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Everything’s Deflating And Nobody Seems To Notice
Everything’s Deflating And Nobody Seems To Notice Whenever we at the Automatic Earth explain, as we must have done at least a hundred times in our existence, that, and why, we refuse to define inflation and deflation as rising or falling prices (only), we always get a lot of comments and reactions implying that people […]
The Latest Evidence That Global Trade Has Collapsed: India’s Exports/Imports Plunge By 25%
The Latest Evidence That Global Trade Has Collapsed: India’s Exports/Imports Plunge By 25% Late last month, India surprised 51 out of 52 economists when the RBI cut rates by 50bps. Although economists have a reputation for being terrible when it comes to making predictions (getting it wrong perpetually is almost a job requirement), it’s difficult […]
Overcapacity “will be even greater than in 2009.”
Overcapacity “will be even greater than in 2009.” “I would be open to the possibility” of reducing the fed funds rate “even further” and go negative, explained Minneapolis Fed President Narayana Kocherlakota on Thursday. Some folks just don’t get it. Here are the results of seven years of global QE and zero-interest-rate policies: Global demand […]
China Provides Another Threat to Oil Prices
China Provides Another Threat to Oil Prices First it was a stock market meltdown, now it’s a weakening currency. China continues to present significant risks to the oil market. On August 11, China decided to devalue its currency in an effort to keep its export-driven economy competitive. The yuan fell 1.9 percent on Tuesday, the […]
Will China Play The ‘Gold Card’?
Will China Play The ‘Gold Card’? Alasdair Macleod has posted an article at www.goldmoney.com which I think is important. (See “Credit deflation and gold”.www.goldmoney.com/research/analysis.) The thrust of the article is that China, at some point, will have to revalue gold in China; which means, in other words, that China will decide to devalue the Yuan […]
People’s Bank of China Freaks Out, Devalues Yuan by Record Amount, Vows to “Severely Punish” Capital Flight
People’s Bank of China Freaks Out, Devalues Yuan by Record Amount, Vows to “Severely Punish” Capital Flight Everything has started to go wrong in the Chinese economy despite its mind-bending growth rate of 7%. Exports plunged and imports too. Sales in the world’s largest auto market suddenly are shrinking just when overcapacity is ballooning. The […]
China’s Hard Landing Suddenly Gets a Lot Rougher
China’s Hard Landing Suddenly Gets a Lot Rougher This has become a sign of the times: Foxconn, with 1.3 million employees the world’s largest contract electronics manufacturer, making gadgets for Apple and many others, and with mega-production facilities in China, inked a memorandum of understanding on Saturday under which it would invest $5 billion over the next five […]
Currency Devaluation: The Crushing Vice of Price
Currency Devaluation: The Crushing Vice of Price Devaluation has a negative consequence few mention: the cost of imports skyrockets. When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. As a currency loses purchasing power relative to the currencies of trading partners, exported goods and services become cheaper […]
China Could Face “Sharp” Rise In Capital Outflows If Stocks, Economy Lose Momentum
China Could Face “Sharp” Rise In Capital Outflows If Stocks, Economy Lose Momentum We’ve written quite a bit over the past two months about capital outflows from China. Last week for instance, we documented how the country saw its fourth consecutive quarter of outflows in Q1, bringing the 12 month running total to some $300 billion. Why, […]
The Monetary Illusion Again in Trade
The Monetary Illusion Again in Trade Just as a follow-up to further highlight and emphasize the “monetary illusion” of currency devaluation in this closed environment, the yen’s returned devaluation against the “dollar” more recently has renewed confusion (or intentional misdirection) about what Abenomics is supposedly accomplishing. Taken solely from the perspective of the Japanese internally, exports […]
UK trade deficit narrows after oil price falls
UK trade deficit narrows after oil price falls The falling price of oil helped to narrow the UK’s trade gap with the rest of the world in November to its lowest since June 2013, official figures show. The Office for National Statistics (ONS) said the UK’s deficit in goods and services was £1.4bn in November, compared with […]
