Tag Archive: debt

The Fed and the Cotton Candy Market

For Keith Weiner the Federal Reserve operates like a Cotton Candy Machine for the housing market. It creates a massive bubble, financed with debt. It spins the price of a house, with the help of credit and debt, into something many times its original size.

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Goethe Predicted Dollar Slavery

In 1809 Goethe wrote "None are more hopelessly enslaved than those who falsely believe they are free." According to Keith Weiner, this is today's status of American workers, stuck with debt and the losing value of the dollar.

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How Long Will the Dollar Be the Major World Reserve Currency? A Look at Wealth

We examine how long the U.S. Dollar will remain the unique world reserve currency. The most important criterion for being a reserve currency is wealth. While China has recently overtaken the U.S. as for inflation-adjusted GDP, in the next step, it will overtake the U.S. as for wealth.

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2002-2011: Boom of Emerging Markets and Commodities



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Swiss Franc History: Volcker Shock, Oil Glut and the Breakdown of Gold and Emerging Markets

After the Volcker moment or sometimes called "Volcker shock", commodity prices plunged, the gold price collapsed. Thanks to additional supply, e.g. from Northsea oil, a so-called oil glut appeared. After the increase of debt in the 1970s, some economies in Southern America collapsed. The major reason was Volcker's tight monetary policy with high interest rates and the dependency on US funds.

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New Arthurian Economics and Martin Wolf’s “Strip banks of power to create money”



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El-Erian: The New Normal



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European Banking Assets and Debt

Still in summer 2013, too much debt was an issue. By 2014 things have changed: Europeans have too many savings.

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Who is the Biggest Debt Time Bomb: Japan, France, the UK or the United States?

Some must reads: According to the Economist the biggest time bomb in the euro zone crisis is France. We wonder why the United States and Britain, that have same weak trade balances, the same weak competitiveness and a debt overhang, shouldn't have a problem? Just because France must do austerity according to the German Fiscal Compact wish, and the US and Britain do not need to do this? Or like Ray Dalio called it, are the US and Britain...

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The Balance Sheet Recession: UK Q2 Housing Equity Injection Largest Since Q2 2011

The American-Taiwanese economist Richard Koo, is the chief-economist of the Nomura Research Institute. In his theory of the Balance Sheet Recession he distinguishes between the “Yang” phase of the economy and the “Yin” phase (the so-called “balance sheet recession”). In “Yang” times companies want to increase profit and people consume a big part of their pay …

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Don’t Sell Economic Stability to Buy Economic Growth, Warns Tomáš Sedláček

Don’t sell economic stability to buy economic growth,” warned Tomáš Sedláček, chief macroeconomic strategist at CSOB Bank. Sedláček’s unconventional view is that our problem is not lack of growth but too much of it. See more at the

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The Eurozone crisis between euro-morons and zombie-bankers



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IMF World Economic Outlook

Alexander Gloy is founder and president of Lighthouse Investment Management       The IMF’s (International Monetary Fund) “World Economic Outlook”, a slim 250-page piece, came out. Some excerpts: Substantial reductions in estimated output (GDP) growth for 2013 for all major countries:   Unemployment in the Euro-Area (“EA”) is now expected to rise above the level …

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The “Beautiful” De-Leveraging

A beautiful deleveraging balances the three options. In other words, there is a certain amount of austerity, there is a certain amount of debt restructuring, and there is a certain amount of printing of money. When done in the right mix, it isn’t dramatic. It doesn’t produce too much deflation or too much depression. There is slow growth, but it is positive slow growth. At the same time, ratios of debt-to-incomes go down. That’s a beautiful...

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All roads lead to a euro zone break-up

For us all roads lead to a euro zone break-up and multiple sovereign defaults.   Our reasoning can be summarized as follows: Equities are worthless when associated debt becomes encumbered (risk capital takes the  first loss). Equity is not an asset; it is merely the remainder that is left over once debt is subtracted from …

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Guest Post: Six Reasons Why Italy May Exit the Euro Before Spain; Ultimate Occupy Movement

Six Reasons Why Italy May Exit Before Spain 1) Rise of the Five Star Movement 2) 44% of Italians view the euro negatively, only 30% favorably. That is biggest negative spread in the eurozone. In Spain more view the euro positively than negative, albeit by a small 4 percentage point spread.

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Wolfgang Münchau, FT: Merkel was the winner of the Euro summit

  Wolfgang Münchau endorsed many of our arguments Wolfgang Münchau, Financial Times, has endorsed many of our arguments of our Friday's opinion  about the Euro summit where we stated that there was nothing really new. Münchau even claims that "The real victor in Brussels was Merkel."

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