Category: News

Navistar has officially unveiled an all-new commercial truck, known as eStar. Navistar says it is the world’s first all-electric purpose-built commercial truck to offer zero tail pipe emissions.

During a joint web conference with the Department of Energy and FedEx shipping, Navistar officially revealed the new eStar electric truck.

Navistar eStar born with help of federal government
The eStar all-electric truck first became a reality in August 2009, when President Barack Obama visited Navistar’s manufacturing plant in Elkhart county, Indiana, to announce a $39.2 million federal stimulus grant. Navistar says it has now completed all testing and validation, developed and delivered prototype vehicles and received both EPA and CARB certifications. The eStar also meets all Federal Motor Vehicles Safety Standards (FMVSS).

The eStar is a Class 2c-3 electric truck – the first and only truck in the category. Navistar says it has a range of 100 miles, with a full charge possible in 6-8 hours. The eStar is capable of hauling a 4,000 pound payload, despite having only 102 horsepower, and comes with either a 14- or 16-foot cargo box. The eStar carries a price tag of $150,000, and Navistar hopes to deliver as many as 400 trucks by the end of 2010.

Although the range is limited to 100 miles, much like most electric passenger vehicles, Navistar believes the eStar will still be a viable option for many commercial applications. “We have brought the eStar to market to meet the needs of responsible customers who strive to have a positive impact on the environment through energy efficiency,” said Shane Terblanche, general manager of electric vehicles for Navistar.

FedEx goes green
FedEx is the first customer in line for the eStar, looking to add four examples of the electric truck to its fleet in Los Angeles. The delivery company says it will use the trucks for regular eight-hour delivery routes, but is limited to city streets due to its 50 mph top speed.

Source: Leftlane

At the opening ceremony of the World Hydrogen Energy Conference in Essen on May 16 the Japanese minister for Research, responsible for NEDO, the Japanese New Energy and Industrial Technology Development Organisation, and Nilgun Parker representing Peter Ramsauer, Minister of Transport, Construction and Urban Development sigend an Memorandum of Understanding on future collaboration  in developing  the hydorgen infrastructure and in mobile and stationary applications. Mr. Ramsauer in his introductory speech on Monday called Essen the World Capital of Hydrogen. Germany has established two programmes for electric transport one for battery and one for fuel cells and hydorgen one with a total budget of € 2  bln for development till 2016 of which 1,4 for fuel cells.  Minister. Gang Wan of the Chinese Ministry of Science and Technology presented 1000 hydbide, battery and fuel cell vehicles.  Solar paner 1,6 MW and 1000 MW wind power Three mobile hydrogen refuelling stations using gas and coal gas are refeulling the fuel cell cars with 350 and 700 bas compressed hydrogen. Hydrogen and Fuels are included in China’s 2006-2020 National Mid to Long Term  Science and Technology Plan. A National H2 Strategic Plan and Fiscal Investment in foreseen in the near future as well.
At the opening ceremony the Awards of School Student Competition of the International Partnership for Hydroge nand Fuel cells in the Econmy (formerly International Partnership for the Hydrogen Economy, IPHE). The Japanes Akita High School won the competiotion for their fuel cell racing cars.  The second price was awareded to the Latvian School fo Foreign Languages. The US Student Design Competition received an award for their winning project on the design for hydrogen refuelling station. The German Jugend Forscht science competition integrated the IPHE school competition and the winning project was a hydrogen sensor project of a Stuttgart school.

Jacobsen Real-Time X-Ray Machinery, Ontario Canada, a manufacturer of custom xray inspection equipment, designed and built customized x-ray machine for inspection of cast wheels for a Brazilian customer in Sao Paulo.

A global provider of custom x-ray inspection equipment, Jacobsen builds its machines from the ground up. Jacobsen manufactures manual, semi and fully automatic systems, believing the intelligent use of x-ray inspection technology
improves the manufacturing casting process and dramatically decreases the amount of rework and production delays. This cuts the customer’s cost in terms of time and material virtually in half. Jacobsen is serious about inspection, knowing that the right
system will significantly improve the customer’s part quality and profitability. In-house application, electrical, mechanical and software engineering is performed by professional Jacobsen system designers. The designed-to-order systems withstand
heavy duty 24/7 x-ray applications with an uptime of 99% and provide years of trouble-free operation.

