These are great charts. Thanks for sharing them :-)
In macrospeak, since 2008, money was withdrawn from the monetary
system, as mortgages went underwater and defaulted, hedge funds,
brokerages, banks, and bond traders went insolvent and were closed,
merged, or sold.
Commodities (excepting precious metals and to some extent oil.
Both serve partially as counterbalances or mechanisms balancing
monetary & fiscal policy.) cratered.
The massive injection of additional funds were a global response
to real deflation.
It appears (and makes perfect sense) that financial assets were
first to respond. They are closest to the lever applied to the
economy by the powers that be, The Wizards.
Now commodities, like food are responding. Have you seen corn
lately?
The last sign to turn is/will be interest rates. When the 30yr
treasury gets slammed back to just last year (120s), that will be a
sign the war of deflation is won.
If these folks have beaten the deflation (yes, a big question),
then the coming inflation may be huge.
One may eventually ask if the cure was not worse than the
disease itself?
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
Perhaps the Wizard is pulling the strings
Dangerous divergences developing
Posted by cubby on 12th of Aug 2012 at 10:45 am
These are great charts. Thanks for sharing them :-)
In macrospeak, since 2008, money was withdrawn from the monetary system, as mortgages went underwater and defaulted, hedge funds, brokerages, banks, and bond traders went insolvent and were closed, merged, or sold.
Commodities (excepting precious metals and to some extent oil. Both serve partially as counterbalances or mechanisms balancing monetary & fiscal policy.) cratered.
The massive injection of additional funds were a global response to real deflation.
It appears (and makes perfect sense) that financial assets were first to respond. They are closest to the lever applied to the economy by the powers that be, The Wizards.
Now commodities, like food are responding. Have you seen corn lately?
The last sign to turn is/will be interest rates. When the 30yr treasury gets slammed back to just last year (120s), that will be a sign the war of deflation is won.
If these folks have beaten the deflation (yes, a big question), then the coming inflation may be huge.
One may eventually ask if the cure was not worse than the disease itself?