Yep - And we will lie just like Japan. How's the S&P Chart the last 15 years.

The Euro just sets up any European country to be ass raped violently and repeatedly. The US, Japan and the UK will try to inflate into the deflation but asset prices are going to continue to go down despite their best efforts and this will allow big federal deficits for a long time. However, investors are not going to be so kind to state and local budgets. Look for any new deficit funding to start to come in senior to "owed" pension/healthcare obligations.

Due to the continuing drought , the price of this - could go up.

I find it laughable when literally every 5-10 days there is a CNBS headline...market declines on Spain worries..Grece worries...etc. What a joke; does it go away it that week and then suddenly come back? The market is more manipulated than ever. We need a REAL crash.

Gen,

Quote:

The liefest is coming to an end folks.

NO disrespect here, but methinks that you are too optimistic with that statement.

History shows us that the lies will continue to spew from the PA system of the Titanic as the ship continues to slip beneath the waves and the keel splits in two with a giant metalic screeching rip. The Captain will remain in his life boat wearing his life preserver, using his meagphone to tell his passengers that "All is well," and to "please remain calm!" The ships "progress" is steady and you will all be ok as long as you do as I say."



"THEY" will continue to lie up to and through the end. Not saying that the light at the end of the tunnel isn't another train headed towards us at 100 mph. Just that the engineer will keep telling us that it is sunlight.

I find CNBC very smug about all this, seem to think they are immune.

The great secret is that stimulus can only be done out of bank credit. How well positioned are Spain's banks to create more supportable credit? Looks to me like they have a capital flight problem there.

So, we are sold absurd solutions, like the bankrupt bailing out the bankrupt. Spain's banks have to be recapitalized for the rest of the world to accept their credit. Recapitalized by whom? This is the classic circle jerk, because France is up to its neck in Spain and the French banks are too big to bail themselves. So, the pile of **** has to be moved back to Spain or it piles up in Paris. I would imagine Douche is probably having their own nightmares, so the Germans have to figure out how to bail them as well.

Bubbles are all built on the expansion of credit. One that isn't doesn't have much of a life going up or down, merely blips on the screen. The government finance bubble, the housing bubble, the stock bubble, the social welfare bubble all have a huge amount of air in them, blown over the years by government/banker inflation. Being these bubbles have broken and taken a life on of their own, we are left with government to blow the next bubble. Double whammy, because they not only have to replace the inflation that was done on private property, but they have to continue their own inflationary trends and replace the air coming out of the broken bubbles as well. This is doable until the validity of credit is questioned across border or even between banks in the same country.

Who is going to fix Spain? Karl is right they need to balance their budget, but the problem is deeper than that. The problem is the whole world has financed their current expenditures out of future production. Stop the demand, the production collapses. We are seeing the result of decades of this policy, bought and paid for by Keynesian stimulus and central bank supported bank credit expansion into areas it didn't belong.

Outside of speculative bubbles, I can't think of a more damnable type of finance than consumer credit. There should never be a dime of bank credit tied up in consumer credit. This includes cars. There shouldn't be because once the consumers spending power has been hocked, we find ourselves in the end game. I had read several years ago that consumer financing started in the early 1920's. Was it a coincidence that corporate profits blew up, we had a stock bubble and then a recession that wouldn't end and became known as the Great Depression. Well, we have done it again, this time with China in the mix.

The China/US trade problems revolve around this consumer credit bubble. It isn't currency, it isn't subsidy. It is the fact that retailers can't pay US prices and sell to the consumer. We have to have this circle of consumer debt, cycled to China, into US bonds, back to the consumer. There isn't any other place the consumer can continue to enjoy his spending power. They can't afford to have this pulled down, but then again, nothing last forever on an exponential growth function.

Spain had its own big consumer spending game. I recall reading Doug Noland 6 or so years ago and he kept up with the various bubbles, Spain included. Spain was running a huge trade deficit, financed out of the credit going into the real estate boom, I am quite certain. This is of course the source of much of the US boom as well and we are merely watching Bennie and Obammer attempt to replace this free credit that vaporized here.

What is missing is the demand out of home finance. What will be missing is the demand out of the building bubble in China, which will transpose itself to all the commodity countries around the world before we are done, many of which have had their own bubbles. There is no country on Earth more exposed to the US consumer bubble than China. Throw in the fact it has its own internal bubbles, I expect a blood bath in a lot of areas.

Jones,

Now you know why I titled the threads on breaking, "Greece/Spain-SAVED or not SAVED!" Its all a joke....

I will believe it when I see it. The US market dies a long time ago, and isn't exposing anything.