Tag Archives | deflation

China PPI Mar15

China exports deflation to the West

Unfortunately, the European Central Bank (ECB) does not read the blog, or yet subscribe to ‘The pH Report’.  If it did, it would have been forewarned back in August that a collapse in oil prices was potentially about to provide the catalyst for the arrival of deflation. Instead, as the Minutes of its critical January […]

Continue Reading

Japan’s government debt now $100k per person

Debt, debt, glorious debt,      Nothing quite like it for cooling the blood.      So follow me, follow, down to the hollow                                                             And there let us wallow in glorious debt  (apologies to Flanders & Swann) It seems impossible today, but until the year 2000 most Western countries were reducing their debt burdens.  Thus President Bill Clinton boasted […]

Continue Reading

Rising life expectancy enabled Industrial Revolution to occur

Living standards have risen 20-fold over the past 200 years.  Yet they rose just 3-fold over the previous 800 years.  What enabled this dramatic change to take place? The key event was clearly the Industrial Revolution.  As Andy Haldane, chief economist at the Bank of England, notes in a thought-provoking new paper: “In explaining rising living standards since […]

Continue Reading

Global shipping index hits all-time low

The world’s major shipping index, the Baltic Dry (BDI), has collapsed by 2/3rds since November, and by 80% since its earlier December 2013 peak, as the chart shows.  It is now at an all-time low of 509, almost half of its initial 1000 level when established in January 1985. Shipping is the major mode of transport for world trade, […]

Continue Reading

Deflation gains: China’s plastics market sees over-capacity

More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]

Continue Reading

Oil market faces “historic shift” – International Energy Agency

The above chart highlights one major reason behind my forecast last August that oil prices were about to collapse.  This was that US inventories were so high, storage was starting to run out: Inventory had reached all-time record levels, and was at around 60 days of sales (blue area) And so prices simply had to fall, to […]

Continue Reading

The great ‘Deflation Shock’ is coming closer

  The world is about to be hit by a demand shock equivalent to 1973′s supply shock.  Yet, astonishingly, most commentators remain so focused on central bank activity, that they have completely missed what is happening.  Here’s how it is playing out. You may remember the ‘The pH Report‘ forecast in early December that: “Oil prices […]

Continue Reading

G7 births in 2013 equal Great Depression year of 1933

In 2013, there were fewer births in the G7 countries – responsible for nearly 50% of the global economy – than in any year since the Great Depression year of 1933.* As the chart also shows, 1933 was an exception.  Births bounced back immediately afterwards.  But the low figure in 2013 is part of the declining trend seen since […]

Continue Reading

The China middle class myth moves us closer to protectionism

Believing conventional wisdom can destroy your profits.  One example is playing out in the oil market before our eyes. Another example is the myth that China was about to become middle class.  Yet income levels always made this impossible: More than 9 out of 10 Chinese earn less than $20/day By comparison, the basic state pension in the UK is 25% higher, at over […]

Continue Reading

Why did nobody else forecast that the oil price would collapse?

Brent oil prices closed at $104.71/bbl on Friday 15 August.  On the following Monday morning, I published the first post in my Great Unwinding series, arguing that: “The Great Unwinding of the failed stimulus policies since 2008 has now begun…oil markets are starting to follow cotton and other commodities in refocusing on the fundamentals of supply and […]

Continue Reading