The MAXIwheel™ Classic in accommodating wheel sizes between 13” and 20”. With Jacobsen’s x-ray machines, customer gets the competitive edge and improves productivity by 20%.
The MAXIwheel™ Classic machine is comprised of a wheel manipulator equipped with four axes servo. A resolver based Lenze PositionServo powers this four (4) axis three-phase 230 volt system composed of four Lenze MCS06 servo motors, all with
brakes and planetary gear reducers. The PositionServo offers powerful, precise and prompt wheel handling.

The AZ Armaturen GmbH in Germany developed a system of process sampling systems
for chemical, petrochemical and refinery applications.

The system is based on the technical concept of the plug valve.
This mature and reliable design features:

– pressure free sampling
– defined sample volume
– representative sampling
– cavity free valve
– piggable valve
– maintenance free operation
– automated operation

The sampling systems can be used for the following media:

– liquids, especially aggressive, crystallizing and polymerizing
– liquids with particles
– 2- phase liquids, e.g. crude oil
– solids
– liquid gas (LPG)
– gas

In operation, AZ process samples have the following advantages:

– representative sampling out of a product flow not interrupting the product flow
– one-lever-operation avoiding operation faults by wrong operation sequence
– Sample is free from system pressure. The ventilation of the sample container can go directly back to the piping system.
The relaxation of the system is integrated.
– The available combinations integrate automation, protection housing, flushing valves and different
containers and needle systems depending on the application.

On the basis of more than 40-years experience with special valves for the chemical industry, AZ sampling systems are always a robust, practicably established and durable solution.

Quest Technologies, a 3M company, is pleased to announce that The Edge eg5 model now has Intrinsic Safety approvals from MSHA, SIRA (ATEX), CSA (US and Canada), and Simtars (IECEx) for use in potentially hazardous environments such as mines, petrochemical sites, and manufacturing facilities. The Edge eg5 cable-free noise dosimeter offers users a lighter, more ergonomic method to monitor noise levels with its compact contoured design, advanced feature set and intrinsic safety certification.

The eg5 model serves as a personal dosimeter, time-history monitor, survey monitor and peak dosimeter. Weighing in at three ounces, this shoulder-mount instrument conforms to the worker’s body for comfortable use while maintaining an upward orientation for the microphone. Its large LCD screen can be configured to display SPL, Dose, Lavg or Leq, TWA, Max Level, Min Level, Peak Level, Exposure, Run Time and more. In addition, The Edge eg5 model offers users the ability to measure Projected Dose and simultaneous C and A weighted measurements.

A rechargeable lithium polymer battery provides The Edge eg5 model up to forty hours of battery life. Recharging the unit is simple with the 1- or 5- bay “EdgeDock” docking station. As the unit is recharging, data can be downloaded from the dosimeter and sent to a PC via the EdgeDock’s USB Port. Data measurements can then be managed and analyzed with QuestSuite Professional II.

Problem solvers

If metal cutting tools exceed certain length/diameter ratios, unde-sirable vibrations may be generated in the tool, depending on the material and the cutting edge fitted. If extensions with damping properties are used, these sorts of problems can often be re-solved. The KOMET GROUP® offers a range of damping ele-ments in conjunction with a modular KOMET ABS® attachment point – a plus point from KOMET®.

Tool vibrations restrict the product quality that can be achieved with machining, or do not allow certain operations to be carried out at all. The new damping elements from KOMET® that are being presented at EMO 2009 are tailored to the requirements of precision boring and will be available in two designs. The KOMET ABS® 25 – 32 model sizes consist of a shank that can be clamped in a ThermoGrip® shrink chuck or hydraulic expansion chuck. In the larger heavy-metal designs (KOMET ABS® 40 to 63), the new damping elements are also equipped with an KOMET ABS® attachment point on the spindle side. These damping elements are used in place of simple tool exten-sions and ensure stable tool ratios up to a length/diameter ratio of 8xD for aluminium, cast iron and steel materials. The damping elements are optimised for the whole range of precision drilling systems from the KOMET GROUP®. When used for longer holes, they increase drilling quality, tool life and ultimately process reliability.

