The Keys to the Shadow Banking System: DEFLATION AND WORLD MONEY SUPPLY!

The Keys to the Shadow Banking System: DEFLATION AND WORLD MONEY SUPPLY!: THE PROBLEM WITH THE WORLD WIDE DELEVERAGING OF THE WORLD ECONOMY IS THAT THE MONEY SUPPLY CAN EXPAND THE GAP.  WORLD WIDE DEFLATION IS...

DEFLATION AND WORLD MONEY SUPPLY!

THE PROBLEM WITH THE WORLD WIDE DELEVERAGING OF THE WORLD ECONOMY IS THAT THE MONEY SUPPLY CAN EXPAND THE GAP.  WORLD WIDE DEFLATION IS THE DRIVING FORCE AND LARGE SUPPLY OF MONEY DISTORTS THIS WORLD EQUILIBRIUM OR NEW NORMAL.

AT THE LAST COUNT, THE THE COLLECTIVE ASSETS OF THE WORLD'S LARGEST THOUSAND BANKS TOTALLED $96.4 TRILLION. THE 10.9 MILLION HIGH NET WORTH INDIVIDUALS HAVE A COMBINED WEALTH OF $42.7 TRILLION AND IS GROWING AT 10 % A YEAR.  THERE ARE CURRENTLY 1,210 BILLIONAIRES WITH A TOTAL NET WORTH OF $4.5 TRILLION. CENTRAL BANKS CONTROL THE MONEY SUPPLY AND CLASSIFY THIS WITH MO, MB, M1, M2, M3. 

THE WEALTH OF NATIONS HAS TOTALED AROUND $150 BILLION NOT INCLUDING CENTRAL BANKS ELECTRONIC CREATED MONEY WHICH COUNTERACTS WORLD WIDE DEFLATION.  THE PARADOX IS THAT DELEVERAGING IS THE NEW NORMAL AND STILL HAS 5 YEARS LEFT TO REDUCE WORLD WIDE INVENTORIES.  CONSEQUENTLY, THE STOCK MARKET RALLIES ARE WEALTH RALLIES AND NOT ECONOMIC MARKET RALLIES.  THE WORLD OF STOCK MARKET WEALTH CREATES THE ZERO SUM WEALTH OF THE ECONOMY BUT CREATES THE REAL GROWTH OF WEALTH BY DYNASTIC FAMILIES.

Twillight of Crude Oil! OIL AT $40.OO!

THE DELEVERAGING OF THE WORLD ECONOMY HAS FINALLY HIT THE ACCELERATOR PEDAL!  OIL IS THE ULTIMATELY FINAL RESERVE OF THE WORLD ECONOMY.  THE OIL COMMODITY HAS BEEN USED AS A POLITICAL AND ECONOMIC WEAPON BY OPEC.  THEY HAVE BEEN ABLE TO STOP THE DELEVERAGING FROM 2008 TO 2014.  THE IDEA THAT OPEC CAN CORNER THE MARKET IS NOW BEING EMPIRICALLY TESTED BY THE WORLD WIDE SUPPLY GLUT.  THE SAUDI FLOOR IS AT $10.00 A BARREL AND CURRENT PRICE OF $80.00 ALLOWS A FLEXIBLE PRICE CUT OF $70.00 PER BARREL.  THE REAL EQUILBRIUM PRICE FOR OIL IS AT $35.00 A BARREL AND THIS PUT PRESSURE ON WORLD COMPETITORS ESPECIALLY IN THE UNITED STATES. THIS WILL NOT STOP USA PRODUCTION DUE TO FREE MARKET GENIUS OF AMERICAN INGENIUITY. THE WORLD WIDE EFFECT WILL ALLOW FOR LOWER PRICES AND NEW NORMAL ALLOW GASOLINE PRICES TO REACH AN EQUILIBRUIM PRICE OF $2.25 PER GALLON. THIS WILL NOT CHANGE THE 5 YEARS LEFT ON DEFLATION AND RE-EVALUATION OF ALL ASSETS ON THE BASIS OF A DEFLATIONARY INVESTMENT RUBRIC.  The D.I. rubric will create a new normal for the stock market at Dow of 10,000 and Gold at gold production cost at $1,104.00.  The interest rates will fall to 2.4% and housing inventory will result in a $30,000 deduction from housing prices. The Federal Reserve needs to put pressure on Commerical Banks to lend money on collateralized loans at low rates.  The artifical creation of demand for Bank money is the new normal in banking.  The Commerical banks need to create new  loan products for the business and consumer community.  These new loans and new credit cards need to increase the demand for Bank loans. Banks need to enter a new type of pay day loan collateralized by wages and salaries and use this to increase credit lines to 150% of collateral value. The same marketing strategies that created demand for real estate needs to be tested in selected markets and create realistic payback schedules for Business and Consumers.

STOCK MARKET COLLAPSE AT 15, 859!!

The stock market eclipse weekly decline of 333 points and this could go to 800 points in
the next two weeks.  Some the technical indicators suggest that we could experience a weekly
decline of 800 PTS!!

00 points for the next two weeks. The Close for Oct. 31, 2014 at 15,859.