[GoghGoner]

The whole global banking system cannot exist without stimulus. Stimulus in the U.S. appears to have inflated a huge energy bubble and now that bubble-envy has kicked in, the other central bankers are getting in on the action. A little late to the game but this should result in the U.S. catching the deflation bug.

European Central Bank announces huge stimulus program

The ECB finally pulled the trigger on QE after consumer prices in the region fell 0.2% last month. Persistent deflation can prompt consumers to put off purchases, triggering further price declines and recession.

"Inflation dynamics have continued to be weaker than expected," ECB president Mario Draghi said at a news conference.

[Keith_McClary]

Stimulus spreading:

I can see the "green shoots" already.

[GoghGoner]

Haha, green shoots indeed. China better step it up a bit, they are planning to spend 1.1 Trillion USD on infrastructure so that should help the central bankers since the other stuff isn't working, yet.

China January factory growth stalls, deflation pressures build, bad debt rises

To contain deflationary risks, economists at state think-tanks who are privy to China's policy discussions said authorities are ready to cut interest rates further and pressure banks to step up lending. The central bank unexpectedly cut rates in November for the first time in more than two years.

Some Chinese consumers are already postponing purchases in anticipation that prices will fall further in the future, a classic warning sign of deflation that would deal another blow to the Chinese economy, where growth hit a 24-year-low of 7.4 percent last year.

Although 2014 economic growth data was not as bad as some had feared, it suggested that a steady series of policy easing had not sustained activity as much as policymakers had hoped.

[GoghGoner]

Stimulus World War is officially underway.

China’s Central Bank Goes With the Flow

But this is no longer just targeted stimulus. November’s rate cut and this latest move add up to a more aggressive policy stance by the central bank.

Further rate cuts are a possibility. These could lead to yet more outflows, especially if the Fed starts hiking as expected. China may allow limited yuan depreciation in response, but a big fall against the dollar is unlikely for political reasons.

All this is a reversal of the inflow cycle during China’s go-go years. With China slowing and the U.S. bouncing back, the economic season have changed.

[Pops]

I think after 4 years of oil priced at a higher average amount than at any time since oil they had better get on their deflation fighting battle rattle.

[PrestonSturges]

Government debt piled upon worthless government debt. Burn the old notes and bring in something new!

The Penny based upon a grain of wheat.

Last time I checked, a wheat penny was worth about 4 cents.

[dinopello]

Last time I checked, a wheat penny was worth about 4 cents.

Some are worth considerably more than that !

But it is all fiat phooey phoney money.

[PrestonSturges]

A "Mercury" dime is worth about a buck because they can be melted legally.

[Pops]

Government debt piled upon worthless government debt. Burn the old notes and bring in something new!

The Penny based upon a grain of wheat.

The Third Seal: Famine
5When He broke the third seal, I heard the third living creature saying, "Come." I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand.
6And I heard something like a voice in the center of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine."

LOL, on a religious bent today,
http://biblehub.com/revelation/6-6.htm

[GoghGoner]

Sweden is latest to cut interest rate below zero per cent

The negative rate means banks will in fact be paid a tiny rate to take money from the Riksbank. The hope is that would encourage them to use the money to lend, supporting investment and growth.

The bank cited the risk that inflation, which it believes has now reached its lowest point, will not increase fast enough and that global growth will remain slow in coming years.

In Europe, Denmark and Switzerland have already lowered their key interest rates below zero. The European Central Bank has lowered a separate rate -- what it charges banks to take deposits from them -- to below zero.

The unusual moves show many central banks, which usually try to bolster the economy by lowering rates, are entering uncharted territory.

[ROCKMAN]

Yes: looks like the US is spreading our style of "democracy": democratically agree to borrow now and let those in the future (who aren't around at the moment to vote) pay it all back. So once again the majorities are winning the vote count and getting exactly what they need.

And that, bubba, is THE American way. LOL.

[onlooker]

This stimulus like everything else it seems in the world now has the seed of it's own destruction. How can anyone believe this can go on much longer considering how all currencies around the world seem to be doing the same stimulus making them all vulnerable to inflation with so much currency available. At some point does not these bills become worthless! here is an interesting link talking about precisely that
http://mises.org/library/why-central-ba ... c-recovery

[GoghGoner]

Looks like low oil prices might not be so great for the US economy after all. Hmmm... more stimulus, please?

