SUSI WEEKLY UPDATE

Comments:

• If the Baltic Dry is any indication for the state of Global Trade than SUSI is hinting into the same direction with CHINA back on SELL
• Key tell will be the Fixed Income Market given that most of the excesses have taken place there. The action in the Equity markets pales against the action in Fixed Income (High Yield, High Grade, Emerging markets etc.).
  
  

You're asking why? Because this is a deflationary debt bubble that has just started to collapse. The Fed/ ECB etc are playing AGAINST THE GODS of our evil team Mr. Market and Mr. Margin.

Speak after me, as long as the MONEY VELOCITY collapses faster that the FEB/ ECB can grow high powered Money/ Monetary Base in a CREDIT ECONOMY (!!) Deflation will always overpower Inflation !! (because Leverage is nothing else then the fact that CREDIT is a large multiple of the Monetary Base of what we call combined the MONEY SUPPLY)

simple 1st grade math:

1) Money Supply = Credit + Monetary Base

2) CREDIT= Monetary Base * (Muliplier = 10) ; for the sake of the argument

3) Credit goes down by 6%, then the Monetary Base has to grow 6% * 10= 60% just to offset

4) Fed prints 50% => still Deflation !!

Bottom Line:

The next couple of weeks (October !) should show us the way...