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Recent Posts

Squeezing the Balloon

If you squeeze a balloon in order to make it smaller the amount of air in the balloon stays the same. The end you squeeze will get much smaller, but the area you do not squeeze will expand.

At the moment we have a global game of squeeze the balloon going on.

The countries faced with deflation [...]

Australia: Defying the Precipice

It has been eight months since the blog post, Australia: On the Precipice time enough for an update. At the time of writing that article I was making a prediction that money supply growth would reach negative territory by mid year, based on trends emerging last last year. This has not eventuated, as you can see by [...]

Australia: On the Precipice

The popular opinion if one is to believe the mainstream media and various talking heads is that Australia has missed the worst of the GFC and the future looks bright as Australia gravitates back towards ‘normal’ growth levels. The unseen opinion is that Australia is on the precipice of a debt deflation period, which will [...]

Deflation Case Study: Spain

Things are going so bad economically in Spain that the national pastime has changed from bullfighting to bearfighting. Now that I have that terrible joke out of the way, what are the prospects for deflation in Spain? It had been characterised, like quite a few other advanced economies, with rapidly rising credit and asset prices. [...]

The Balance Sheet Recession

In this interview Richard Koo set out his thoughts on the current GFC in a very succinct manner. I agree with him 100% up until the point he starts arguing for government stimulus to tackle the deleveraging.

My opinion is that he is exactly right that this event is a large scale ‘balance sheet recession’, which [...]