User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday September 13, 2006 - 10:15:11 GMT
Black Swan Capital -

Share This Story:
| | Email

Rambling and the “deflationary boom”

Key News

• The number of Britons claiming unemployment benefits unexpectedly fell for a second month in August and wage growth accelerated. (Bloomberg)
• Key Reports (WSJ):
7:00a.m. MBA Refinancing Index.For Sep 8 Wk. Previous: -0.9%.


“Why a four-year-old child could understand this report. Run out and find me a four-year-old child. I can't make head nor tail out of it.”

Groucho Marx

FX Trading – Rambling and the “deflationary boom”

We have not believed “inflation” would spike wildly out of control because of the secular deflationary forces in the world. And we do not always see deflation as the bogeyman. It can be a cleanser for past mistakes and it can enhance the purchasing power of consumers—it is a more natural process for capitalism in that competition passes on the benefits of increasingly efficient processes—it’s those omnipotent central banks and governments that help “manage” the business cycle that seem to do much of the damage.

I may be getting in way over my head here, but it seems that the concept of “inflation” which is commonly defined by indices---CPI or PPI—is very different now, than it was when economies tended to resemble closed-loop systems. I realize that inflation is in and of itself a monetary phenomenon. But if so, why haven’t we seen more, much more, given central bank 24/7 pumping for many years? And I realize that some believe we have seen it in asset inflation—it’s the same, it’s just not showing up in the indices.

But I think we also throw around the term asset-bubble too loosely. A rocketing of the price of copper, because China can’t get enough, and Australia and Chile can’t dig it fast enough, is not the same as an asset-bubble—it is the byproduct of supply and demand. And we really haven’t seen so-called asset bubbles in many of the food commodities—which one might expect if inflation is a big problem.

Weekly Wheat Chart

Analytically, inflation doesn’t seem to be defining what’s happening in the global economy, despite the fact that central banks have flooded the world with liquidity and energy prices have risen, and housing prices have risen. I guess in the end we can avoid worry about defining these things and look to what has worked well in the past—the yield curve. It seems the yield curve never really bought into the idea of inflation either. The analytical appeal of inflation and what’s happening in the real world doesn’t seem to be connecting.

That’s why we find the concept of “deflationary boom” so appealing. It comes to us courtesy of Gavekal—a research firm we were turned-on to by a friend of CC; he resides in France—I don’t drink his wine or eat his fries, but I do accept his research recommendations (that was an attempt at a joke. Sorry.) We don’t’ know any of the players at Gavekal—but we do find their information creative, independent, honest, and consistently thought provoking. Here are a few excerpts from their theme of “deflationary boom” we initially read back from a piece they did in June, below that is a summary of recent market action they penned today. I think you may find it interesting, at the least.

From Gavekal in June ’06:

“At the heart of the deflationary boom argument is that supply is structurally higher than demand; and there are strong incentives for it to stay that way. For a start, the virtuous cycle of supply-side economics/capitalism usually ensures that the most efficient producer adds capacity and drops prices to gain market share. Moreover, there exists many political and social reasons to keep supply forthcoming, irrespective of profit (i.e.: China).

• This reality makes our central bankers jobs somewhat easier; they simply do not have to worry about supply issues. All they need to do is manage demand, always keeping it a little behind supply to contain prices. If this is done effectively, price increases stay contained.

• In terms of managing demand, the Fed overdid the demand stimulation in 2001-04, but an important lesson waslearned: low rates not only stimulate consumption in the US, but capacity expansion abroad even more. For a while, we get a window where demand surges (i.e.: US housing cycle, energy) and people believe we have entered an inflationary boom. For a brief period, it appears that demand has caught up with supply. Monetary demand stimulation at the core also creates supply stimulation at the periphery. And while this is going on, investment in capacity looks like demand.”

From Gavekal today:

“Commodities are rolling over hard, as evidenced by the –15% drop of the CRB index since the highs of May 11th, now trading at a 13-month low.

• Stocks are rebounding. As most investors are painfully aware, the second quarter was not a good quarter for equities… However, since mid-June, stock markets have experienced a major rebound, with the world MSCI gaining a healthy +7.5% since its June lows.

• Bonds are rising. Following the dissipation of the inflationary fears (and here we note that Swedish inflation fell for a third straight month to +1.2% in July) and the rising likelihood of a slowdown in economic activity, bonds have been performing very well.

• The US$ is strengthening. While still trading in a very narrow band, the US$ has nevertheless strengthened +1.9% against the Euro over the past three weeks and is now trading at US$1.2690/Euro, close to a two-month high. Yesterday’s strength in the US$ was particularly impressive given the fact that the July US trade deficit came in at an all-time record of US$68 billion (expected US$65.5 billion).”

A “deflationary boom:” Commodities going south, while bonds, equities and the dollar head north. It’s something to consider.

Jack Crooks, Black Swan Capital Black Swan Subscription-based Service


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105