http://www.latimes.com/business/la-fi-california-jobs28-2009feb28,0,3811550.story
Wow it is the day we went to the 1980's!
First GDP and now Califorina!
What other fun things could we soon be at?
December 29, 1989 DJI 2753.20, Not yet!
inflation reached a startling 13.5%, not yet!
interest rates 11%, not yet!
unemployment rate in the U.S. reached 10.8%, not yet!
Bank failures reached a post-depression high of 42, not yet!
Federal Deposit Insurance Corporation (FDIC) listed another 540 banks as "problem banks". not yet!
Continental Illinois National Bank and Trust Company, the nation's seventh-largest bank (with $45 billion in assets), failed. Whoops, Passed that one!
So in Summary a ways to go! Party like it is 1996, the last time we have a seen a close this low!
Friday, February 27, 2009
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2 comments:
Rob,
Do you think with the lack of savings and since wages decoupled from inflation since the late 80s, we could have hyper inflation?
Utter and complete bond collapse, yes. Monetary collapse that could/would seem inflationary, possibly but hyperinflation, no.
Velocity will stop, completely almost. Biz and Citz could not finance stuff, meaning they couldn't pull things from the future by debt. End game.
At this point no. Till the Fed begins to buy Treasury bonds, we seem to be on a deflation spiral.
Hyperflation would require massive amount of printing, compared to a amount they are printing now. As for the lack of savings, it removes a cushion, but remmember it does not included 401Ks. I would expect a move against 401K holders to the next step in the crisies. As for stagnat wages, again the growth was all masked by increasing cheap debt. With that going we are seeing a fundamenatal reset of what consumer spending will be like. Bonds will not collapase until other countrty leaders think there economoy is recovering or china begins to show life. Niether is the case right now and there are no signs they have not been touched.
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