The theme for the coming week is "unintended consequences." The developed world has been in the midst of a manic binge of overconsumption for quite some time. Just like with an individual person, prolonged extreme mania is often followed by a severe depression (after the extreme mania of the 1920's, the depression of the 1930's naturally resulted). World governments have done their best to forestall an economic depression by continuing to pump "stimulus money," the economic equivalent of adrenaline, into the global system. To not have done so would have been catastrophic. Yet, is it possible that they just traded in one set of problems for another? How long can one keep going on stimulants without some sort of breakdown? Should we expect anything less drastic from something as complex as the current world order?
The indications for the coming week are for an extreme surge in inflation concerns. While this could be a final surge before deflation sets in for a time, the strength of it could still be quite alarming, especially to those who pay attention to such things on a daily or weekly basis. The likely manifestations to go along with this are a sharp spike back up in gold, silver, and other commodities; a decline in the U.S. Dollar; a dramatic sell-off in U.S. Treasuries; and diminished confidence in the U.S. government, and the global system as a whole.
Dec. 14 - 20: Sharp sell-off in U.S. Dollars and/or U.S. Treasuries. Inflation concerns skyrocket. Global system appears to be breaking down. Diminishing confidence in the U.S government. (MoodCompass, Dec. issue, pg. 2).
Sunday, December 13, 2009
Sunday, December 6, 2009
Will Increased Violence hurt Copenhagen?
Dec. 7 - 16: Directed Volatility, Outrage Violence is on the increase, and possible displays of discontent or civil unrest. (MoodCompass, Dec. issue, page 10).
There has already been a lot of skeptical press about the futility of Copenhagen. As desperate as the situation is, as serious as the threats are to the planet, there is little liklihood that any government will be willing to bear the political costs of actually insuring that the kinds of cuts required will actually be made. Climate activists and others who are aware of how serious the situation is, are feeling increasingly desperate.
The Copenhagen climate talks begin on Monday December 7. Social mood projections are for increased violence, protests, and civil unrest beginning on the same day. While outbursts of outrage could show up anywhere on the planet, I have to wonder whether these two factors will intersect in Copenhagen. If they do, will it help draw attention to the climate change problem, or will it only distract from the business at hand? Is there anything that anyone can do that will actually cause needed changes to take place? Important questions that need to be answered.
On the positive side, at least for Copenhagen, our social maps for the month show that increased violence or civil unrest is most likely in Mexico, the U.S., Pakistan and India. The risk is also somewhat elevated in Russia (we have already seen some of that this month). Best wishes for a fruitful and peaceful event to both delegates and protesters in Copenhagen.
There has already been a lot of skeptical press about the futility of Copenhagen. As desperate as the situation is, as serious as the threats are to the planet, there is little liklihood that any government will be willing to bear the political costs of actually insuring that the kinds of cuts required will actually be made. Climate activists and others who are aware of how serious the situation is, are feeling increasingly desperate.
The Copenhagen climate talks begin on Monday December 7. Social mood projections are for increased violence, protests, and civil unrest beginning on the same day. While outbursts of outrage could show up anywhere on the planet, I have to wonder whether these two factors will intersect in Copenhagen. If they do, will it help draw attention to the climate change problem, or will it only distract from the business at hand? Is there anything that anyone can do that will actually cause needed changes to take place? Important questions that need to be answered.
On the positive side, at least for Copenhagen, our social maps for the month show that increased violence or civil unrest is most likely in Mexico, the U.S., Pakistan and India. The risk is also somewhat elevated in Russia (we have already seen some of that this month). Best wishes for a fruitful and peaceful event to both delegates and protesters in Copenhagen.
Friday, December 4, 2009
December 2009 - Spending Sprees and Hangovers
Below is an except from this month's MoodCompass:
- - -
Since September, the global mood has been in a process of peaking optimism within a larger downturn (that is still only just beginning). It has been difficult for many to truly believe in an economic recovery, but more and more have decided to embrace it whole heartedly. While efforts to keep the global consumption machine moving have been no less than heroic, they cannot much longer forestall the inevitable. Trying to spend one’s way out of a situation that resulted from over consumption and over spending in the first place is like trying to pick oneself up by one’s own boot straps. Eventually, the result is falling on one’s face. The topping process in the markets and the recovery is nearly complete. This month is a glimpse at some of the unintended consequences that have been purchased in an attempt to continue to keep the global wheels turning at an unsustainable pace.
