Price divergence between oil and gold provides first clue to deflation and debt driven financial meltdown
Peter Oberois
Mar. 17, 2007

The financial meltdown does not happen overnight. The pressure is built over time before the system faces shocks. The Richtor scale in this one will be unprecedented since the days of Rome. The first clue of the problem is coming from a strange price divergence between gold and oil. Both are down from their top. Both are up from five years back by more than 100%. But the analytical models tracking their price movements, overall demand and supply, manifests while gold is getting ready for an explosive move upwards, oil is getting ready for a collapse.

The most probable interpretation of this nasty divergence is that the global economic slowdown is affecting the oil market. At the same time the gold market is very strong. Geopolitics is not fueling the gold upside. The Iran nuke issue is not the same as Iraq. The North Korean issue is on the mellowing side. But the smart money knows something that is not out in the media yet. Most likely, the fall out from the collapse in financial services sector that has started from collapse of sub prime lending is far deeper that one can imagine. The problem will spread like wild fire since the Government faces massive budget deficit and will be reluctant to bail out FDIC and other similar organizations in case of a financial meltdown.

Price divergence between oil and gold provides first clue to deflation and debt driven financial meltdown
Peter Oberois
The financial meltdown does not happen overnight. The pressure is built over time before the system faces shocks. The Richtor scale in this one will be unprecedented since the days of Rome.
READ MORE>>

A clue from dollar - severe unemployment in fiancial services and construction creates massive deflation – bond rates will fall as stock market collpases
Joe Weinman
Severe unemployment in the fiancial services sector and the construction creates massive deflation in the economy. The stock market is ready to collapse and the bond rates fall.
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The forty and hundred year banking cycle topped – are you ready for global run on banks and fianncial institutions as they fail one after the other?
MarlaGuthrie
The problem has started with sub prime mortgage market. Soon it will spread to the regular mortgage sector. Then will come the credit cards, car loans and personal as well as student loans.
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Possible joint venture between Dow Chemical and Reliance Industries, India’s largest listed company – another sign of catastrophic global financial meltdowns
Karen Zuba
It is a question of time, and not if it will happen. The later it will happen the nastier the manifestation of depression will be, deflation and total financial meltdown.
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Debt is the main cause of deflation and financial meltdown – emerging economies leading the collapse – can Dow reach 2000?
Sam Adelton
The markets worldwide are in trouble for the very long term. Over the next thirty years, the normal stock market charts will be reversed. The typical buy and hold technique in stock market investments will create devastation of portfolios.
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Stealth deflation does it again – simultaneous dollar and stock decline on CPI data confirms deflation not inflation
Peter Oberois
The overall money supply is now heavily dependent on the borrowing by Government, intervals and Corporations. The Consumer Price Index needs to be adjusted for the hike in price driven by fresh borrowing.
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