FEB 24 18 SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Econ
PENTA-NATO want to start WW3..
this FACT demands IMMEDIATE response: ORGANIZE PEACE Mov worldwide
Read this:
QUESTION: Can you
rule out the United States boarding and inspecting N- Korean ships...
MNUCHIN: No, I -- I cannot rule that out.
THE US NUKE BACKMAIL IS SET: WE
can have different opinions while observing facts, but
we can’t change the facts.
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ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
"Predicting
a regime change to much higher GDP growth, and hence higher inflation, could simply be a case of looking for, and
then seeing, something that isn’t there..."
Summing up the current conventional wisdom:
- Global GDP growth has bottomed and is accelerating systematically higher,
- Which will cause the inflation rate to accelerate higher.
- Bond markets hate higher inflation, so interest rates have bottomed and will move even higher.
- The stock market, dependent on low rates for high valuations, will fall if rates move higher,
- Which is why the stock market peaked on January 26, 2018, and then declined dramatically,
- Ushering in an era of systematically higher volatility
1. Global GDP Growth Is Accelerating?
Unless GDP can be exported from
another planet to Earth, the main drivers of global GDP growth are in four
large economic zones. Here are the past 30 years of GDP growth in the
U.S……
See chart:
The past ten years in China……
See chart:
The past 20 years in Europe…..
See Chart:
2. Rising Inflation
Below is the chart of US annual inflation rate since the
mid-1990s’ during which time it has fluctuated between
1.0% and 2.4%, and is currently at 1.5%. Nothing significant seems to
have changed here.
See chart:
Consumers don’t seem too worried about a rise in inflation
either. The current expectation is a little below
3%, which is near the average of the past 20 years, in addition to being
consistent with the past several years.
See chart:
- Bond Market Reaction
Summing up the data presented so far, neither global GDP
growth nor US inflation are systematically higher, and to believe they will
rise sharply out of the range of the past 10-20 years, you would have to
believe that GDP growth and inflation will overcome the two main constraints on
economic growth, which are a high and rising debt burden, and an aging
population.
So why
would interest rates be moving higher over the past couple of months, and why
would there be so much noise about that fact in the financial media? We
can think of two alternative explanations.
The first explanation is
behavioral, meaning that it is rooted in how and why
humans act and interact in markets, a subject of focus for the authors of the
Epsilon Theory articles. The chart below shows the history of the
10-year Treasury bond yield over the past 140 years.
See Chart:
Forecasts of higher GDP growth and inflation don’t make
actual GDP and inflation rise, a lesson that should have been learned over the
past decade. Instead, economic events will
happily come and go regardless of who or how many financial market observers
call for an inflection point in GDP growth, inflation, and interest rates.
Viewed from this perspective,
it is easy to envision a scenario in which rise in rates during the first half
of 2018 and is followed by yet another lurch lower in the second half of 2018
when the expected rises in GDP growth and inflation do not materialize. Recent fund flow data supports the potential for a change in
view (and price/yield), because a record short position has been amassed in
bonds, as shown below.
See chart:
CONCLUSIONS
It is possible that the mainstream narrative is correct and that the recent rise
in rates is foreshadowing a future of higher GDP growth and inflation.
If so, then markets are discounting a future not yet seen, which is how market
sometimes operate. But sometimes they don’t.
The current levels of GDP growth and inflation are well within their
recent ranges, and those recent ranges are lower than
they were 10-20 years ago. More importantly, the underlying
problems of high debt levels and aging demographics will continue to constrain
the potential for GDP growth and inflation to systematically rise, which are
the main reasons that interest rates have persistently declined over the past
several decades. Predicting
a regime change to much higher GDP growth, and hence higher inflation, could
simply be a case of looking for, and then seeing, something that isn’t there.
Instead, there are two alternative explanations for the recent rise in
US Treasury rates.
One is the inevitable temptation of high-profile investors to burnish
their professional reputations by “calling the bottom”
in rates, which has the power to change the narrative (and prices) in financial
markets but it doesn’t have the power to change underlying economic reality.