Beginning with the second week of December, geopolitical concerns are on the rise. Key global players such as China and the United States may be less than cooperative with each other; Russia may be at odds with Eastern Europe; and we must not forget the wild cards—Iran and N. Korea which may add renewed trouble to the global balancing act at a moment’s notice. Displays of discontent or unrest are more likely on a global scale, and incidents of violence may be seen to be up as well. In the middle of the month, there are indications that inflation concerns will rise dramatically. This should be accompanied by either a sharp sell-off in U.S. Dollars, U.S. Treasuries, or both. Concurrently, confidence in the U.S. government will diminish, and there may be worries that the global system is breaking down. Immediately surrounding the Christmas holiday there may be some relief. However, as the New Year begins, geopolitical worries and systemic risks again come to the foreground as noteworthy threats to the fragile house of cards that have been so carefully stacked in place.
- - -
http://anewstory.org/moodcompass.htm (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)
- - -
Since September, the global mood has been in a process of peaking optimism within a larger downturn (that is still only just beginning). It has been difficult for many to truly believe in an economic recovery, but more and more have decided to embrace it whole heartedly. While efforts to keep the global consumption machine moving have been no less than heroic, they cannot much longer forestall the inevitable. Trying to spend one’s way out of a situation that resulted from over consumption and over spending in the first place is like trying to pick oneself up by one’s own boot straps. Eventually, the result is falling on one’s face. The topping process in the markets and the recovery is nearly complete. This month is a glimpse at some of the unintended consequences that have been purchased in an attempt to continue to keep the global wheels turning at an unsustainable pace.
Beginning with the second week of December, geopolitical concerns are on the rise. Key global players such as China and the United States may be less than cooperative with each other; Russia may be at odds with Eastern Europe; and we must not forget the wild cards—Iran and N. Korea which may add renewed trouble to the global balancing act at a moment’s notice. Displays of discontent or unrest are more likely on a global scale, and incidents of violence may be seen to be up as well. In the middle of the month, there are indications that inflation concerns will rise dramatically. This should be accompanied by either a sharp sell-off in U.S. Dollars, U.S. Treasuries, or both. Concurrently, confidence in the U.S. government will diminish, and there may be worries that the global system is breaking down. Immediately surrounding the Christmas holiday there may be some relief. However, as the New Year begins, geopolitical worries and systemic risks again come to the foreground as noteworthy threats to the fragile house of cards that have been so carefully stacked in place.
- - -
http://anewstory.org/moodcompass.htm (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)
Tuesday, December 1, 2009
Spending Sprees and Hangovers - December 09 Videocast
December highlights: Increased global tension, U.S. Dollar or U.S. Treasuries sell-off, increased discontent or unrest, and possible California earthquake. A global mood "weather forecast" for December 2009.
Friday, October 30, 2009
November 2009 - Desperate Measures
Below is an except from this month's MoodCompass:
- - -
There is a sense of desperation to the month of November which is likely to challenge world leaders to find new and creative solutions to long standing problems. There are economic concerns that “stimulus” has not yet been able to make go away, and chronic geopolitical issues that continue to go unresolved. In the first half of the month, the primary focus is economic and currency issues. There may be one last big panic over the fate of the U.S. Dollar, after which it should continue to show new strength. As the seriousness of the economic situation begins to become clear, inflation worries will be replaced with concerns about deflation, and global markets could see a sharp, but likely brief, sell-off. The yet unresolved unemployment situation may require new and innovative responses from federal and state governments.
The focus shifts in the second half to the world arena. A polarization develops between “good guys” and “bad guys” (the identification of the good guys and bad guys would be in the eye of the beholder). There is a societal sense of righteousness and unity against an enemy or cause. While it would make sense that a specific event would cause such a response, there is no direct indication as to whether such an event is likely to occur or what it might be. Because there appears to be some relationship to this polarization with the energy markets, there is a good possibility that it involves Iran and possibly Russia.