  Here's a new Beltway term you should get used to hearing — "bill shock."  You've heard about cell phone users who suddenly find themselves burdened by a $5,000 or $10,000 bill for a single month, rung up by a hyper-texting child or excessive Internet downloads.  This week, the Federal Communications Commission very sensibly recommended that wireless carriers be forced to send a mid-month text message warning to any customer who suddenly rings up enormous charges.

That's one small victory for consumers, but the giant leap is still to come.

Red Tape Chronicles readers know a thing or two about "bill shock." Crazy cable bills, outrageous hotel fees, unfair overdraft charges — American consumers are under siege at historic levels. A nagging recession and high unemployment levels make examination of scams and unfair fees even more critical.

So after four years, 400 blog posts, 2 books, and 120,000 comments, Red Tape is taking to the road.  Starting today, I'll be visiting a dozen cities on a 15-day fee-fighting journey. My dog Lucky will be with me, helping me sniff out scams from Washington D.C. to Seattle. He's already helped — you should see the fees some hotels charge when you are traveling with a dog! (In Pittsburgh, $25 a night extra was standard, but the Shadyside Inn wanted to charge me $90! The Red Roof Inn I'm staying at is charging less than that for both of us).

Sniffing out scams

So ride along on this trip. Along the way, we'll meet a widow who paid $1,500 for the extra security of an extended warranty, only to lose everything when the firm went out of business.  We'll talk with folks who fell for credit card settlement scams and the attorney general who just pushed through the boldest new law in the land to prevent such scams.  We'll meet kids trying to pay for college, adults struggling to pay off oppressive loans, consumers who have fired their banks in favor of credit unions, and plenty of Americans who are just plain fed up with unfair treatment.  We'll talk over coffee, tea, beer and dog walks. We'll visit local NBC stations, book stores, and neighborhoods. Many of the stops have been planned with the help of readers who have generously volunteered their time to help organize town hall-style meetings.

You can follow the day-to-day travels by signing up as a Facebook fan (click here )

 This week, I'll be in Pittsburgh; Wheeling, W.Va.; Columbus, Ohio; Chicago, and Madison, Wis.  If you are along the path, check the Facebook page for updates on where I'll be on any given day.  And of course, we'll be bringing you several stories on msnbc.com through the Red Tape Chronicles. 

Welcome to the Red Tape on the Road Hidden Fee Tour of America. Now, on to Pittsburgh!

   Become a Red Tape Chronicles Facebook fan or follow me at http://twitter.com/RedTapeChron

Tsubaki, a world leader in chain manufacturing, is proud to introduce our newest innovation in plastic top chains: D-pins. These new D-pins have been well received in food, beverage, and other industries, and are now used by more than 70% of plastic top chain users in Japan.

Many of our customers reported similar problems with conventional stainless steel knurled pins: cracks developing in the hinges due to excessive residual stress, hinge damage by inadvertently removing the pin from the wrong direction, and pin rotation due to flexural resistance, which then causes the pin to fall out.

Tsubaki responded by developing an innovative D-pin. One side of the D-shaped connecting pin is flat, with two protrusions. These protrusions hold the hinges in their proper place, while the D-shape the D-pin prevents pin rotation and dislodgement during operation. Further, D-pins can be removed from either side of the chain.

Contact a Tsubaki representative today to see our complete line-up of this and other find Tsubaki products. Long life, cost savings – Tsubaki, the world leader in plastic chains!

Introducing Tsubaki’s new Gripper Chain for form, fill, and vacuum seal wrapping applications. This high performance roller chain is available both in conventional and innovative new side-swivel gripper attachments. Each attachment features high performance springs designed to last more than ten million cycles, even at high speeds. Further, our side-swivel design allows for optimal material feed-through for smoother running lines.

But our commitment to high quality doesn’t stop there. Tsubaki provides four base chain options, depending on your needs: Nickel-plated, Nickel-plated Lambda, Stainless steel, and NEP surface treated chain. Each chain offers improved resistance to environmental conditions, and our Lambda chain provides longer life with no lubrication. Each chain is coated with an FDA approved food grade lubricant at the factory following assembly.

And Tsubaki goes one step further with an all inclusive package – precision machined sprockets with cam (assembled) for both types of Gripper Chains are available as design stock.

