Juggling Dynamite

Not only are 70% of Americans earning less real wages, but they are more indebted, so spending power is much less than in 1979. This is why demand is weak. And no Central Banks can’t fix that. To the contrary, their lax monetary policies aimed at stimulating increasingly suicidal levels of debt and levered spending over the past 30 years have been a major cause of present financial weakness. The more they try to do, the worse these trends become. Here is a direct video link.

The Bank of Japan spooked another massive short-covering rally in global stocks today even while central banks are clearly not stimulating the global economy and deflation continues to haunt them with mounting downside to global revenues, GDP, emerging markets, currencies, earnings, over-valued stocks and commodities and a wide world full of highly indebted households, governments and corporations.

And last but not least, there is the pain deflation brings to precious metals, where gold and silver today fell to levels first breached in 2010 when ‘stimulus’ efforts were widely predicted to create run away inflation and the demise of the US dollar…

Bloomberg looks at gold as it pertains to the dollar, rising equities and tame inflation deflation.  Here is a direct video link.

Four of the big 6 Canadian bank CEO’s are cashing out this year at the top of the Canadian consumer credit bubble. After reaping a fortune working to ramp the country up in debt and financial leverage over the past 14 years, TD’s retiring Ed Clarke says he’s worried about Canada looking over the next decade. He also admits “I’m paid too much”, but will continue giving some to charity. Thanks Ed.  Here is a direct video link.

Here’s an update on the Canadian TSX broad market and its internals. With the energy sector crashing the past 4 months, the Canadian stock market is now being levitated (below its 2008 cycle peak) on its egregiously over-priced bank shares which now comprise more than 38% of the index market cap. But wait…financials are not a GDP-driving sector but a tax on the real economy…who’s going to drive growth from here as the resource sector is imploding back to its 2009 recession lows? Good question to ask.