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While property prices have plummeted since 2005, mortgage values have not (yet) followed suit, reports HousingStory.net. Check out this chart – it’s worth 1000 (debt deflationary) words! Chart source and commentary courtesy of HousingStory.net Also a hat tip to fellow deflationist Carson for sending this beauty along!
Real nice post by Mish Shedlock over on his always excellent blog entitled Are we “Trending Towards Deflation” or in It? I know many readers share my view on the inflation/deflation debate – namely that because we have a credit based economy, the Fed is relatively powerless to stop inflation. If that’s your take, then […]
This headline is starting to become a recurring theme. US consumer credit is in freefall – because, as we all know, the American consumer is FLAT BROKE! BusinessWeek reports: Consumer borrowing in the U.S. dropped in May more than forecast, a sign Americans are less willing to take on debt without an improvement in the […]
Here’s an interesting debt deflation academic paper that our deflationist pal Carson sent along. It’s written by Steve Keen from University of Western Sydney. In the paper, Keen compares the debt deflation environment of the 1930’s with today. Abstract: My 1995 paper on modeling Minsky’s Financial Instability Hypothesis concluded with thestatement that its “chaotic dynamics […]
Courtesy of Pragmatic Capitalism: Is there a debt problem in the United States? You better believe it. But it’s not debt problem everyone is panicking over (the government deficit). It’s at the private sector level. This classic balance sheet recession has consumers saddled with debt. Peter Cecchini, chief strategist at BGC Financial LP says there […]
Since the credit crunch began (all the way back in 2007?!), it’s been a she-said, he-said war of words between entrepreneurs and banks. Entrepreneurs say they can’t get funding. Banks say that they are lending, but there’s nobody credit worthy enough to lend to. Today, the Wall Street Journal’s Small Business Section reports that this […]
Our good friend JL sent this laugher along from The Economist…is it any wonder why old media financial coverage is heading towards extinction? The Economist reports: The behaviour of American consumers has been rather confounding of late. Early in the year, retail sales were surprisingly strong, even as labour markets remained exceedingly weak. Recently, however, […]
What exactly causes deflation – and more specifically – debt deflation? It’s something few investors seem to have a solid grasp of. Debt deflation sinks in when there is a lot of debt outstanding – and it goes unpaid, up to “money heaven” – never to be heard from again. Japan has been in a […]
Late last week, our good friend and fellow deflationist Carson sent over a link from Mish Shedlock’s blog, reporting a sharp annualized decrease in consumer and revolving credit. I just plotted the Fed’s historical data since 1978 (which I chose because there was a single quarter anomaly in 1977 that I didn’t feel like dealing […]
Of course we’re talking about… …all at once now… Muni bonds! Yay! Of course, municipalities far and wide have no way to pay back their increasing deficits amidst falling tax revenues. Of course you knew this already, being an astute reader and no doubt a contrarian thinker. But the mainstream press is even starting to […]
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