"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
While we wait for StatsCan to release new national economic monthly data beginning September 1st and for the various Canadian metro real estate boards to publish their sales and price data later in the week, here are a few charts (above) tracking inflation data. Since the 1980's inflation highs in Canada, the U.S., Germany and Japan the inflation trend has been falling and now flirting with negative rates. The MIT Billion Prices Project is indeed in a negative state Y/Y.
Governments and the private sector want inflation to offset the cost of converting debt into equity, but Mother Nature is not obliging. As I reported last June "We are leveraging the lowest priced credit for the most expensive non-productive real estate at the worst possible time in history.
Over at Bloomberg, Tom DeMark talks about the outlook for the Chinese and U.S. stock markets. "...we're heading into that period of the year when the market is susceptible to market declines September and October."
Chart Above: The biggest stock market declines since the 1980s:
“leaning against the wind” and “mopping up after”
From a monetary and macroprudential policy point of view, our findings help understand the trade-offs involved in the “leaning against the wind” and “mopping up after” strategies. We show that when credit growth fuels asset price bubbles, the dangers for the financial sector and the real economy are much more substantial. The damage done to the economy by the bursting of credit-boom bubbles is significant and long-lasting. Jorda, Schularick, Taylor, Leveraged Bubbles June 2015
OIL PRICE COLLAPSE of 2015 - Harry Dent
In 4Q 2001 & 1Q 2002 oil was below $20/barrel.
But as I have been reporting on my chart mashup of Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade; Canadian capital investment is flowing offshore to where the low labour rates are. Not only that but as I reported at the end of July in this chart mashup, the private sector is switching back to saving (hoarding cash) while Canadian corporate profits and GDP drop Q/Q.
Mortgagor Surveys in 2015
Workin' for a Livin' - Huey Lewis & the News - 1982
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense