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Five Things You Need to Know: Deflation... And the Headstones Climbed Up the Hills

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The question of whether capitalism can survive is irrelevant because a government, by issuing public debt to buy private assets, will have effectively ended it.

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Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Deflation... And the Headstones Climbed Up the Hills
2. The Ben Bernanke "Helicopter"
3. The Liquidity Trap
4. The New American Saver
5. One Last Thing

Deflation... And the Headstones Climbed Up the Hills

"Policy makers navigating the U.S. through the global credit crisis may have a new concern on the horizon for 2009: deflation."
- Wall Street Journal, "Amid Pressing Problems, Threat of Deflation Looms," Oct. 18, 2008

"Britain faces deflation for first time since 1960."
- Telegraph, Oct. 17, 2008

"U.S. Federal Reserve Chairman Ben Bernanke on Monday threw his support behind a second round of fiscal stimulus by the government to limit the risk of a "protracted" slowdown in the economy."
- Wall Street Journal, "Bernanke Signals Support for Second Stimulus," Oct. 20, 2008

"And I dreamt of a house
Haunted by all you tweakers with your hands out
And the headstones climbed up the hills
And the headstones climbed up the hills"

- The Mountain Goats, "Palmcorder Yanja"

And the headstones climbed up the hills. Indeed. While a trillion dollars may be just enough to raise the rotting corpses of a handful of banks and send their headstones marching up the hills, the rest of America is going to have to lie quietly "in state," as it were, and wait for congress to dole out another round of "Economic Stimulus"... or "Ec-Stim" as it's known in the trade.

If Congress can rush another round of checks through before the election, or at least distract us with a gaudy show of trying, some incumbent seats will no doubt be saved from voter wrath. But Ec-Stim is political gibberish, of course, and amounts to little more than a second multi-billion dollar bailout... of the online porn industry. That is a fact.

According to AIMRCo, the Adult Internet Market Research Co., the online porn industry reported 20-30% growth in membership rates this summer following the initial round of Ec-Stim checks in mid-May. That's normally the slowest time of the year for online porn, AIMRCo said, which is far more information than we need or want if you really think about it.

"Getting more people to buy porn was probably the last thing Bush had on his mind when he came up with his 'stimulus package,' but we'll take it," Jillian Fox of LSGmodels told United Press International in July.

Oh, I wouldn't be so sure about that, Jillian.

"Go F%&k Yourself."
- Dick Cheney, Vice President of the United States of America

Political dynasties, and those in charge of running them, have a long, cruel history of secretly engineering public orgiastic frenzies to soothe the masses. Virtually all German porn that is considered illegal in the U.S. originated during the Carolingian dynasty. And to this day there are certain places in Bangkok where simply uttering the name Charles "The Hammer" Martel is enough to earn you a life sentence in prison.

No, Jillian, these people are professionals. And they understand that while you can buy more real estate in a day than you can sell in a lifetime, it is possible to consume more porn in an hour than can be produced in a quarter of a century. Yes, that should keep them busy for a while.

Good lord, how did we collapse to this dark and ugly, Cheney-esque level in less than 250 words? Ah, yes, deflation... a broad-based decline in prices across the economy. All it takes is widespread asset price deflation to get the bread & circuses committee ramped up.

Meanwhile, the headstones climb up the hills.

The Ben Bernanke "Helicopter"

Federal Reserve Chairman Ben Bernanke, has long been known by the weird nickname, "Helicopter Ben." But where did this strange nickname come from, and what does it really mean?

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No positions in stocks mentioned.

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