Go Long Gordon T

Sometimes one has a light bulb moment. We swim through life half-understanding things about the world. Then an news article, movie or in this case a well written blog post blows away all that fog of quasi awareness.

Thanks to http://www.gordontlong.com/ explaining the cozy relationship the first world has had with the third. And what it has led to.

http://www.zerohedge.com/article/guest-post-economic-death-spiral-has-been-triggered

OK, its a rather dry, long technical piece, spattered with graphs, but it goes something like this:

• There has been a symbiotic relationship between the exporting Asian tigers and the very safe storehouse of wealth, the US Treasury
• This flow of capital has perpetuated a generation long shift in the fortunes of two very different economies. Both of which have benefited enormously.
• However the ground rules have changed, the first world is saturated in debt and can no longer service the lifestyle it has grown accustomed to, let alone continue the same growth path that it has for the last two decades. 
• In answer to this, monumental change in the apatite for debt. Central Banks have increased their money supply, in an effort to inflate their way back to prosperity.
• But this hot money has flowed out into any international market that shows any signs of growth potential. All commodity classes have seen price rises well beyond the USD's own deflationary curve. 
• Commodity inflation as adversely effected the third world, where basic needs for food have significant upward price pressures. Putting the brakes on their ascendancy to prosperity.
• There is no end in sight for continued Qualitative Easing, as there is still no sign of a turnaround for what was the mainstay of the US economy, housing. 

 Well like any well educated self-aware blogger, I love pessimism porn. So its so refreshing that this article never mentions the dreaded Hyper Inflation. But the comments section, has no shortage of this shrill end of the world talk.