Or choose individually:
- Now This Is A Deflationary Collapse
- Goldman Sachs’ Big Round Trip
- Inflationistas On Life Support
- Why Getting Out Of Debt Won’t Be So Easy This Time Around
- Leading Indicators Fall Sharply To Lowest Level Since Last September
Dr. Copper's prognoses for the world economy is very grim.
Even as the market managed to produce some gains, the bellwether metal got crushed today, and over the last month its taken a monster loss.
How come? Well, growth fears, a surging dollar, and perhaps a real slowdown in China to name a few things. A return to recession in Europe isn't helping much.
Between the SEC charges, the criminal investigation, and the general strains on the banking industry, Goldman Sachs has gotten hammered.
In fact Goldman Sachs has now nearly round-tripped with today's 3.7% decline, trading just a few dollars above its 52-week high and its book value.
For those keeping close score: the 52-week low is 133.92. Today it closed at 137.36
It's getting pretty hard to argue that America is at risk of high inflation, especially after today's April consumer price data.
Despite some of the loosest monetary and fiscal policy America has ever seen, and even the current economic rebound, U.S. inflation appears more than merely under control... it's dying.
The chart below shows the year over year percentage change for both the overall U.S. Consumer Price Index (CPI) and the 'core' index stripped of food and energy costs.
One can see that core inflation, in red, is at the lowest level it has been since at least 2000. Total inflation, in blue is also trending downwards. Thus at its current level, the CPI data isn't quite showing deflation yet, but it is reporting clear disinflation (falling inflation). A few more months like April and we'll see literal deflation.
Sovereign debt concerns are ripping apart the eurozone at the moment, but member states may be able to take inspiration from the previous success stories of the U.S. and UK, according to this chart from Niall Ferguson's presentation on Sovereign debt.
Both the U.S. and UK were able to face up to their debt challenges and grow out of their debt crisis through the last century. But they also could take advantage of a period of global stability and high private and public growth.
Unless you envision a major global boom -- doubtful given demographic differences since then -- the only way out is austerity.