By Peter B. Meyer – 15th of February 2012

“We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. - The worst-case scenario is a collapse of the financial system.”

"The magnitude of developed world’s indebtedness and trade deficits suggest that the US and EU will eventually wind up with double-digit interest rates and hyperinflation."

"This is the kind of environment where gold often outshines all other asset classes,"

Those are the frightening conclusions from three experts.  Read More Here

By Peter B. Meyer – 5th of February 2012

Credit expanded for half a century. The Bubble Era at its end caused trillions of dollars worth of errors. Many of those errors have already been corrected. But the bubbles that were built remained unresolved. Exporting nations had gotten into the habit of earning net sales from the U.S.A. and the EU of over $3 billion per day. Those earnings provided much of the speculative capital that created the Bubble Era prices, with money that was kept too cheap for too long by the Feds and other central banks. Meanwhile this money has disappeared in thin air.

Instead of a healthy new boom, the world is enjoying a sick reverberation of the previous economic era. Governments, led by the U.S.A., attempt to re-inflate the bubble with guarantees and giveaways equal to an entire year's annual output of the world's largest economy. Since every dollar of this money is borrowed, it makes the implication that every dollar has to be withdrawn from the world economy at some point.  READ MORE HERE

BVB Borussia Dortmund, after a slow start against a feisty Nuernberg side, edged ahead three minutes into the second half with a goal by Sebastian Kehl.  Barrios secured the win in the 82nd minute.  The win secured Dortmund the top spot in the Bundesliga.  After the Matchday opener on Friday, all eyes were on FC Bayern and Schalke 04.  Obviously the pressure was on them.  Schalke hosted a Mainz side that came out to win with hopes of repeating last week's performance.   Mainz scored an early goal by Zidan, but it wasn't enough to secure a win.  Obasi tied the game for Schalke in the 59th minute, saving Schalke one point.  READ MORE HERE

The U.S. economy added 243,000 jobs in January, considerably higher than the 150,000 expected.  The new jobs figures also dropped the unemployment rate to 8.3%.  The new figures, of course, do not include the 2.8 Million Americans, who have dropped out of the workforce and are no longer looking for work.   In contrast the Canadian economy has added only 2,300 jobs, fewer than expected, edging the unemployment rate to 7.6%.  As a consequence of today’s U.S. job figures the markets should do extremely well.

Despite U.S. job figures, there are still hard times ahead.  42.9 million Americans are long term unemployed or 5.5 million.  The Labor Department also revised November’s job figures from 100,000 to 157,000 jobs created.

The jobless rate, which sits now at 8.3% is the same as it was in February 2009, the first full month of the Obama Administration. Broken down further, the rate for adult men is 7.7%, blacks 13.6%, adult women 7.7%, teenagers 23.2% and Hispanics 10.5%.  READ MORE HERE

By Peter B. Meyer  - 11th of February 2012

Stagflation in the economy is a persistent high inflation combined with high unemployment and stagnant demand.

Inflation destroys consumer purchasing power. The creation of money and credit does not create prosperity. It's a form of taxation on the consumer. "Stimulus spending typically creates the short-term illusion of prosperity at the long-term price distortion, ruining the economy and debase the currency."

"Stagflation is the type of inflation typically caused by an expansion of the money supply and bank credit ahead of gains from productivity and asset growth. More money and credit chasing fewer goods and services typically means higher prices over the long run." This is the kind of inflation that we have been subjected to first by Greenspan and now by Bernanke of the Fed followed by all other Central Banks of the world.  READ MORE HERE

Second Divison's Greuther Fuerth eliminated Hoffenheim, Dortmund convincingly defeated Holstein Kiel, FC Bayern without Robben and Schweinsteiger (after 17th minute) defeated VFB Stuttgart in the Daimler Benz Arena, while Gladbach required overtime to defeat Hertha BSC Berlin 2:0.  

The only surprise of the day was the defeat of Hoffenheim by a strong Greuther Fuerth.  Munich played a strong game in Stuttgart, keeping their hopes of triple crown alive.   How soon Schweinsteiger will return to the team will be determined tomorrow.  READ MORE HERE

By Peter B. Meyer – 8th of February 2012

"Deflation is a structural, and not a monetary phenomenon." Deflation occurs when prices are declining over time. This is the opposite of inflation; when inflation rate is negative, the economy is in deflation.

Causing a decline in general price levels, often caused by a reduction in the supply of money or credit. Contraction in spending, either by government, or private sector, consumers, can also cause deflation. Deflation often goes together with increasing unemployment due to the lower level of demand. Deflation punishes investments that can raise people from poverty, both personal investments, and business growth.

In our private consumer lives, we all are for deflation. In fact, we look around to find ever-lower prices. We reward businesses like LIDL, ALDI, Wal-Mart and Dell who can sell us things we want at prices lower than paid before. Their sales increase even as the prices we pay decrease.  READ MORE HERE

As the United States and NATO are actively pursuing an end to the war in Afghanistan and an end of combat operations in 2013, soldiers are still being killed in the war torn country.   Hamid Karzai is pursuing direct talks with Taliban leaders.  What is not clear, is whether the Taliban top leadership is involved in the peace talk pursuit.

The U.S. Administration is deliberating on moving up to five Gitmo detainees to a prison in Qatar as a gesture of good will.   The danger with all these announcements by the United States and NATO is that the Taliban has been handed a timetable and just has to wait for the departure of NATO in 2014.   There is also serious concern that Afghan Security Forces are capable to conduct operations against insurgents.  Knowing the history of Afghanistan, it is hard to fathom that the Taliban would be satisfied with power sharing.  READ MORE HERE