Over 5 trillion dollars lost in January 08 - The world economy implodes.

In summary: Get your cash out of the banking system and put it into physical goods or cash on hand. Don't use the banks to hold your cash, it will be seized. (I'm not a financial adviser, talk to a licensed financial adviser before making any decisions with your money.)

Evidence of the continuing deflation of the world's fiat assets.

http://news.yahoo.com/s/afp/20080209/bs_afp/worldeconomystockssandp

What this means is that the underlying assets the world have shrank by 5.1 trillion dollars. It varies by country, but the losses are consistent except in a few small players.

This is consistent with my theory about deflation and collapse. The inability of the financial markets to repackage debt into a salable commodity is forcing the financial insititutions to carry debt for longer periods of time. Traditionally, they had "bridge" loans to finance the securitized debt over the period it took them to sell the debt instruments.

This time, they have taken the debt on to their balance sheets (or placed them in regulation Q off balance sheet places!) and they can not get them off. I've heard the term "Pier loans", because these loans were going to be bridges, but they have no place to land.

The compounding facts will cause additional contraction of the money supply and force the finanical industry to reach for additional more expensive money, such as the money used to finance consumer debt or short term corporate debt.

The pressure to maintain enough cash flow to keep their institutions operating with higher cost debt will force the financial industry to reduce the amount of cash or demand deposits available for withdrawal. We should have all seen that with the ongoing restrictions on getting your cash out of the banks.

As this unfolds, we'll continue to report what we find.

I'd like to hear how your credit card or banks have reduced your access to money.