The real deflate-gate saga

Tom Brady’s football was better inflated than this global economy.

Every day this week we have seen a sovereign nation cheapen its currency.

Russia today cut its interest rate by 2 percentage points to “ease” inflation fears. Not sure how a rate cut can subdue inflation, but leave that as it may.

Since the Swiss moved the franc off the euro peg, 10 countries (I may have missed one so forgive me, but its the trend, not specifics) have altered monetary policy to alter their currency.

There is not a major economic power on this globe that is seeing inflation fear. The deflation stagnation spiral is rearing its head across the globe as growth continues to slow.

The price of crude is the first indication of slowing growth. It has little to do with a glut of new sources coming online and everything to do with lack of demand.

The US 10-year note at 1.7% yield is low because we are the “cleanest dirty shirt”? No we are the high on the street. Germany, UK, Japan are lower in yield. Even Italy, Greece and Spain are lower.

The US GDP for Q4 2014 comes in at 2.6%, which means for all of 2014 the economy grew at 2.4%. That’s pretty anemic given the amount of funds injected into THE BANKS, not the economy in 2014.

There is far less likelihood that the Fed can move off the patience platform anytime soon given a holiday quarter at 2.6% after QE4 wound down. No escape velocity to this number. US can’t stand on its own without ZIRP.

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