Who called this deflation trade better than HORATIO CLAWHAMMER aka “The Fly”?
Instead of building on the recovery, the world has decided to take away stimulus and impose harsh austerity measures, in order to support “the big lie” that inflation is a risk that may hinder economic growth. Well congratulations, fuckface, you have all but guaranteed a double dip recession, by way of using the “how to fuck up the economy, fast as fuck” handbook, written in 1932. On top of that, the financial reform bill is a fucking travesty of epic proportions that will further knee cap our banks’ abilities to lend money.
But this is all by design.
Our elected officials tell tales of China owning the United Steaks, via large treasury holdings. They talk about the dollar going down, due to inflation. To solve these issues, they demand “fiscal responsibility,” by way of harsh budget cuts, just two years removed from the biggest credit crisis since Hannibal fucked up Rome. Well, the end result, much to the delight of our low IQ Congress people, will be deflation—effectively funneling money into U.S. Treasuries, a la Japan. I told you this would happen and here we are now: it’s happening.
Like Japan, our debt will be financed internally, providing the spreads are attractive for our fucked up banks. Without a doubt, the share prices of our banks are zombified and offer little to no upside.
If the world does not change course and reintroduce unbridled stimulus, we will be feeling the pain of the 2008 credit contraction with great vigor, very, very soon. The end game is Dow 7,000 or lower. We will have up days and rumors of resurgence. But rest assured, we are being led towards economic death.
Trade accordingly.
[youtube:http://www.youtube.com/watch?v=barLaHrtvoM 616 500]
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