Bank of England, Japan and even Switzerland. Quantitative easing is a tool of monetary policy. The effect is an increase in the quantity of currency without regard to maintaining its quality.

http://www.runtogold.com/2009/03/federal-reserve-will-fail-with-quantitative-easing/

Big Inflation Coming, by Adam Hamilton
http://www.zealllc.com/2009/biginf.htm

“M0 has gone parabolic! Year-over-year in December 2008, it was up 98.9%! This is so shocking it defies belief. In late September as the stock panic started, it had grown by 9.9% over the past year. By October, this rate ballooned to an all-time high of 36.7%. In November, it rocketed again to 73.0%. And in December, it surged up to the staggering 98.9% you can see above. Ben Bernanke’s Fed has doubled the monetary base in a single year! Holy cow.”