The Debt Party is Over . . . .

[bucket]

The LIBOR (London Inter-Bank Offered Rate) rate is surging of-late. This is the rate banks lend between themselves.

A surging LIBOR rate is also an indication that global credit markets are tightening up. In 2008, the surging LIBOR rate seized global credit markets. This also had an immediate impact ocean freight as lack of credit dry-docked container ships.

Bottom line . . . If credit liquidity between banks begins to seize up, global trade slows, prices drop.

Suspect the VIX volatility index will continue to surge given these incoming uncertain credit market issues. This will have a direct impact on commodity prices. ie: further fallout in crude oil prices?

The central bank lifeboat has already sunk, so markets will have to figure it out on their own this time around.

Someone finds a new angle to keep the party going.....and I think 2008 had good grain prices....it also scrapped alot of smaller inefficient vessels on the ocean and created an economy for shipbuilding....

Too bad the boats contracted to come to the west coast to haul grain were not being loaded at lower rates and less demurrage...

[Rareearth]

So if interbank rates go up, and liquidity is the issue, expect interest rate hikes? Or will Trump actually be able to influence the Fed rate not too? If they hold rates and other countries increase the USD will go lower which is what Trump wants s well?

Does the CRB index follow or correlate with interest rates or crude pricing?


Lots of ? Marks I know,

[biglentil]

Grain prices will be strong at some point 1 billion Canuckstan bucks per bushel. The dollar isn't worth the paper its not printed on. The ones who have been trained in keynseyian economics who have had it all wrong up to now will be most in shock.

[checking]

GDR

I thought someone would take a stab at answering where you should invest your mad money.
My inclination is 1948 Canadian silver dollars, but watch out for the forged Chinese ones.

[errolanderson]

Ugly, ugly Asian markets overnight . . . U.S. stocks also under heavy fire.

Crude fallout? . . . Gold rallying.

[biglentil]

Ugly, ugly Asian markets overnight . . . U.S. stocks also under heavy fire.

Crude fallout? . . . Gold rallying.

Pot stocks clobbered too. Very very simple really, reversing quantitative easing is deflating the everything bubble. The fed took its foot off the gas pedal because its staring down the barrel of an overheated asset bubble and high inflation. Its an economy built on 47 years of funny money, the can can no longer be kicked down the road and the chickens are coming home to roost. The average fiat currency has a 40yr lifespan, with gross abuse of the printing press its surprising that its lasted thus far. Its not the fault of just one administration, though if I had to pin it on one, it would be Nixon who abandoned Bretton Woods gold standard in 1971.

Im out on crude stocks as economies fail won't be much need for it. Sure fuel will go to the moon when hyperinflation rages but an electronic certificate for Exxon won't do much good. Don't worry Trudeau spared Canada's last 77 ounces gold and sold the rest.

[AlbertaFarmer5]

Pot stocks clobbered too. Very very simple really, reversing quantitative easing is deflating the everything bubble. The fed took its foot off the gas pedal because its staring down the barrel of an overheated asset bubble and high inflation. Its an economy built on 47 years of funny money, the can can no longer be kicked down the road and the chickens are coming home to roost. The average fiat currency has a 40yr lifespan, with gross abuse of the printing press its surprising that its lasted thus far. Its not the fault of just one administration, though if I had to pin it on one, it would be Nixon who abandoned Bretton Woods gold standard in 1971.

Im out on crude stocks as economies fail won't be much need for it. Sure fuel will go to the moon when hyperinflation rages but an electronic certificate for Exxon won't do much good. Don't worry Trudeau spared Canada's last 77 ounces gold and sold the rest.

Why do you think that the can can't be kicked any longer? Not arguing, just asking, since I've heard this before, and it was successfully kicked substantially further than anyone thought possible every time.

[ajl]

The main reason that the can can't be kicked any longer is stagflation. That is what forced rates higher in the early 80's and what is doing it again today. Hence rate rise today. Anybody who thinks Canuckistan has a strong economy with a 50 per barrel WCS discount has gotta get off the cannabis. Sure the economy is more than just energy but not much more.

[foragefarmer]

Ajl

'Anybody who thinks Canuckistan has a strong economy with a 50 per barrel WCS discount has gotta get off the cannabis. Sure the economy is more than just energy but not much more. "

This is what CNR stated in the 3rd quarter report

"CN Rail said revenue from moving petroleum and chemicals climbed 25 percent in the three months ended Sept. 30, while revenue from grains and fertilizers rose 15 percent."

I guess management at CNR forgot to contact you for your expert analysis on the Canadian economy before reporting 3rd quarter earning!

You still living in Canada? I thought you were buying that CRP land in Montana.

[biglentil]

The main reason that the can can't be kicked any longer is stagflation. That is what forced rates higher in the early 80's and what is doing it again today. Hence rate rise today. Anybody who thinks Canuckistan has a strong economy with a 50 per barrel WCS discount has gotta get off the cannabis. Sure the economy is more than just energy but not much more.

Debt levels have soared since 2008, yet GDP has remained relatively stagnant even with negative real interest rates. Asset prices have exploded, but so has cost of living. Wages have remained flat. Thats not growth, standard of living has been falling. The market cannot bear an interest rate rise. QE was supposed to be temporary measure and now the market is waking up to the fact that it must be permanent. That really puts the fed in between a rock and a hard place.

[errolanderson]

Pension fund blowout is next up in the batter’s box . . . Like former Fed chair Paul Volcher stated this week. “We are in a hell of a mess” Unfunded U.S. pension funds now bankrupting many states.

Printing money has run-its-course (IMO). Central bank power is now greatly diminished since 2008. To me, deflation is the threat, not inflation. Central bankers can’t even say the word ‘deflation’ as their policies are bent on inflationary Keysian economics that have become increasingly ineffective.

[Rareearth]

Deflation, really?

That’s like asking teachers and nurses to take a wage cut. Never mind asking farmers to accept a carbon tax.