When the IMF says "caution" the big boys listen:
It is amazing how fast and furious the danger signals are coming in, and not just signals, but to the powers that be, credit deflation is the enemy is inside the gate.
So as problems go, this is big business in distress. Their back-up is gone, they are on their own. Their program of EZ Credit and crowd out the competitors is over. The Chinese in a major way and the Russians in a minor way are moving in. This has nothing to do with us, at the small business level, just that the big boys have to look out for themselves. GE dumps its government subsidized banking division.
Credit deflation is when people no longer believe the nominal value on the books tallied in credit. This building is on the asset side as $1 billion, and on the liability side elsewhere as one billion. Well, what if people proposing to do business with those holding such nominal valuations no longer accept those valuations? That building is not worth a billion, but 800 million, later 600 million, and on down. The big boys system seizes up, for who wants to borrow or lend against a asset whose nominal value will be in free fall?
What does this mean for you at the small business level. Ikea cannot get its economies of scale, it's factories will see order decline, excess production capacity forms, prices drop, while your relative costs drop but relative prices remain stable. This is all advantage small business.
The most boring election in history is coming our way: neither side can deliver anything the people want.
Feel free to forward this by email to three of your friends.
"Margin debt as a percentage of market capitalisation remains higher than it was during the late-1990s stock market bubble. The increasing use of margin debt is occurring in an environment of declining liquidity," said the IMF in its Global Financial Stability Report.
"Lower market liquidity and higher market leverage in the US system increase the risk of minor shocks being propagated and amplified into sharp price corrections," it said.
It is amazing how fast and furious the danger signals are coming in, and not just signals, but to the powers that be, credit deflation is the enemy is inside the gate.
So as problems go, this is big business in distress. Their back-up is gone, they are on their own. Their program of EZ Credit and crowd out the competitors is over. The Chinese in a major way and the Russians in a minor way are moving in. This has nothing to do with us, at the small business level, just that the big boys have to look out for themselves. GE dumps its government subsidized banking division.
Credit deflation is when people no longer believe the nominal value on the books tallied in credit. This building is on the asset side as $1 billion, and on the liability side elsewhere as one billion. Well, what if people proposing to do business with those holding such nominal valuations no longer accept those valuations? That building is not worth a billion, but 800 million, later 600 million, and on down. The big boys system seizes up, for who wants to borrow or lend against a asset whose nominal value will be in free fall?
What does this mean for you at the small business level. Ikea cannot get its economies of scale, it's factories will see order decline, excess production capacity forms, prices drop, while your relative costs drop but relative prices remain stable. This is all advantage small business.
The most boring election in history is coming our way: neither side can deliver anything the people want.
Feel free to forward this by email to three of your friends.
1 comments:
"Analysts claim that unlike the United States, Russia is interested in building a multipolar world based on balanced relations and mutual respect."
http://sputniknews.com/analysis/20150416/1020996807.html
The Russians are on to something here. I think that this is a good idea - something like "anarchy": No king. Nobody or no country can seize control and dominate the others and cause problems.
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