Black Hole
Posted by Ivo Cerckel on December 3rd, 2008
A Black Hole is a region of space-time from which nothing, not even light, can escape because gravity is so strong. (Stephen Hawking)
Gravity has still not been eliminated nor suspended.
The art of economics still consists in looking not merely at the immediate but at the longer effects of any act or policy; it still consists in tracing the consequences of that policy not merely for one group but for all groups.
(Henry Hazlitt, “Economics in One Lesson”, 1946
http://jim.com/econ/chap01p1.html )
Our Masters are now planning a second round of what they call injections of capital into banks and other gangsters.
(Recession Is A Reality; Second Stimulus
http://www.youtube.com/watch?v=HcbQb39u3N4 )
Others are still fantasising about deflation
How to avoid the horrors of ‘stag-deflation’
By Nouriel Roubini
Financial Times, Published: December 2 2008 19:53 | Last updated: December 2 2008 19:53
http://www.ft.com/cms/s/0/0fe65a48-c0a9-11dd-b0a8-000077b07658.html
SNIP
The US and the global economy are at risk of a severe stag-deflation, a deadly combination of economic stagnation/recession and deflation. UNSNIP
The fact is that the crisis is systemic and that everybody wants to sell what can still be sold.
Some are still hoping to escape the Black Hole of their debt mountains.
No way!
As Ambrose Evans-Pritchard writes in this morning’s Daily Telegraph:
The credit markets continued to exhibit signs of extreme stress yesterday.
The iTraxx Crossover index measuring default risk on low-grade European bonds punched above 950 for the first time. The investment grade index hit 188. The spreads are now flashing the sort of danger signals seen before the collapse of Lehman Brothers in September.
(Metal prices fall further than during Great Depression
The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.
By Ambrose Evans-Pritchard
Last Updated: 7:29AM GMT 03 Dec 2008
http://www.telegraph.co.uk/finance/newsbysector/industry/mining/3543370/Metal-prices-fall-further-than-during-Great-Depression.html )