Once again, Tsubaki is at the forefront of technology, quality, and customer service for any and all applications. See the difference that being the global No. 1 Chain Maker makes – Think Chain, Think Tsubaki!

Tsubakimoto Chain Co. is proud to announce the release of their newly designed industry focused brochure, TSUBAKI: Power and Performance for the Mining Industry.

The Tsubaki Group is the leading manufacturer of mining chains, cam clutches and power cylinders that are used in underground, above ground mines, preparation plants, power stations and port facility applications.

Tsubaki currently manufactures many different sizes of mine chains for several major OEMs. This relationship enables Tsubaki to design upgrades for the chain in the mining equipment to meet the ever-changing needs of the mining industry.

Tsubaki uses alloy-grade steels, heat-treated to precise specifications and assembled with the heavy press-fits required to withstand the punishment of today’s more powerful, high production mining equipment.

Tsubaki’s complete line of mining chains includes Super Shuttle Car Chain, Feeder Breaker Chain, as well as various chains that are widely used in drill rigs, rotary breakers, reclaimers, face/roof drilling, under cutters, continuous miners, prep plants, roof support machines, and continuous haulage systems.
To better service your industry, nearly all of the mining related chains are in-stock and ready for immediate shipment.

The Tsubaki Group also provides a wide variety of in-house designed sprockets, which are required in all chain applications, as well as other related products such as our highly reliable and strictly tested cam clutches and power cylinders, One-Touch Inspection Door®, and others.

Furthermore, as the Tsubaki Group prides itself on its ability to answer customer’s demanding needs through innovative customization of its products, we are able to manufacture made-to-order chains and attachment configurations, sprockets, and other components for your individual requirements.

New N.E.P. roller chain from Tsubaki employs an innovative metal coating process that allows a carbon steel chain to be used in wet conditions without corroding. The multi-layer metal coating process is modified for different components of the chain balancing corrosion protection with wear resistance to outperform alternative solutions many times over. An additional stand-out feature of N.E.P. chain is that its manufacturing process and component materials comply with new RoHS guidelines on restricting the use of hazardous substances such as Chromium, materials that have until now been an essential component of all high-strength corrosion resistant chain.

Various coating methods have been used to protect the surface of carbon steel chain from corrosion when used in an environment where moisture is present. The problem with this in the past has been that some surface coatings are extremely hard, such a chromium and tend to peel-off due to surface pressure exerted by drive sprockets, or galvanisation which is softer and wears away quickly as the chain articulates, thus leaving critical components open to corrosion.

Tsubaki N.E.P chain however uses a combination of three layers of surface coating, combining a highly resistant base layer that bonds a harder wear-resistant coating onto the chain bushes where they come into contact with sprocket teeth. An additional tough external coating is then used to cover and seal all the other component surfaces with further corrosion protection.

N.E.P. chain also has a reduced impact on the environment through lower emissions during manufacture and the selection of less damaging materials in its construction. Previous corrosion resistant chains relied on the use of chromium derivatives such as
Hexavalent Chromium and Trivalent Chromium as water resistant coatings, N.E.P. chain however uses none of these materials and actually doesn’t contain any chemically hazardous substances at all. It therefore complies with current RoHS guidelines on reducing the use of hazardous materials.

N.E.P. drive chain is compatible with standard sprocket dimensions and is available from stock in RF06B – RS24B simplex (7 sizes) and RF06B – RS20B duplex (6 sizes). N.E.P. attachment chain in available in a variety of common configurations including a self-lubricating Lambda version.

As technology improves, mills of all kinds are becoming more efficient and thus requiring less operating staff. This is also a trend for the palm oil industry, where FFB conveyors, Continuous Cooker conveyors and SFB conveyors are crucial for the process of palm oil production. These conveyors must provide optimal operation, and thanks to the following reasons, Tsubaki RF706SP-R is the solution for dependable operation with minimal maintenance.

Stronger Bushes
Bush performance has been increased 30% compared to competitor’s chains.

Tougher Link Plates
Precise alloy steel fabrication and expertly-controlled heat treatment ensures greater shock load under severe operating conditions.

