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18 Νοε 2013 (πριν από 3 χρόνια και 11 μήνες)

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See all recent
John’s Newsletters

at:
www.better
-
management.org





John’s Newsletter Satur
day
10

August

2013


"
It’s the economy stupid
", and progress towards hyperinflation?


Because the US
Federal Reserve’s directors kept talking about “tapering” of QE4ever during
the week, the markets are getting unsettled...


http://finance.yahoo.com/news/stock
-
futures
-
lower
-
pointing
-
towards
-
112625429.html


Meanwhile the tale of the “London Whale” simply gets longer...


http://finance.yahoo.com/news/u
-
considering
-
arrests
-
jpmorgan
-
whale
-
004413023.html


The Japanese economy is now leveraged to a quadrillion yen.


(that is a figure which is a 1
with 15 zeros after it).


I suppose if you are going bust, you may as well go out

in style ...from
Seeking Alpha...


Japanese debt tops ¥1 quadrillion.

Japan's national debt has passed ¥1 quadrillion for the
fir
st time, increasing 1.7% on quarter in Q2 to ¥1,008.6T ($10.46T). That's more than twice
the size of Japan's GDP, and larger than the combined economies of Germany, France and the
U.K. The rise in debt comes as Japan debates whether to increase sales tax t
o 8% in April
from 5% and then to 10% in 2015 in an attempt to shore up its finances.”

I need to confess that I simply do not understand what has been written above.


I have even
resorted to reading books on the subject to seek enlightenment.


The latest b
ook for me to get
back from the library has been Charles Eisenberg’s “Sacred Economics”.


One of his
conclusions is that the world needs to grow the money supply in order to pay interest on
debt.


Profligate sovereigns spending way above their income make
it ever more
necessary.


But that also presumes that either inflation must take place or the global economy
must continue to grow in real terms or both.


But growth isn’t happening in real terms.


In
economists dreams, yes.


But not in real terms.

Many lea
rned economists write that we are headed for a collapse and a monetary reset


probably involving a return to the gold standard.


Germany did this in 1924 when they could
only speak in quadrillions of Reichmarks, so they re
-
set and used another name for th
eir
currency.


I keep the BIS global derivatives summary in front of me when working at my
computer, to stimulate thoughts as to how this must end for us.


In economic terms we never
actually reach an end point....it is just that things change and keep on
changing.


But will we
see a re
-
set?

Egon von Greyerz is the head of the Swiss company, Matterhorn

Asset Management.


He
can’t see an out for the global economy either, but in a report to King World News he made
his comments more coherently than I....

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/9_The_World_Is
_Now_On_The_Edge_Of_A_Massive_Collaps
e.html

The talk of taper for QE4ever is like talking about how to grab and subdue a tiger by its tail,
with no ropes, weapons or other devices.


In a world with GDP of under USD70 trillion, how
do we cope with potentially rising interest rates on interest
rate derivatives of USD489.7
trillion.



To me it seems we may instead be locked into a progression towards hyperinflation....with
lots of nasty stuff along the way.