I have been telling you for a long time that deflation was the big bogeyman in America’s future, which is why there is such a hype to drag us into some kind of major conflict right now. War is good for the economy and – if enough damage can be done – there’s economic stimulus, a basis for raising taxes, and government asserting even more control of individual humans who deviate from “offishul” group-think.
Now, part of the evidence of deflation has been that while prices have been going up as a roughly 2% rate in the consumer price index, I’ve been telling you that the Fed is increasing the money supply by dramatically higher levels.
But even old pessimistic Ures truly was not ready for the shocking pumping of the M1 money supply in last night’s M1 number in the weekly update to the H.6 money stocks report:
And, you’ll see that pumping of the broader M2 rate is going on at higher levels, too.
So, what does it mean? Well, just that deflation is deepening and despite the worrywart end-of-worlders who are touting inflation and collapse of the dollar, I’ll tell you right now that as soon as Gold gets up to the $1,400 level, a reversal down toward $1,000 will become likely.
As you know, Robin Landry and I have been eyeing the $800 level in gold for a long time. As news that IT’S DEFLATION NOT INFLATION, YOU IDIOTS seeps into mass consciousness, the US market will be set to slide to prices down around 2009 lows –and lower.
The Dow is looking to open down nearly another 150 this morning…deflation is a disaster than usually ends in war….
Russia, Stocks, and Producer Prices
No, this is not as “sexy” as the building US-Russian standoff over Ukraine/Crimea or the aircraft search, we do, nevertheless, tend to put money first around here. That’s because, as goes the money, so too goes all the rest.
We note this morning that the Russian stock market has been handed a 1.90% loss in trading so far today. Earlier, the US market looked to add another 131 point loss in today’s trading. We may issue a special update this afternoon for our Peoplenomics subscribers on what this week’s closing action has done to our Trading Model’s outlook.
Now, about them Producer Prices:
The Producer Price Index for final demand fell 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decline followed advances of 0.2 percent in January and 0.1 percent in December. O
n an unadjusted basis, the index for final demand moved up 0.9 percent for the 12 months ended in February, the smallest 12-month rise since a 0.9- percent increase in May 2013. (See table A.) In February, the 0.1-percent decrease in final demand prices can be traced to the index for final demand services, which fell 0.3 percent.
In contrast, prices for final demand goods advanced 0.4 percent. Within intermediate demand, the index for processed goods climbed 0.7 percent, prices for unprocessed goods jumped 5.7 percent, and the index for services rose 0.2 percent.
The change in final demand for the past 12 months being under 1% was obvious on the road trip Elaine and I just completed. Truck traffic is noticeably down on Interstate 40 and we wouldn’t be surprised to see west coast port container volumes flatten when we run those numbers for subscribers next week.
Another taste of bile for the markets this morning: China’s financial leadership is warning of a wave of bankruptcies to come there. Reason? Companies borrowed too much, and now with global demand for a lot of products level (to declining) we can see that Boom & Bust works in that “worker’s paradise” leftover from Chairman Mao, huh?
The Teflon Senator?
A report (over here) says the FBI has been blocked from taking part in a corruption investigation of senator Harry Reid of Nevada and Mike Lee of Utah.
And who, according to the report, made this patently political decision to “protect the party”? Why none other than Eric Holder, US Attorney General.
Also out today is another damning story about how the Justice Department has refused to release information on hundreds of prosecutorial misconduct cases.
I don’t know about you, but this sure as hell doesn’t seem very “transparent” when allegations against a couple of key senators is hushed up and when prosecutors guilty of misconduct are not named.
I’ve said it before, and I’ll say it again: A fish rots from its head. And that head is Holder.
Behind the Scenes on MH370
A well placed source tells me there is more going on to the MH370 case than has hit the public news so far. And while I don’t usually pass on “rumors” this one has high creds due to my source.
The source tells me that the information comes from a communications engineer for a certain large aircraft manufacturing company:
– an aircraft’s hourly ‘ping’ beacon cannot be turned off from the cockpit or passenger areas. One must climb below deck to switch it off.
– The manufacturer knows for a fact that the aircraft flew for FIVE hours after losing radar contact due to the hourly beacon ping
– the aircraft made ‘several’ turns during its ‘missing time’ (not clear how the engineer knew this)
– the US provided this info to several regional national authorities two days ago, with no action
– the US Navy ship now reported steaming to the Indian Ocean is headed directly to the identified aircraft location
– satellites confirm the aircraft (or whatever remains of it) is stationary and possibly in ‘deep water’ with no suspected survivors
This information dovetails precisely with the White House announcement that a new search area is being opened in the Indian Ocean for the plane. US Navy craft going into the area would confirm the creds of my source on this, who has not be substantially wrong yet…Still, with stories like the Chinese reporting a land side seismic event, there is always the possibility that the source may not be right….
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One other airplane note: That off “prophetic dream I had 11-days ago came true last night in Philadelphia…more in the Coping section…
Quake Spotting
Following the string of quakes up and down the eastern edge of the Pacific Tectonic Plate’s Ring of Fire, we can’t help but notice that chatter about the dangers of a “big one” out West are making the rounds again,
As of press time, a 6.3 in the Japanese islands was the biggest deal overnight.
Deportation Bungloids
The Obama administration – caught in 2013 fudging deportation numbers to make it look like they were still going strong – is about to review practices to slow deportations to Mexico even more.
This, as the administration is looking to expand on its policy of not enforcing laws (passed by congress) that it doesn’t agree with…
I’ll leave it for you to discern when we cross the boundaries between imperial presidency to benevolent dictator, to hard dictator… Ignoring laws passed by congress or twisting the plainly written law is a good start, though, don’tcha think?
Pi Day!
Yes, today is 3.14.14…but next year will be close at 3.14.15 and the year after that? Well that will be the more properly rounded off 3.14.16…
Hmmm…Friday, huh? As good a day as any to get pi’ed…
