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Sunday, July 22, 2012

Economics Degrading, what is up with Oil?

This post shows links to other blog posts news items as a basis for this view presented.
I encourage readers to click on links for detail on each macro item presented.

Trouble in the Eurozone as more countries come under citizen pressures.
Spain and Italy are both experiencing protests and a growing call to leave the Euro.
China unemployment higher than their government is reporting, china trade plunging.
Japans trade surplus drops a whopping sixty three percent.
Australia  real estate market collapse has begun.  Their collapse may be similar to US sub-prime repeat.
Euro-zone PMI steep rate of contraction, Germany signals steep slow down.
There are hints of a global collapse in auto-sales has begun.
The Germany is entering a legal gridlock in moving to a true fiat currency or participating in larger bail outs.
Twenty six states in US in severe drought, killing massive amount of food crops, a probable signal to higher prices.  Farmers slaughter cows in droves to avoid food price increase.
Oil prices are going parabolic, increased input costs in a slowing economy does not bode well.
France has increased their top tax rate up to 75% federal tax rate, rich flee in droves.  With the rich gone, finally France can prosper?

All of the above and more point to a global economic slow down and we are in a global recession.
I for one believe that we are.  Food and Oil may continue to rally, but I wait to see what precious metals do.
In a deflationary collapse any rally could overnight turn into a full out collapse, so any longs are riskier than normal.

The main question is will global central banks plan a monetary assault in an attempt to stop the deflationary collapse.  Even that is not a solution, for our debt based government system as a built in time bomb called bonds.

As for Oil, it is disturbing AS The economy slows down, the price is leaping higher.  If it collapses shortly, then not a big deal, just a short term rally.  If it is rising due to politics, or supply, we may have a real issue at hand.

For now, its wait and see.

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