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Hyperdeflation is usually followed by hyperdeflation. Hyperdeflation, as in, what happened last week, to wipe out the banks and the ability of the public to hedge. Hyperinflation to re-align the amount of paper wealth in the world to the amount of physical wealth available. I happen to...

Bubble? Where are the stockpiles? Where?? The physical supply and demand balance has never been tighter. Every other bursting bubble has been accompanied by excess inventories of products produced. Whether it be technology (2000), houses (recently), debt (recently), or gold (1980s)...

Next step is de-correlation of assets and asset classes. In the past week, pretty much all world indicies dropped the same amount, measured in US dollars. Most stocks dropped roughly the same amount as well. The next phase will be to seperate true value, from fluff. It wouldn't...

I don't know if I'd say 'faked'. But fundamentally flawed. Let's say we both get together tomorrow night for a drink. I lend you $10 to pay for your drink, and you lend me $10 to pay for my drink. We each charge each other a $1 'loan fee'. Under traditional measures of GDP, the loan...

My theory: the Bush speech will coincide with covert monetary policy action of the Federal Reserve. The Republican propoganda machine will point to a rise in the stock market during the Bush speech as the reason why it is imperative that an 'experienced' guy like John McCain be elected.

Banks need *capital* to back the debt they already have, not more debt right now. People switching from equities to cash makes the problem even worse, as capital (equity) becomes too expensive to issue.

At current prices, farmers aren't pulling any net income. If this deflation continues much longer, the indebted ones will send the keys to the land back to the bank. In many cases, farmers borrow tens, hundreds of thousands of dollars for the inputs, and they make a spread between the inputs...

Food falling??? Why would farmers spend scarce cash to plant crops when they can buy bonds or equities that have imputed returns that are far higher than working the land to produce this 'cheap food' that the Prime Minister speaks of? Makes no sense to me. Will this nonsense give us a...

Corporate bonds are 10%+. RE lending, especially in this environment, should be at a premium to corporate lending. So say the rate is 12% for debt. Equity probably, in this environment, costs 20%. So the blended cost of capital is likely in the 15% range. That means a building (such...

At the rate things are going, AAPL should consider itself lucky if they can even sell fully loaded MacBook Pro's at $800. Nevermind anything that's stripped down.

Most people in manufacturing, engineering, science, or any of those 'forgotten' professions would tell you that we've been in a depression for most of this decade. Seriously, how can an economy lose so much of its industrial base and not be in a depression? If you measure the US dollar...

Can you say, "mother of all short squeezes"?

Bullion lenders are increasingly worried about not getting their gold back = high lease rates.

Depends on what they're trying to accomplish. Yes, they could have lowered the rate to 0.5%. But that would perhaps set off large-scale and sudden selling in the US dollar. I agree that they have to do something. And I think the Fed should be open to monetizing not just financial assets...

The yield curve is still inverted in the very short term part of the market. Until the yield curve manages to un-invert itself, through either T-bill issuance, or through further rate cuts, new money won't be effectively be injected into the system. That's the gist of what's going on. If...

Where are we on that chart right now if contemporary currency was backed by gold, as was the case in during the Great Depression?

Banks don't pay interest? What??? Maybe not to retail customers that schlep their piggybanks to $15/hour tellers (but they are paying the tellers who bring in those deposits), but banks pay interest on all of the money they borrow to lend out, only making a profit when they lend at a higher...

Seriously though, has anyone actually tried negative interest rates in a modern economy? Negative interest rates should encourage inventory builds of things like commodities, and would help the banks re-liquiefy themselves. Is 0% really the floor for interest rates? Seems to me that...

Sure...if cash is now so valuable, why on earth should banks store it in their vaults for you for 'free'?

The only person who doesn't have a clue what he's talking about is *you*. Well obviously there are some business continuity concerns, but those bankers are not irreplaceable. They're not worth tens of millions of dollars each. Those bankers are absolutely nothing without the Lehman...