That is, if high-profile investors put their money where their mouths are, it will affect prices in financial markets, which will
affect the perception of other investors, who may tag along with similar
strategies. But there is a short shelf life for
that type of process because economic reality will eventually unfold, revealing
whether the forecasts of high-profile investors are correct. As
unlikely as it seems now, it is quite possible that
they won’t be correct, and that slow GDP growth
and low inflation are here to stay awhile longer. Or, given
the length of the tepid economic expansion and high indebtedness, it is even possible that recession arrives prior to the
visions of a systematic rise in GDP growth and inflation. That is
one of the implications of the Rinehart and Rogoff study.
Another explanation for rising rates is the
emergence of credit risk in US Treasury bonds, the result of the simultaneous and unprecedented experiments of
monetary policy (unwind of QE) and fiscal policy (a borrowing
binge with a high debt-to-GDP ratio). The concept of credit risk
in US Treasury prices is outlawed in financial theory. But other aspects
of today’s financial landscape, such as negative
interest rates or European junk bonds trading at lower yields than US Treasury
bonds, also weren’t supposed to occur and cannot be explained by orthodox
financial theories. Theories can change how we observe facts,
but they can’t change the facts.
….
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"I show that if job polarization had not changed the composition
of jobs in the labor market in the past two decades, 1.9 million more men would likely be employed in 2016..."
See Chart:
…
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"...a solid majority of
the American population feels no direct impact from stock market performance.
The inverse is different. Long-term stock market performance depends heavily on
the US population’s economic health. Stocks
are businesses that need customers, so how are the customers doing?"
Zero Exposure
So who does own
stocks?
The first surprise:
A big slice of the US stock market
isn’t American at all. Foreigners own about
35% of US stocks by value—and their ownership grew considerably over the last
few decades.
See Chart:
Everybody Isn’t Average
The government’s average wage growth
numbers include both workers and supervisors. Looking at them separately shows a whole different picture since the last
recession.
See Chart:
Where else
might people draw spending money? They can take it out of savings if they have
any. But that’s getting harder too.
See chart:
If you
can’t increase your spending with higher wages or pull cash out of savings, the
only other option is debt. That usually means credit cards. Here, we finally
see some growth.
See chart:
…
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POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
PENTA-NATO want to start WW3..
this FACT demands IMMEDIATE response: to organize PEACE Mov worldwide
Read this:
QUESTION: Can you rule out the United States
boarding and inspecting North Korean ships...
MNUCHIN: No, I -- I cannot rule that out.
THE US NUKE BACKMAIL IS SET: WE can have different opinions while observing facts, but we can’t change the facts.
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"I’ve never been to Russia. I’ve never been to Moscow. I’ve never
met a Russian operative or agent. I’ve never done business in Russia. I’ve never taken money from
Russia....but I may be guilty of drinking the odd Russian vodka..."
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WORLD ISSUES and M-East
Global depression is on…China, RU, Iran search for State
socialis+K- compet. D rest in limbo
"Any way you look at it, Russiagate is ridiculous. Of course it serves some
people’s interests. But it harms the most of all
by bringing us closer to conflict with
Russia, perhaps even to nuclear war."
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars: its profiteers US-NATO
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COUNTER PUNCH
Richard D. Wolff Capitalism
as Obstacle to Equality and Democracy: the US Story
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Charles Pierson Nuclear
Nonproliferation, American Style
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W. T. Whitney US
and Allies Look to Military Intervention in Venezuela
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SPUTNIK and RT SHOWS
Geopolitics & the nasty business of US-NATO-Global-wars
uncovered ..
RELATED 1:
RELATED 2:
SEE MORE VIDEOS AT:
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RT SHOWS
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NOTICIAS IN SPANISH
Latino America looking for alternatives to neoliberalism to
break with Empire:
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Keiser Report
"Los terroristas de nuestra
era"
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PRESS TV
Global situation described by Iranian observers..
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