{"id":15857,"date":"2016-01-01T15:39:53","date_gmt":"2016-01-01T20:39:53","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15857"},"modified":"2016-01-01T15:39:53","modified_gmt":"2016-01-01T20:39:53","slug":"now-comes-the-great-unwind-how-evaporating-commodity-wealth-will-slam-the-casino","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15857","title":{"rendered":"Now Comes The Great Unwind\u2014-How Evaporating Commodity Wealth Will Slam The Casino"},"content":{"rendered":"
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Now Comes The Great Unwind\u2014-How Evaporating Commodity Wealth Will Slam The Casino<\/a><\/h3>\n

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The giant credit fueled boom of the last 20 years has deformed the global economy in ways that are both\u00a0visible and less visible. As to the former, it only needs be pointed out that an economy based on actual savings from real production and\u00a0income\u00a0and a modicum of financial market discipline\u00a0would not build 65 million empty\u00a0apartment units based\u00a0on the theory that their price will rise forever as long as they remain unoccupied!<\/div>\n
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That\u2019s the Red Ponzi at work in China and its replicated all across the land in similar wasteful investments in unused or under-used shopping malls, factories, coal mines, airports, highways, bridges and much, much more.<\/p>\n

But the point here is that China is not some kind of one-off\u00a0aberration.\u00a0In fact, the\u00a0less visible aspects of the credit ponzi exist throughout the global economy and\u00a0they are\u00a0becoming more visible by the day as the Great Deflation gathers force.<\/p>\n

As we have\u00a0regularly\u00a0insisted, there is nothing in previous financial history like the $185 trillion of worldwide credit expansion over the last two decades.\u00a0When\u00a0this central bank fueled credit bubble finally\u00a0reached its apogee in the past year or so, global credit\u00a0had expanded by nearly 4X the gain in\u00a0worldwide GDP.<\/p>\n

Moreover, no small part of the latter was simply the pass-through into the Keynesian-style GDP accounting\u00a0ledgers of fixed asset investment (spending)\u00a0that is destined to become a write-off or public sector white elephant (wealth destruction)\u00a0in the years ahead.<\/p>\n

\"Global<\/a><\/p>\n

The credit bubble, in turn, led to booming demand for commodities and CapEx. And in these unsustainable eruptions layers and layers of distortion and inefficiency cascaded into the world economy and financial system.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Now Comes The Great Unwind\u2014-How Evaporating Commodity Wealth Will Slam The Casino The giant credit fueled boom of the last 20 years has deformed the global economy in ways that are both\u00a0visible and less visible. As to the former, it only needs be pointed out that an economy based on actual savings from real production […]<\/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":[11366,6122,5979,3203,2120,353,11369,11367,2942,11368],"class_list":["post-15857","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cap-ex","tag-casino","tag-contracorner","tag-credit-bubble","tag-david-stockman","tag-gdp","tag-great-deflation","tag-great-unwind","tag-ponzi","tag-red-ponzi"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15857","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=15857"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15857\/revisions"}],"predecessor-version":[{"id":15858,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15857\/revisions\/15858"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}