- - -
http://anewstory.org/markets/Nov09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)
- - -
There is a sense of desperation to the month of November which is likely to challenge world leaders to find new and creative solutions to long standing problems. There are economic concerns that “stimulus” has not yet been able to make go away, and chronic geopolitical issues that continue to go unresolved. In the first half of the month, the primary focus is economic and currency issues. There may be one last big panic over the fate of the U.S. Dollar, after which it should continue to show new strength. As the seriousness of the economic situation begins to become clear, inflation worries will be replaced with concerns about deflation, and global markets could see a sharp, but likely brief, sell-off. The yet unresolved unemployment situation may require new and innovative responses from federal and state governments.
The focus shifts in the second half to the world arena. A polarization develops between “good guys” and “bad guys” (the identification of the good guys and bad guys would be in the eye of the beholder). There is a societal sense of righteousness and unity against an enemy or cause. While it would make sense that a specific event would cause such a response, there is no direct indication as to whether such an event is likely to occur or what it might be. Because there appears to be some relationship to this polarization with the energy markets, there is a good possibility that it involves Iran and possibly Russia.
- - -
http://anewstory.org/markets/Nov09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)
Friday, October 23, 2009
On The Brink - November 09 Videocast
The Global Mood "Weather Forecast" for November 2009. US centered economic chaos, Military display(s) of force, Hawaii event, and more swine flu are the highlights.
Sunday, October 18, 2009
Is the Dollar Really Dead? Don't Fall For It!
Many have been discussing the Dollar's demise. There have been panic sell-offs of Dollars in the forex market, and U.S. Treasuries are being abandoned wholesale. Yet, this is the kind of extreme in sentiment that most often occurs at a market top or bottom. It's true that the U.S. government is borrowing unprecendented amounts of money. It's true that some countries including China, the U.S.'s primary creditor, is exploring alternatives in reserve currencies. However, as much as China, Russia, Iran, and other nations might wish there were another place to turn, the global system is intricately complex, and rests on a foundation based in debt and U.S. Dollars. Things can not safely change that fast. Also, as global anxiety climbs, and people are once again forced to liquidate assets that are primarily priced in Dollars, the U.S. currency will rise in value against the "commodity" currencies.
Even if there is still one more brief, but possibly extreme panic, holders of the U.S. Dollar will once again find their currency gaining in favor. Inflation worries will be a spector of the past, and deflation will once again be the primary concern. We've been here before. This is what it looks like at a social mood top, as markets in general begin to break down once again, and as Treasuries and the U.S. Dollar are sought as "safety." The Dollar may indeed collapse at some point, and inflation may very well soar to unbelievable heights as resources become more scarce. However, for now, and perhaps for some time to come, the Dollar may find support as the Great Recession continues to play out, and the spectre of Depression once again begins to lurk in the shadows.
---
Excerpt from the October 2009 MoodCompass:
October 19 – 25: A Solution? U.S. government crisis resolved one way or another. U.S. Dollar declines sharply. Inflation concerns up sharply.
From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the October MoodCompass: http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).
Even if there is still one more brief, but possibly extreme panic, holders of the U.S. Dollar will once again find their currency gaining in favor. Inflation worries will be a spector of the past, and deflation will once again be the primary concern. We've been here before. This is what it looks like at a social mood top, as markets in general begin to break down once again, and as Treasuries and the U.S. Dollar are sought as "safety." The Dollar may indeed collapse at some point, and inflation may very well soar to unbelievable heights as resources become more scarce. However, for now, and perhaps for some time to come, the Dollar may find support as the Great Recession continues to play out, and the spectre of Depression once again begins to lurk in the shadows.
---
Excerpt from the October 2009 MoodCompass:
October 19 – 25: A Solution? U.S. government crisis resolved one way or another. U.S. Dollar declines sharply. Inflation concerns up sharply.
From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the October MoodCompass: http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).
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