The Bubble in Money

December 11, 2012
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In this Thunder Road (TR) report:  I am particularly interested in the first twelve pages. This sets the stage for the next  money printing playing with fire orgy from the likes of the UK, US, ECB and Japan.   TR calls it a money bubble on top of a bond bubble, essentially debasement at a rapid rate, and a huge incubation of inflation.  It will not be the standard demand-pull inflation, but more of a “paradoxical” loss of confidence in money, a crack up boom. This is  followed up by a Minsky moment associated with an enormous credit revulsion and a rate back up largely centered on phony AAA rated credits and by extension the whole bond spectrum.

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Differentiation Among Commodities Bullish for Gold Developers

December 8, 2012
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A plausible theory is circulating that the commodity super cycle driven by China and India will be more “differentiated”  among raw materials, depending on supply-demand balances. Citigroup’s head of global commodities research, Edward L. Morse, believes the “super cycle” of commodity price gains is ending as China’s economy moving toward slower growth and an increase in supplies. Morse thinks prices won’t climb “sharply” higher even though quantitative easing from global central banks lifts gold bullion demand. The S&P’s GSCI Spot Index of 24 raw materials, which has increased four fold since 2001, is up just shy of 1% this year evidenced by sluggish growth in global economies including China. Looking at the different commodities, one realizes Morse was not exactly bearish on the outlook for most.

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Retail Abandons Market

December 4, 2012
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Full gratis Radio Free Wall Street on this topic.

The retail investors has for all practical purposes abandoned the equity market. For months various talking heads have used retail overexposure to the bond market as the argument for”pent up demand” for equities. Instead the beat goes on,  as mutual funds suffered their worst outflows of the year in the week ended Nov. 20, according to ICI, losing $5.5 Bn.  Almost $400 bn has flowed out of equity mutual funds since 2009, including over a quarter trillion in the last two years.

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Setting up the Japan Panic Trade

December 3, 2012
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“Japan is about to ‘detonate’ a ‘debt bomb’ and will be forced to massively devalue its currency.  Japan’s $14 trillion bond market is heading for a crash.” — Kyle Bass, hedge fund manager.

Setting up the Japan Panic Trade, link to Seeking Alpha article

Business as Usual: The Next Fiscal Cliff

November 29, 2012
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More on the fiscal cliff talks: The Presidente’s opening bid - delivered this afternoon by Tim Geithner – calls for a $1.6T tax increase, a $50B economic-stimulus program, and delivering to the WH the power to raise the federal debt limit without congressional approval.  The White House also wants the payroll tax credit to continue and a “permanent” increase in the debt limit.   Lastly, they want to extend emergency unemployment compensation.  It’s a “step backward,” says Mitch McConnell.

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A Whole Generation of Young Americans Tossed Under the Bus

November 28, 2012
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As a member of the baby boom generation I don’t envy my son’s Gen Y  generation: 1982-2004 also known as echo boomers.   In the corrupt lobbying form of crony government practiced in this country, it is clear these age cohorts have little, if any representation. In fact, it is quite arguable that they are foils, and are being thrown under the bus.  Indeed the majority of corruptos in Congress are members of the baby boomer cohort.

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