{"id":15231,"date":"2015-12-13T17:31:37","date_gmt":"2015-12-13T22:31:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15231"},"modified":"2015-12-13T17:31:37","modified_gmt":"2015-12-13T22:31:37","slug":"the-end-of-the-bubble-finance-era","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15231","title":{"rendered":"The End of the Bubble Finance Era"},"content":{"rendered":"<div class=\"row\">\n<h3 class=\"small-12 medium-10 medium-centered columns featured-image\"><img decoding=\"async\" src=\"http:\/\/dweaay7e22a7h.cloudfront.net\/dr-content_3\/uploads\/2015\/12\/shutterstock_61655533-650x360.jpg\" alt=\"\" \/><\/h3>\n<\/div>\n<div class=\"row\">\n<div class=\"small-12 medium-10 medium-centered columns\">\n<div class=\"row\">\n<div class=\"small-12 medium-2 columns\">\n<div class=\"row collapse meta-post-info\">\n<h3 class=\"hide-for-small medium-12 columns\"><a href=\"http:\/\/dailyreckoning.com\/the-end-of-the-bubble-finance-era\/\" target=\"_blank\">The End of the Bubble Finance Era<\/a><\/h3>\n<\/div>\n<\/div>\n<div class=\"small-12 medium-10 columns single-article\">\n<p>We are nearing a crucial inflection point in the worldwide bubble finance cycle that has been underway for more than two decades. To wit, the world\u2019s central banks have finally run out of dry powder. They will be unable to stop the credit implosion which must inexorably follow the false boom.<\/p>\n<p>We will get to the Fed\u2019s upcoming once in a lifetime shift to raising rates below, but first it is crucial to sketch the global macroeconomic context.<\/p>\n<p>In a word, we are now entering an epic deflation. Its leading edge is manifested in the renewed carnage in the commodity pits.<\/p>\n<p>This week the Bloomberg commodity index, which encompasses everything from crude oil to soybeans, copper, nickel, cotton and livestock, plunged below 80 for the first time since 1999. It is now down nearly 70% from its all-time high on the eve of the financial crisis, and 55% from its 2011 recovery high.<\/p>\n<p><a href=\"http:\/\/dailyreckoning.com\/dr-content\/uploads\/2015\/12\/BloombergCommodityIndex1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-79593\" src=\"http:\/\/dailyreckoning.com\/dr-content\/uploads\/2015\/12\/BloombergCommodityIndex1-300x218.png\" alt=\"BloombergCommodityIndex\" width=\"500\" height=\"363\" \/><\/a><\/p>\n<p>Wall Street bulls and Keynesian apologists for the Fed want you to believe that there isn\u2019t much to see here. They claim it\u2019s just a temporary oil glut and some CapEx over-exuberance in the metals and mining industry.<\/p>\n<p>But their assurances that in a year or so current excess supplies of copper, crude, iron ore and other commodities will be absorbed by an expanding global economy couldn\u2019t be farther from the truth. In fact, this error is at the heart of my investment viewpoint.<\/p>\n<p>We believe the global economy is vastly bloated with debt-based spending that can\u2019t be sustained. And that this distortion is compounded on the supply side by an incredible surplus of excess production capacity. As well as wasteful malinvestments that were enabled by dirt cheap central bank credit.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The End of the Bubble Finance Era We are nearing a crucial inflection point in the worldwide bubble finance cycle that has been underway for more than two decades. To wit, the world\u2019s central banks have finally run out of dry powder. They will be unable to stop the credit implosion which must inexorably follow [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[10586,1851,175,11023,2120,195,11024,303,305,366,1427],"class_list":["post-15231","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble-finance","tag-commodity-price-collapse","tag-credit","tag-daily-reckoning","tag-david-stockman","tag-debt","tag-excess-production","tag-fed","tag-federal-reserve","tag-global-economy","tag-supply-and-demand"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15231"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15231\/revisions"}],"predecessor-version":[{"id":15232,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15231\/revisions\/15232"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}