Interesting times

Kia Ora,

The Markets are all down. Many of the sovereign debt issues are just below the surface. A nudge could send the whole thing crashing.

What nudge? Well it could be  that soverign debt. Iceland has already collapsed & now won't pay outstanding debt. Greece can't get a loan from the EU, Italy, Portugal, Ireland & Spain are on the Brink of collapse or re arrange the names & it is beter know as the PIIGS.

Britain is not far off & the USA is actually selling junk bonds but rated as AAA, by the same people who said ENRON was safe.

Then just to to make it interesting China is taking action to slow inflation. That really caused people to get jittery.

Now there is talk about Peak Oil again.

What is Peak Oil & why is it important?

In Theory it means that the oil that is available has peaked & from now on there will be less & therefore the price will rise.

In Practice there is still enough oil around like the huge oil shale reserves in Canada though it is going to be harder to extract or a lot more costly to extract, causing the price at the pump to rise & alot of other items to rise resulting in inflation.

Already central banks are starting to raise interest rates to try & keep inflation down. This is despite actual inflation is well over 10% in many places, but the CPI's have being manipulated to hide the real numbers.

Then there is the fact that in many places there is also deflation as the stimulus packages slow to a stop. This will result in more bail outs & then more inflation.

Why the contradictions? Because each country is in a different part of the cycle.

Here in NZ it is customary for anything that happens in the US to take 12 to 18 months to have the flow on effect.

Again the smoke & mirrors are in progress trying to hide what is happening in the world.