Stronger Pin
Competitor’s riveted pins have soft portions around the riveted head due to decarburization, effectively reducing the strength of the entire chain. On the other hand, Tsubaki cotter pins have stable surface hardness throughout.

Easy Maintenance
Cutting and joining chain is easier, especially when removing just a few links and rejoining when chain is stretched. Grinders are always required for riveted chain. Furthermore, the T-head cotter keys are located inward of the conveyor, making it even easier to install the chain. The T-head cotter keys are optimally designed so that they face the horizontal chain pitch line, lowering the chances of them interfering with guides and casings.

Options Available For Heavy Duty & Corrosive Applications
Long distance incline conveyors usually have sloppy rollers. Tsubaki RF706SP-R-D, which is a durable-type model, can increase chain life with its specially designed bush and roller. In corrosive conditions such as Sterilized Fruit Bunch conveyors. We recommend Tsubaki RF706SP-R-ST which has specially designed corrosion resistant bushes.

For more information please see the corresponding pamphlet in the catalogs section here, or contact your local Tsubaki representative.

With the new JEL® MOREX R form taps the KOMET GROUP® intro-duces a unique tooling concept at the EMO 2009 exhibition: Form taps with replaceable carbide inserts. These tools expand the JEL® MOREX HML product range, which has already been used in thread cutting for a long time with great success. The flexible shank made of HSSE compensates for small alignment errors, while the carbide and hard forming edges offer maximum tool life. As a special service, if the user sends the worn standard catalogue tool back, he will immediately receive in return a recycled tool in which the soldered carbide inserts have been replaced.
This reduces the tooling costs, depending on dimensions, by 20 to 40 %. JEL® MOREX R form taps are available as standard for metric ISO threads according to DIN 13 from M10 to M20, and for metric ISO fine thread according to DIN 13. On request they are available up to M36. Available with central internal coolant supply for machining blind hole threads or with side coolant outlet for use with through threads and blind hole threads.

You may be interested to know that we have a residue stock of JFH self-clinching studs in our cooperate warehouse in U.S.

Due to the expiry of our contract with the warehouse, we are prepared to clear the stock by allowing you a generous discount.
If you would like to take the whole stock (total weight 8445.92KG), we will quote you the lump-sum price, which will definitely make you a best deal ever!
If you are only interested in some specific items, please note us with your needed parts, we will quote you separately.

How could it benefit you?

Save your time! Because the cargo is already in America!
Save your money! Because we are quoting crazily low!
Guaranteed best quality as usual!

What are you waiting for ?

Please click the below “more information” and see the detailed stock list.

1. We supply the PF range panel fasteners with different head including TORX, SLOTTED, PHILIPS, LOT/PULIPIS

2. The PF range includes JPF12, JPF22, JPFS2, JPFC2, JPFHV, JPF30, JPF31, JPF32, JPF50, JPF60, JPF52, JPF62, JPFC2P, JPF15, JPF25, JPF16, JPF26, JPF18, JPF28, JPF38. JPFK, JPF17, JPF09, JPF08, JPF10, JPF11, JPF01.

3. Carbon steel and stainless steel material are available.

4. Pre-installed and post-installed two types are available; self-clinching and ballooning two styles are available

Incline knurl Nuts

Installing nuts in sheet materials which are difficult to joint
This method is easy to apply.

CharacteristicsF
1A Treatment of thin sheet.
Install this nut on sheet with thickness of not less than 0.6mm.
2A Materials that is difficult to joint with.
This nut can be used on steel materials that is hard to joint with, and also on materials such as aluminum, stainless steel and plastics.
3A High installing strength
The part under head has its unique shape, when it is pressed in, sheets are fixed, and higher installation strength is obtained.
4A Easy installation
5A No need for special tooling, air pressure and hydraulic pressure would be enough for simple installation.
6A The opposite side of nut is flat while the surface is not.
7A Still can be used after surface treatment.

Materials Sizes Surface treatment
Steel M2 M2.5 M2.6 M3 M4 M5 M6 M8 M10 M12 M16 M20 CementiteAplatingismoothj
Stainless Steel M2.6 M3 M4 M5 M6 M8
Brass M3 M4 M5

Installing techniquesF
1APut sheet on the installing flat 2AInstall Incline knurl Nuts 3APress down

Tsubaki, the world leader in chain manufacturing, is proud to introduce our newest innovation in plastic top chains: the Tsubaki BTB8 Beltop® Chain with Ball-Transfer System and the Tsubaki O-Carry Conveyor.

