Crash Comparison 2009/12/30

This was looking way too positive for my taste, but extending it about two trading months makes it look scary again. To be clear, however, the predictive value at this point is very low.


Socionomics Watch—Finance is the Enemy

The Public's New Fear of Finance
Too many of the leaders of the world's largest banks, brokerage houses and other financial powerhouses don't get it.

They don't understand why the public is so angry at them and their paychecks. They cannot comprehend why elected politicians who used to court them are now so hostile. They don't see that they are widely seen as the ones who drove the world economy frighteningly close to the abyss of a second Great Depression.

Oh, they know they have a problem. They are, slowly, learning to sound grateful in public that taxpayer money was used, for good reason, to arrest the collapse of the financial system. "All banks are benefiting," says Robert Diamond, president of Barclays PLC, which didn't take government capital. They decry "excesses." But some act as if the past 18 months were a bad dream from which they have awakened; now they can go back to making money much as they did before.


Crash Comparison 2009/12/02

This isn't much of a comparison anymore...though the monthlies may still have some merit.

Forget Gold, Buy Garlic

Garlic beats gold as China's hot new asset
Shao Mingqing was a jobless young man from Shandong province with only a junior high school diploma when his luck turned around a few months ago with the skyrocketing price of garlic.

The 22-year-old Shao now drives an 180,000-yuan Toyota he bought with the money he made on the garlic market. Shao's face was lit up with joy when he talked about his recent success.

"I borrowed some money and decided to buy 100 tons of garlic at the price of 3.2 yuan per kilogram (kg) in September," Shao said. "I made a profit of 400,000 yuan from selling it at the price of 7.2 yuan a month later."
Is there a garlic bubble?
The soaring garlic prices are creating a frenzied mood among market speculators as they seek new opportunities to buy and store as much garlic as possible, betting the price will surge to a new high in coming days.

Rich coal mine bosses, according to some media reports, have also joined the garlic market, hoping to reap huge profits.

Some real estate speculators, who have earned big money in China's overheated property market, also are gambling on garlic, according to media reports.
Yes, there is a garlic bubble. The article mentions possible demand due to the health effects of garlic (garlic heavy dishes were popular during SARS) in light of H1N1 fears. But prices also fell to 0.08 yuan per kg last year, roughly the equivalent of $0.01, so farmers cut back production.

Still, I'm going to say that this is a decent indicator that China has plenty of credit.

S&P 500 Index in terms of Gold

We're back to levels seen last April. What does it mean? While I still lean towards deflation, this clearly illustrates what I'd expect to see in a high inflation environment: gold rising faster than stocks. Precious metals are the best asset to hold during hyperinflation.


It isn't the U.S. Dollar that's pushing gold higher. Maybe it's the North Koreans, who just saw their currency devalued 100:1?

Rich with gold sound bite


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