No good arguing for hyperinflation at this rate…

Istithmar (Dubai World) liquidates Union Square W Hotel for $2Million. Original purchase price was $282Million in 2006

http://dealbook.blogs.nytimes.com/2009/12/09/dubai-forced-to-check-out-of-w-hotel/

Japan revises GDP growth (lower)

http://www.nytimes.com/aponline/2009/12/08/business/AP-AS-Japan-Economy.html?_r=1

CaLPERS fund real estate holdings drop in value by 48% year on year

http://www.latimes.com/business/la-fi-calpers9-2009dec09,0,7319259.story

All the above circumstances and many more around the world mean a re-evaluation of asset prices lower. Lower asset values trigger cost cutting thus feeding unemployment. Rising unemployment causes rising social costs. However, just as social costs are rising, lower asset prices and rising unemployment result in diminished tax revenue.

So, we are at war and we are expanding the war. We are bailing out banks and companies to the tune of dozens of Trillion Dollars. Due to declining asset prices various layers of derivatives will come due (may I remind you that outstanding financial obligations globally stand at $500Trillion and that global GDP is somewhere in the neighborhood of $50Trillion and dropping like a rock) and through it all, our governments tax revenue is disappearing…

… and if that were not enough, our governments have no dosh stashed away anywhere. In fact, funds such as the US pension fund that in accounting terms is in surplus, in real terms the money has been spent. It is not there physically. Meaning that the US government has already borrowed and spent the sums you  thought you had saved. And may I remind you that this type of borrowing does not show up as “debt” on the accounts of the Federal State.

Inflation has a mathematical limit. Once at the limit, traditional inflation goosing techniques only serve to bankrupt the state.

World war by 2012/2015

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