Finally got around to watching this documentary on the weekend. I think everyone should. Complex issues but worthy of reflection. My take is that at this time of unprecedented technological surveillance ability, we need to carefully review where we wish lines of privacy to be maintained. It also seems clear that after years of evolving toward massive centralized conglomerates of all kinds–mega-corps and mega-governments–we must now focus on decentralizing too big to govern and move back toward smaller, more local, more manageable, more individually accountable entities that serve individuals and our communities rather than a handful of untouchable elites.

CITIZENFOUR is the never before seen, utterly riveting first-person look at how director Laura Poitras and journalist Glenn Greenwald first met with whistleblower Edward Snowden in Hong Kong where he gave them documents showing widespread abuses of power by the National Security Administration. It is an unprecedented fly-on-the-wall account of one of the most groundbreaking moments in recent history. Here is a direct video link.

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What’s (not) up with inflation?

Janet Yellen tried to sound confident yesterday that the US economy was strengthening and that the Fed would be able to exit crisis mode, and begin edging policy rates back up from (6 long years) near-zero within the next 6 months.  But then she also presupposed that the central bank will be achieving its target inflation rate of 2%…and there is no evidence of that so far.  At all.

Core US inflation since 1995

The consumer-price index, which measures what Americans pay for everything from shirts to haircuts, fell a seasonally adjusted 0.7% in January from December, the Labor Department said Thursday. From a year earlier, prices declined 0.1%. It was the first year-over-year decrease since October 2009. See: Gas drop drives US into deflation territory.

In fact when we consider the spillover effects from a rising US dollar (which is importing deflation from other export-desperate countries) and the deflationary impacts of falling commodities that are feeding into lower prices for many goods, on top of older folks buying less and debt levels stifling the masses, it’s pretty hard to see the inflation cavalry riding to the rescue any time soon here.  Today’s price pressures are looking positively anemic.

Good for struggling consumers to get a price break on goods and services…but bad for companies planning on growth…so bad for employment…and bad for individuals, corporations and governments (not just Greece) who are trying to repay loans on stagnant and falling incomes… so bad for banks who have lent obscene amounts. And positively horrifying for central banks who have helped to lead the world into this deflationary trap and find themselves for the first time ever, facing a global recession with no interest rate room to ‘stimulate’ growth and no credibility left.  The history books are unlikely to look kindly on their ‘genius’.

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Danielle on The Financial Survival Network

Danielle was a guest today on The Financial Survival Network with Kerry Lutz, talking about recent trends in the world economy and markets. You can listen to an audio clip of the segment here.  (unfortunately the connection was patchy in a couple of spots)

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Bloated Canadian finance shares looking queasy

Despite all the usual consensus happy talk, selling pressure has been dominating Canadian bank shares since last June, when the price of oil began to tank in earnest. Here is a one year portrait of the finance sector ETF (XFN).
XFN Feb 24 2015With oil breaking below $50 in January, Canadian economic indicators (that typically lag the price of WTI by 3 months, see Citi chart below) are likely to disappoint over at least the next couple of quarters.  (Hint:  Not yet priced into lofty Canadian stock prices, least of all the banks.)
Cdn economic surprise index

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When excessive debt deflates growth

Lacy Hunt’s Hoisington Review is something I look forward to each quarter. The latest 4th quarter 2014 review can be seen here. Hunt recently taped a discussion with Gordon Long which offers some worthwhile historical context and can be seen here: direct video link. If you find the volume low, you can increase it on the clip bar.

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The price of monetary madness

In a world where growth is scarce and prospects aren’t improving, an unspoken currency war has broken out. The short term pay-off might be a boost in exports, but, according to Bloomberg View’s Mark Gilbert, there can be no real winners in the end. Here is a direct video link.

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