Comments on: Finance throws sand in wheels of trade Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Youri Carma Wed, 17 Dec 2008 04:41:52 +0000 Seems like Bernanke is gonna be Bernankesan going the Japanese way – Zero Rates – quantitative easing – injecting more reserves.

Quote Bloomberg: ” The Bank of Japan has been the only major central bank in modern times to mix a policy of steep rate reductions with quantitative easing, or the strategy of injecting more reserves into the banking system than needed to keep the target rate at zero. Spur Growth – Japan’s central bank kept its main rate at zero from 2001 to 2006 while flooding the banking system with extra cash to encourage lending, spur growth and overcome deflation. The abundant funds failed to prompt lending by commercial banks, which expanded their reserves at the central bank almost nine times by early 2004.”

By: Don Tue, 16 Dec 2008 17:16:13 +0000 Strategists feel that forcing down interest rates frees up the money supply – since that is what all the text books say. But this is only looking at the demand-side of money. The demand-side guy says, “I want more money from you. I want more money because my rate of borrowing is less.” The supply-side guy says, “I’m not lending you more until you give me a better rate of return or your ability to pay improves.” Strategists who only look at one side of the equation, maybe because they only took introductory economics in high school, are accomplishing just the opposite of their objective. By reducing rates, they are restricting the availability of funds.

By: Youri Carma Sun, 14 Dec 2008 00:59:19 +0000 I like to add;

1 – Banks have no sufficient machine after the death of Lehman Brothers to get the money to businesses and consumers.

2 – Banks are simply not lending money to businesses (even not for the regular business done for years before) and consumers because that’s what banks usually do in this situation (said by some Dutch banker).

3 – Banks don’t trust each other so the Banking lending chain is broken and the money never reaches businesses and consumers.

4 – The American Central bank pumps money into the economy but never reaches the businesses and consumers cause after a day or so the put it back into Treasury paper stimulated by these special money funds who, after the dead of Lehman Brothers, are only allowed to invest in Government Loans. When such loans are created everybody wants to have them.

5 – Fear of deflation will make this situation even worse cause no bank wants to lend and no consumer wants to spend. Dead Lock!

6 – In addition the lower rates are not given to the consumers by the banks but they keep it themselves so consumers don’t want to lend at this higher rate when they know they should get lower rates.

By: Youri Carma Sun, 14 Dec 2008 00:38:18 +0000 ” deflation and inflation going hand in hand ”

Economic Forecast

In the Netherlands we already had some deflation on housing prices but nothing dramatic yet cause In some places the housing prices still went up causing a very mild deflation of 0,6% over all.

But the chairman of the board of Rabobank (btw; Rabobank took a share in Rothschild lately), Bert Heemskerk was tooting his horne according to his colleques cause he wasn’t suppose to warn the sheople about the more severe deflation (20%)coming up ahead. The funny thing about this was that in fact deflation already happened on the housing prices but so little that inflation surely caught up. And I think this will be the sign for the coming period namely deflation and inflation going hand in hand in attempt from the Greenspan clones to ease the transition to the next expansion, But as Eisenbeis said. “They’re not going to expand lending when they’ve got a problem of leverage.”

So, what is the backup plan here?

I think that will be the devaluation in case things get even more out of hand, but while everybody thinks to hear some music, in reality the orchestra has gone home houers ago but the ears are still zooming from the music, thats all.

Oil won’t stay low forever in fact when the demand will grow too rapidley oilprices will explode just like the gold as predicted by Citigroup and many others before cause many long term investments have been cut in half or diminshed drasticly, alottof long term future investments are not even made at all now which could harm future delivery of gas en electric energy all around Europa says Cap Gemini consultants for the EU energy organisation.

Rabobank is also warning us for a dollar collapse and since they are in bed with the Rotschilds I’ll guess they know ;)

Till that time we are going to see deflation and inflation trying to stay going hand in hand.