The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.
Sunday, February 28, 2016
Deflation (Poverty) Is Accelerating Out of Control
The 2008 mega-dunce response to global poverty was to increase the output gap...
Treasury yields with the casino
Global poverty is now predicting the price of oil Below is U.S. deflation (red) with oil:
Prior to 2008, they were not strongly correlated, now they're 1:1. In other words, the output gap that is self-evident in oil is manifesting itself across every part of the economy - oil, commodities, manufacturing, services aka. "wages".
But, but, but, the strong dollar is correlated to both deflation and oil. Right?
Not anymore. Deflation is now beyond what the (inverted) dollar (black) would predict. And hence oil above, is also below what the dollar would predict as well. The monster is off the leash...
All of which means that deflation is out of control. And the real deflation hasn't even arrived. Yet.