When operated in combination with the Tsubaki O-Carry Conveyor underneath the main chain, the Tsubaki BTB8 Beltop® Chain with its Ball-Transfer System makes possible a diverse range of handling functions other than just simple conveyance.

Lateral Transfer:
Lateral transfers (left to right sorting) of conveyed goods. Since no push-off or other devices are necessary, this approach works to prevent jamming, and allows for compact, space saving layouts.

Double Speed Conveyance:
The rotation of the balls effectively doubles speed of conveyed items. Also, low running resistance allows the required motor power to be reduced.

Rotation:
Rotate conveyed goods, both while the chain is stopped (360º) and in motion (90º/180º). Handling is smooth and safe because goods are handled on the same surface as they are conveyed.

Other benefits include an all-plastic construction, making them light weight and easy to handle, energy-efficient conveyance from the freely rotating balls reducing roller resistance, easy maintenance through simple construction, and a wide, belt-like conveying surface (maximum of 3 meters in width).

Contact a Tsubaki representative today to learn more about our complete line-up.

CHAIN OVER 10m LONG CAN BE DELIVERED ALREADY CONNECTED!

The Tsubakimoto Chain Co. is proud to announce the Super Long Length Formation for Large Size Roller Chain. Until now, large size chains over 10m long were delivered in unconnected segments, and then connected by the user before installation. As chain size increases, so does the burden of connecting it. Therefore, by connecting and delivering chain of the desired longer length, Tsubaki can increase the customer’s productivity while contributing to a safe working environment for their employees.

SUPER LONG LENGTH FORMATION MAKES INSTALLATION SAFER, SIMPLER, AND MORE RELIABLE!

Safer: The entire chain is already connected, meaning no connection work for the user and higher stability of the chain itself.

Simpler: The chain is delivered folded over itself in a specially made wooden box for easy removal.

More Reliable: Reliable instillation means no more worries about on-site connection or twisting.

For more details regarding the Super Long Length Formation for Large Size Roller Chain please contact your local Tsubakimoto representative.

Have you ever worn UV-blocking sunglasses or slept on a memory foam pillow? Used a Dustbuster, a wireless headset, or an ear thermometer? Clicked around a 360-degree view of a house or car online? Then thank your lucky stars! Or the U.S. space agency, NASA, to be exact. Because these and other everyday things—including acoustic guitars, kidney dialysis machines, and even NASCAR—have borrowed from—or been inspired by—technologies developed by NASA.

As a matter of fact, since humans landed on the moon, hundreds of useful items and activities that benefit life here on earth have used NASA research. Part of the agency’s mission is to partner with industry, schools, other government agencies, and national laboratories around the world. Together they develop technologies that help fields such as health, transportation, public safety, computers, food production, sports, and the environment.

The Space Shuttle program, for example, has generated more than 100 practical technologies, including:

• light-emitting diodes that treat cancerous tumors
• miniaturized heart pumps
• infrared cameras that scan for forest fires
• lighter and stronger prosthetic limbs
• rocket fuel that destroys land mines
• thermal protection for racecar drivers

In its search for life on Mars, NASA created a tiny, ultrasensitive sensor that can detect traces of pathogens in water using very little energy and no lab expertise. A company in Troy, New York, is working on developing the sensor to help reduce waterborne diseases for people around the world. The device could prevent E. coli and Salmonella outbreaks (like those in spinach and tomatoes in recent years), and help reduce cholera, which killed thousands of people in Zimbabwe in 2008.

Even the Statue of Liberty has benefited from space exploration: Miss Liberty sports a coating of primer that NASA developed for rocket supports at launch sites to protect them from heat and corrosion.

To learn more about the nifty things inspired by space research that we use everyday, that entertain us, or that protect us, visit NASA’s cool interactive world, NASA@Home and City, or read the magazine, Spinoff. For more fun, check out the Space Pup coloring book.

And in case you were wondering…Tang, Velcro, and Teflon were not invented by NASA—but NASA did use them in space.

