The Global Economy In Giant Deflation Black Hole

Gifts galore boost flagging unit sales

"Developers are slashing apartment prices and handing out tens of thousands of dollars in incentives - including rebates, cars, furniture and holidays - to lure buyers into Melbourne's new-unit market.

While many industry players say the offers are good news for buyers, others worry that the discounting could fuel a ''race to the bottom'' that could harm property values.

The incentives come as developers face competition from a soaring number of off-the-plan unit developments and a drop in demand after the state government announced it would cut the first home owners grant in May."

Empty auctions: 'op shop' listings

"IT is a home owner's worst nightmare. What if you put your house up for auction but nobody turned up? Not even the neighbours for a stickybeak?

Well, that happened at the weekend, with agents from Hocking Stuart and Buxton real estate left standing alone in the pouring rain.

Auctioneers put their hammers away for two houses in Elwood, with the owners deciding to cancel at the last minute due to no interest at all. In all, eight auctions were put off.

Auctions are a favourite Melbourne pastime, but it seems the market slump has even the nosey parkers preferring to watch the Olympics indoors. In more than 100 other instances this weekend, houses were passed in on a vendor's bid."

Morphine-Injected Economy: Patient Remains Bed-Ridden

"But here's what a former Treasury Department senior official told CNBC on July 18:
 
QEs are like morphine. It makes you feel better, makes the headlines look better, pushes up risk asset prices but doesn’t translate into real economic growth.
 
Another round of quantitative easing will only delay the inevitable economic pain.
 
As Bob Prechter recently observed:
 
Since 2007, the Fed has monetized $2 trillion worth of debt; the federal government has borrowed another $7 trillion; and it has pumped out $1 trillion worth of student-loan credit.
 
In the long run you can’t fight a systemic debt overload by piling on more debt. The Fed and the government are shifting the burden of trillions of dollars’ worth of debt obligations from reckless creditors onto innocent savers and hapless taxpayers...Perhaps this policy temporarily prevented a series of big institutional disasters, but it was only at the ultimate price of a gigantic public disaster.

The Elliott Wave Theorist, July 2012
 
The evidence suggests that the previous QEs have failed and deflation is taking over.
 
So says the Washington Post on July 27:
 
US economic growth slowed to 1.5% in last 3 months"
 

Bernie Sanders Calls Federal Reserve "Socialism for the Rich" After $16 Trillion Secret Bail-Outs, Including Foreign Banks.

"Senator Bernie Sanders at his official website reports:

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else.""

The Terrible Economy and the Anti-Election of 2012

"The worst economy since the Great Depression and you might think at least one of the candidates would come up with a few big ideas for how to get us out of it.

But you'd be wrong. Neither candidate wants to take any chances by offering any large, serious proposals. Both are banking instead on negative campaigns that convince voters the other guy would be worse.

President Obama has apparently decided against advancing any bold ideas for what he'd do in the second term, even if he has a Congress that would cooperate with him.

He's sticking to a worn script that says George W. Bush caused the lousy economy, congressional Republicans have opposed everything he's wanted to do to boost it, it's slowly on the mend anyway, the Bush tax cuts shouldn't be extended for the rich, and we shouldn't take a chance electing Romney."

The [Spanish] Government will not pay this month to hospitals or private centers

"The extreme situation experienced by the Generalitat of Catalonia, which last week announced that come to the rescue of the state's regional liquidity , and has a direct impact on public services financed by the Catalan government. The Government can not tackle this month payments from the concerts he has with hospitals, schools, residences, social organizations, children in care centers and workshops. These are the services provided by entities, public and private, funded by the Government but managed not depend on it.

The Department of Economics on Monday refused to quantify the exact amount of unpaid, amounting to several hundred million euros. Only concerted public hospitals, serving more than half of the Catalan population, the Government will stop paying this month 345 million euros. This would add about 70 million in social services and seven more in schools , according to estimates by industry and this newspaper made ​​from the budgets of the Departments of Social Welfare and Education. The Government is committed to resume payments the month of August, but have not wanted to commit to a date to settle the outstanding debt of July."

Posted by Mary Filed in The Economy Created: August 1st, 2012
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