Where to put your money with looming disinflation

If you read my columns regularly, you know that I am generally an optimist and bullish on the U.S. economy and the stock market. That view hasn't changed, but the landscape has, and as such, a different approach to investing will be required. It's easy to point to the troubles Europe is facing and make broad statements that "we" are in much better shape than they are — which is absolutely true. But that's a far cry from saying we are doing well. While there have been significant improvements in our economy, several headwinds remain, and all is not well. The recent decline in oil prices has not had the positive impact on consumer spending most expected, but is having the expected negative impact on capital expenditures by energy companies. The net result is layoffs by companies like Exxon Mobil XOM, -1.45% and Chevron CVX, -1.13% not to mention countless smaller privately held companies.

Given that the U.S. Federal Reserve has deployed most of its tools, the current environment is problematic for policymakers. While Atlanta Fed Governor Dennis Lockhart recently stated that he believes the Fed will be in a position to raise rates later this year, he also added that (declining) wages and declining productivity are a concern that could alter the Fed's path.

[GoghGoner]

Come on, Junta, let's get some QE going -- that infrastructure stimulus stuff is for the birds.

Thai economy weakens

Over the year, Thailand’s key agricultural sectors — including rice and rubber — struggled with falling global prices, curbing the amount of crops produced and taking money out of Thais’ pockets.

The ruling junta has vowed to pump billions of dollars into the economy, mainly through long-planned infrastructure schemes.

But the latest figures will heap pressure on the leaders, who have vowed to curb subsidies to agriculture and called on Thais to wean themselves off credit. Thailand is one of Southeast Asia’s most indebted nations.

[GoghGoner]

ECB deflation fears sparked QE launch

Fears of continued deflation in the euro zone spurred the European Central Bank's (ECB) Governing Council to launch its controversial quantitative easing program in January, minutes of the key policy meeting revealed.

The document—the first-ever minutes of an ECB policy meeting—also showed that policymakers "broadly shared" the view that further stimulus was needed in an effort to help kickstart the moribund euro zone economy.

[GoghGoner]

Commodity super spike coming?

Bank of Italy Boosts GDP Growth Estimates on ECB Measures

The nation’s economy, struggling to emerge from its longest recession on record, is set to benefit from unprecedented ECB stimulus that’ll create more than 1 trillion euros ($1.1 trillion) through quantitative easing. Italian GDP may advance more than 1.5 percent in 2016, compared with a previous forecast of 1.2 percent expansion, Visco said.

“Italy is among the countries that are struggling hardest to make a start on the road to recovery,” Visco said. The effect of ECB asset purchases on GDP “could exceed 1 percentage point in 2015-16, other things being equal,” he said.

[Pops]

I don't know about a super-spike but I'm thinking low gas prices are going to do more for the economy that all the stimulus has - in the US most of QE never entered the economy it just increased bank reserves. The only real stimulus was the "payroll tax" holiday (our retirement tax) that was a $500/year spiff to everyone working.

[GoghGoner]

Poor Joe Average never got his. Didn't it get to the investors? The stock market and levels of liquidity that allowed fracking to boom seem to indicate that.

China isn't as optimistic as Italy. It appears something positive came out of China in February and commodity prices would also indicate higher levels of activity globally for the month.

China February flash HSBC PMI at four-month high

Economists expect growth to cool further to 7 percent in 2015, even with additional stimulus measures.

To lift flagging growth, the central bank reduced the amount of cash that banks have to hold as reserves earlier in February for the first time in over two years. In November, it cut interest rates, also for the first time in over two years.

Most analysts believe policy will be loosened further in coming months in the form of more rate cuts and reserve ratio reductions. This is especially after data earlier this month showed growth in China's broad M2 money supply slumped to its lowest on record in January.

Some economists said the plunge in M2 growth was a sign that more capital was leaving the world's second-largest economy as it cools, a trend that would tighten liquidity conditions and spur the central bank to ease policy.

Lu Lei, the head of the research bureau at the central bank, said this month that the country's monetary policy will be adjusted to keep liquidity at a reasonable level.

[Pops]

I think equities are high a result of leverage - low, low - virtually negative interest rates for the people who can get loans.