Now I get it -it's been staring in my face for weeks:
You use the word deflation in an unconventional third way, not the economic sense of shrinking money supply, not in the populist sense of shrinking prices, but generally as shrinkage.
Shrinking real wages, shrinking house building, shrinking GDP, shrinking dicks.
Makes sense, although it should be properly agreed upon during a discussion.
You use the word deflation in an unconventional third way, not the economic sense of shrinking money supply, not in the populist sense of shrinking prices, but generally as shrinkage.
Shrinking real wages, shrinking house building, shrinking GDP, shrinking dicks.
Makes sense, although it should be properly agreed upon during a discussion.
altho it is still probable that my definition fits the traditional definition of shrinking money supply (monetary base+credit). the problem is i can't find any reliable figures on total aggregate debt over time, including shadow banking, and whether it is shrinking or not. that chart above of net shadow banking liabilities is a big hint as to what is going on, the question being, whether or not it is being adequately offset by increasing gvt debt and monetary base.
anyone?
Fair. Seeing the world overall, we have government debt creation in Japan and China. China is desperate to reduce debt ratios in businesses, but they can't, when they try they feel the pain with failing businesses all over the place. With money supply deflation, we should see falling prices. We have falling prices in gold and some capital commodities. Commodity prices are where we should expect it first, anyway.
gvt debt creation is a black hole of inefficiency and corruption. in this transition from increasing private debt to public debt accumulation, productivity is being destroyed. if the Chinese gvt is desperately trying to reduce debt ratios in private businesses, perhaps they should stop and look at themselves first; oh my, not gonna happen. this is called the heavy hand of regulation that is even more oppressing and destructive. think Ben Lawsky. actually, if you look at the prices of a variety of commodities, they have been falling along with oil since the beginning of the year. what will really be concerning would be a fall in financial speculative asset prices, like the stock mkt.
That's right, productivity is falling, the need for debt creation is rising exponentially. That is why the system will break. My guess is, something will happen in China, but it could really start anywhere. Cross dependensies are everywhere, nobody seems to know where their end of the line collateral for debt really is. Aluminium prices down in China could be the reason for a failed beer-producer in Europe. Or some butterfly. Is seems to drag out forever.
Or just economic sanctions. It seems like all the rage these days to teach thine enemy a lesson, just sanction some shit. Of course they are obligated to sanction something in return. Similar to military conflicts, which pit two or more economies in a war of attrition, a sanction simply reduces the value of those economies by limiting what they can do.
But like you said, dependencies are everywhere. We're all sitting in a spider web of the global economy, attempting to teach a lesson by cutting the strands between us. This results in falling productivity, as there is a smaller market and less incentive to produce, and the whole thing spirals.
The convenient thing about sanctions is that they have an excuse built in. Our economy tanks during the year that one or more "enemies" levied sanctions against us, and it's their fault, making them a bigger enemy, and justifying some more sanctions. But what do they ultimately accomplish? Are the citizens benefiting from their governments limiting who we can buy and sell to, or what kind of currency we can hold? What a silly notion.
So, while any of the economies in the world collapsing is a viable catalyst, let's not forget that they are also working diligently to make each other useless in the meantime.
