How absolutely amazing is that? And here I was concerned over the US increasing the government's debt from 5.5 trillion to over 12 trillion. If this keeps up the us creating debt could generate income!
How is this possible? The rest of countries excluding the US & China are looking at each other and realizing many of them are way way way worse than the US. Money is fleeing to us bonds as a safe haven to store wealth. Here is an example of how bad some countries are.
Iceland's top 3 banks have a combined DEBT greater than TWELVE times Iceland's GDP!
That means if Iceland stopped all debt spending, and dedicated the entire countries output to just paying the debt of only 3 of their banks, it would take decades to complete! Iceland, is obviously insolvent, and their population is starting to realize their own government has screwed them for generations to come.
Russia is yet another example, as oil depreciates, and the Russian economy gets pinched, their credit rating is depreciated, sparked in exodus from the ruble.
The bond event that occurred today is a sign we are in a DEFLATION collapse, not inflation. What I believe will eventually result is an odd hybrid between the two. A cost/material inflation, with wages and asset prices deflation. Hence why I am still in gold miners in a deflationary collapse. In any event a short read for history perspective is Japan's 10+ year economic depression with zero percent interest rate by clicking here.
Basically if you have no savings, you will get pinched by this fiscal crunch in the next two years. If you have tons-o-cash lying around, you can buy assets around the world for pennies on the dollar. And in my opinion, this deflation collapse just finished it's first act, and there is two more to go.
As for today's market action, resource stocks were strong even though the market pulled back. The long term view has not changed, DOW 10K is in the works, and then the deflation monster pulls the market into the depths of hell, DOW 6K or lower over the next two years.
Layoff conga line continues
Total layoffs for December hit 50K today and it's only December 9th!
Total job loss is over 2 million this year.
A video in honor of the panic mode some people have entered.