Monday, April 20, 2009

The madness continues II

So now Sweden has a “zero”-sum interest rate. The errand boys of the political class and all that is wrong in this world have taken my birth-nation closer to the edge. I wonder if it’s the depression or the Swedish government who will be the ones pushing you over?

For those who don’t really understand lowering rates means that people might borrow and spend more. In addition there is also more money in the system so prices might go up. During normal circumstances this, in it self, is a bad idea. These things should be decided on the market and not by a socialist zombie-group at some central bank. And buying things should come with production, not fictive rates and increasing money flowing in the economy. Basically everything the central bank is doing is the complete opposite of what they ought to do. And this is not normal circumstances. We are in the middle of a world wide crisis with governments everywhere printing money and borrowing like crazies which means that inflation will grow and financial bubbles will be created. So with the economy falling, unemployment growing and no end in sight; the central bank wants people to spend their last savings and that prices should increase. Don’t do it! Even if you are loosing money saving them, do not spend a dime. If you are going to buy something, buy gold, antiquities or guns. Stay away from the stock market if you are not completely sure what you are doing.

And I need to quote some bitch-monster with no clue whatsoever about economics. She is mumbling complete gibberish in one of Sweden’s newspapers today. Apparently she is the chief economist at Swedbank which is the bank that is doing worst at the moment and is probably going to be taken over by the state. This to no surprise at all with this mad woman running the show. When asked for the risk with lowering the rate she answers:

“There is no risk today. The risks appear in the future when the recovery is coming and the central bank is going to increase rates again.”

So higher inflation (prices) than normally, people spending their last savings and building in more bubbles in the economy isn’t a “risk”? Okay. How about if the “recovery” isn’t anytime soon?
Apparently this cornflake-economist doesn’t see any inflation risk either because she says:

“In the short perspective I don’t see any risk with the ‘krona’ getting weaker and that this is going to lead to increased inflation.”

Despite contradicting herself, which she apparently doesn’t realize, what the blazing fierily pits of hell does she mean by: “in the short perspective”!? Next week? When this depression hits us in a couple of months from now and people start walking around with empty eyes trying to find jobs, remind me to unearth this woman and give her a banana.

There are also some economists that are telling people to keep their rates adjustable, because it might pay off. This is of course complete madness. If you haven't had your loans put on a fixed rate before, do it now!

As I have said before the volatility of the stock market means it fluctuates up and down without any real focus. If you want to know why you can read some earlier rambling. This will continue a couple of months more, maybe even seemingly showing some improvements and climbing a bit upwards. All along with politicians, bought journalist and other criminals claiming the crisis is over. Do not let this illusion and madness fool you. The depression is coming and this time it will really be “great” in opposite the much smaller one in the 30’s and the Swedish Central Bank is enhancing it.


  1. Once again we find ourselves on the same side of the argument. Interesting facts good to know :

    1) The Swedish housing bubble is already here. Prices were up almost 10% in the first 3 months of this year for apartments, and some 7 or 8 percent on houses

    2) ~75% of mortgages are adjustable rate. People think that it's a bad idea to fix the rate now since the adjustable is so much lower. What they should compare is how the longer fixed rates are going to climb as opposed to now. All rates 2 years and over stopped moving many months ago, and a climb will probably start soon

    3) The regular KPI values are calculated with "cost of housing" included. I kid you not. So when they say that inflation is low, what they really mean is "people pay less for their mortgages". Which, one would assume, they could figure out without creating KPI values. If we check KPIX that is the same index WITHOUT housing costs, it is almost 2% year-over-year, and was 0.5% up from Feb-March. This indicates (to me) that the inflationary pressure is currently somewhere between 2-6%. One would expect this year to end at maybe 3-4%, and next year starting the climb into hyperspace. We're not Japan - we don't have a savings rate of 8-10% of disposable income. Nor do the americans, I might add.

    4 ) Media is definately on the "let's do important people favours"-boat. Try to find any extensive information about the money market fund that "broke the buck" in September, which was the real start of this crisis (not Lehman Bro's).

    The sad part is that I think that we will be fooled for a bit longer by lowered consumption keeping prices down.

  2. Actually I did see an article in SvD today from one journalist that’s using some of his brain functions, which is a rare thing today. And yes you are pretty much right in the things you mentioned. To this comes also the global spectra and Sweden’s trade dependency. This is why I told you before that you were to optimistic about Sweden’s future. Even if our country have done pretty good so far, when the shit it’s the fan (love that expression) Sweden will drop like a stone and join UK and US on the absolute bottom. Im predicting 15% sympathies for the communists and similar numbers for SD and with all these fascist laws in place and people dying on the streets, this is going to be great.

  3. When I read your posts, I'm usually too busy laughing out loud at how funny you are (like this for example: "remind me to unearth this woman and give her a banana" - priceless), how well you write and your witty observations. What I sometimes forget - because I'm laughing so much - is that you're also fiercely intelligent and knowledgeable.

    Talk about worshipping at the church of the Apocalypse.



  4. Very astute. This is actually what has caused the world depression we are headed into in the first place.