If the chart below doesn’t grab your attention then few things will. In my opinion, the performance of the dollar is the surest evidence of the kind of environment we’re currently in. The surging dollar is a clear sign that inflation is not the concern of global investors. This is almost a sure sign that deflation is once again gripping the global economy and should be setting off red flags for equity investors around the world.

The recent action in the dollar is eerily reminiscent of the peak worries in the credit crisis when deflation appeared to be taking a death grip on the global economy and demand for dollars was extremely high. The recent 16% rally in the dollar is a sign that investors are once again worried about the continuing problem of debt around the world and they’re reaching for the safety of the world’s reserve currency – the dollar. As asset prices decline and bond yields collapse this is a clear sign that inflation is not the near-term concern, but rather that the debt based deflationary trends continue to dominate global economic trends.

This is exactly the kind of market action we saw leading up to Lehman Brothers. In 2008 the dollar rallied as signs of deflation began to sprout up. This was an instant red flag for anyone who understood the deflationary forces at work (and a total surprise for the inflationistas). The dollar ultimately rallied 26% from peak to trough. Coincidentally, the dollar had rallied 16% from trough to peak just prior to the Lehman collapse when the dollar surge accelerated.

Of course, the inflationistas will argue that gold is rising in anticipation of inflation. In my opinion, this is incorrect. First of all, if inflation were a major global concern the Goldman Sachs Commodity Index wouldn’t be almost 65% off its all-time high and just 33% above its 2009 low. Second, and perhaps most importantly, bond yields around the globe wouldn’t be plummeting if there were rampant inflationary fears. For a much more detailed analysis on the reasons why inflation is not a near-term concern please see here.

As for the gold rally, I think it’s clear gold is rallying in anticipation of its potential to become a future reserve currency. The potential demise of the Euro has become a rally cry for inflationistas who don’t understand that the Euro is in fact another single currency system (like the gold standard) which is destined to fail. In the near-term, the rise in gold is likely justified as fear mongering and misguided governments increase demand for the yellow metal. Ultimately, I believe investors will realize that there is little to no inflation in the global economy and that the non-convertible floating exchange systems (such as the USD and JPY) are fundamentally different from the flawed currency system in place in Europe.

Debt deflation continues to plague the global economy. Thus far, policymakers have been unable to fend off this wretched beast and I attribute this largely to the widespread misconceptions regarding our monetary systems. This extends to the very highest levels of government and the misconceptions regarding the EMU, the Euro and the vast differences in their monetary system have only exacerbated the problems and are likely to further worsen the global deflationary threat. The ignorance on display here borders on criminal in my opinion as governments impose harsh injustices on their citizens due entirely to their own lack of understanding.

I’ve mentioned repeatedly over the course of the last 18 months that government responses to the credit crisis were misguided and unlikely to resolve the structural problems. I’ve also mentioned that this was something I have sincerely hoped I would be wrong about as the consequences have the potential to be enormously destructive. Unfortunately, the policy responses have been so tragically misguided that I now believe the global economy is on the cusp of a potential double dip. And as Richard Koo says, the second dip has the potential to be far worse than the first because investor confidence is shattered (which is clearly the case on the back of the recent market crash). Policymakers are doing little to rectify confidence and have in fact, through their ignorance of the way in which our monetary system actually functions, only increased the global risks in the economy. The dollar is the surest sign of the lack of faith in the policy response and an enormous red flag for risk markets. Allocate accordingly.

PS – There is a video going around called “Melt-up” and it is receiving a HUGE amount of attention on the internet. It is regarding the recent melt-up in stocks and how the U.S. is about to enter an inflationary spiral and a currency collapse. I would recommend to the good readers here at TPC to ignore this video. It is 100% factually incorrect (well, more like 75%) and full of the same fear mongering misconceptions that fuel the asset destroying portfolio strategies of well known inflationistas (we all know the names). Videos like these are based on the same misconceptions regarding the monetary system that have actually led to the current debacle. Positioning yourself for hyperinflation and a U.S. dollar collapse has been a recipe for disaster and will continue to be a recipe for disaster as debt deflation remains the single greatest risk to the global economy.

This guest post previously appeared at the author’s blog The Pragmatic Capitalist >

Join the conversation about this story »