Trouble has spread…Inflation and Deflation Are Now Globalized

Greetings,

Do you know why poverty is spreading? It’s because this is the great day of judgment and separation. Allah is breaking the economic, industrial, scientific, and military power of the white world. This means that most everyone will be touched by this.

The World (under the rule of the white race) that we have been living in had a duration of time of 6,000 years. We have been living in The World for the duration of her time, and now her time is up. We are at the end game for her so there will be plenty of suffering.

So, therefore, The World (of the white race) is filled with confusion and they do not know what to do themselves. How can they when they are in total derision? The entire world is now in the grip of God and He will force His will upon everyone.

Why We’re Poorer: Inflation and Deflation Are Now Globalized

by Charles Hugh-Smith

We’re being hit with a double-whammy: Wages are under deflationary pressure, and almost everything else is exposed to inflationary pressure.

As correspondent Mark G. observed in Globalization = Permanent Instability, it’s impossible to understand inflation and deflation now except in a global context.

But since grain is tradable, i.e. it can be shipped to other markets where demand and thus prices are much higher, the price in North America reflects supply and demand everywhere on the planet, not just in North America.Now that prices for commodities such as oil and grain are set on the global market, local surpluses don’t push prices down. If North America has record harvests of grain, on a national basis we’d expect prices to fall as local supply exceeds local demand.
If we put ourselves in the shoes of a farmer or grain wholesaler, this is a boon: why sell your product for 1X locally, when it fetches 2X in other countries? You’d be crazy not to put it on a boat and get double the price elsewhere.

As the share of the economy exposed to digitization increases, so does the share of work that can be done anywhere on the planet. When work is digitized, it is effectively commoditized, meaning that it no longer matters who performs the work or where they live.

If people in countries with low wages can perform the work, why on Earth would you pay double to have high-wage people do the work? It makes no sense. Taking advantage of the differences in local pay scales is called labor arbitrage, as the employer is trading on (i.e. arbitraging) two sets of prices.

It’s not just labor that can be arbitraged: currency, interest rates, risk, environmental regulations, commodities–huge swaths of the global economy can be arbitraged.

The basic idea of the global carry trade is to borrow money cheaply in a currency that’s weakening and use the money to buy low-risk, high-yield assets in currencies that are gaining in relative value.

It’s a slam dunk arbitrage: not only does the trader earn an essentially free return (borrowing yen at 1%, for example, converting the yen to dollars and buying Treasury bonds paying 3%), but there is a bonus yield on the dollar strengthening against the yen: a two-fer return.

Global labor is in over-supply–one reason why wages in the U.S. have been declining in real terms, i.e. when inflation is factored in. The better description ispurchasing power: how much can your paycheck buy?…MORE HERE
Read more at http://investmentwatchblog.com/why-were-poorer-inflation-and-deflation-are-now-globalized/#mRxqR7PJhAWlSj0U.99

Click here for reuse options!
Copyright 2014 Hiram's 1555 Blog