Sat
JUL 21 18 SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Econ
by Sprott
Money - Jul 21, 2018 4:00 am
Insanity
has taken hold of the West, as a percentage of the population continues to
descend further and further into madness, madness that is being rammed down our
throats by the MSM
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ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
Financial irresponsibility uncovered:
The corp Press don’t talk about, they prefer lies based on Ruso-fobia n sex..
Why? because Dems n Reps are parts of this crook economy.. they’re financed by
those financial parasites.
"Bear in mind that even though this revised budget is a colossal
train wreck, the projections still
don’t factor in the possibility of a recession. War. Major emergency. Natural
disaster. Financial crisis..."
READ THIS
The last
government budget update was released in February. And according to the
February budget, the government’s deficit for this fiscal year was going to be
a whopping $873 billion.
Now they’re projecting to close this fiscal year (which ends
on September 30th) with a deficit of $890 billion… which means they’re
over-budget by just under 2%.
2% is actually pretty good. But here’s the problem: when they first
unveiled the FY2018 budget in March of last year, they projected the annual
deficit to be ‘only’ $440 billion.
So between their initial projections in March 2017, and
their current projections in July 2018, this year’s
budget deficit increased by more than 100%.
And
that’s pretty pitiful.
But it
gets worse.
Last March, they projected a total budget deficit of $526
billion for Fiscal Year 2019.
But according to the revised projections they published yesterday, the
budget deficit for Fiscal Year 2019 will now be $1.085 TRILLION… 106% worse
than projected.
And, whereas last year the government was forecasting
DECLINING deficits in Fiscal Years 2020, 2021, etc., until miraculously
reaching a positive budget SURPLUS of +16 billion in 2026, their updated
projections now show TRILLION DOLLAR DEFICITS next year. And the year after
that. And the year after that. Etc.
Bear in mind that even though this
revised budget is a colossal train wreck, the projections still don’t factor in the
possibility of a recession. War. Major emergency. Natural disaster. Financial
crisis.
These forecasts assume that all big picture and
macroeconomic trends are going to be fantastic for the next decade. .. We’ve
lately been talking about the concept of assets being ‘priced to perfection’.
‘Priced
to perfection’ is a financial term meaning that assets are valued as
if business conditions will be perfect forever.
Investors simply assume that the business plan will be
successfully achieved without any difficulty, that sales will be strong,
consumers will be happy, the economy will remain robust, etc. .. And as a
result of these pie-in-the-sky assumptions, investors
pay record high prices for assets.
Well,
these budget projections are priced for perfection.
They don’t take into account the possibility of any number
of major risks that are looming, not to mention the enormous capital
investments that are necessary in the United States… US infrastructure, for
example, is in desperate need of serious multi-trillion dollar maintenance.
Then there’s that pesky issue of Social Security, which
presently has a funding gap of tens of trillions of dollars, according to the
government’s own financial statements.
If you factor in even a fraction of these costs,
the budget numbers… which are already gruesome… fall off a cliff.
The government has no Plan B. In
fact, their Plan A, literally, is to have trillion+
dollar deficits and expect that there won’t be any consequences.
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CONTINUE READING AT
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RELATED 1 : Pentagon
Releases $200 Million In Military Aid For Ukraine neo-fascist dream
to nuke RU
RELATED 2: Are
You Prepared For The End Of Fake Money? Some parasitic financiers are.. we don’t. Find their bunkers or their Banks n you will
get gold. Is that your dream? El que roba a ladrón tiene mil años
de perdón.. then you’re Christian .. one way of been ready for the end
of fake money. Un pope lo hizo
.. los cruzados le dieron el oro que robaron.. y el vaticano creo el más rico
Banco Italiano
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"One
cause for concern is that renewed monetary easing by the world’s central banks
might rekindle a fear of competitive currency devaluations, as it did in 2015
and early 2016."
See Chart:
https://www.zerohedge.com/sites/default/files/inline-images/gs%20tariffs%20context.jpg?itok=FhiYtJll
See more charts at:
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"We
think this is a very real threat because trade tensions are hard to resolve
when the goal is to rebalance economic power."
To address these "potential shocks", DB's credit
strategist Dominic Konstam is launching a series of 5 pieces, and overnight
published the first part in which the bank focuses on market shock #1: a sharp weakening of the Renminbi as part of
the reaction to the ongoing trade tensions.
In light of recent developments,
including a series of sharp "back and forths" between President Trump
and Beijing which has resulted in some fairly dramatic moves in the yuan and
the dollar...
See Chart:
the bank thinks this is a very real threat because:
- trade tensions are hard to resolve when the goal is to rebalance economic power, and
- it is a reasonable response for China to maintain market share but at the expense of reserve accumulation.
Alternatively, China can - and already has started to -
devalue to absorb the whole tariff impact. This implies a more complete
deterioration in the terms of trade but export volumes would be supported. And
this is where the shock part comes in: China’s reserves would deteriorate
as unchanged RMB earnings buy fewer dollars; in fact if the yuan devaluation is
sharp and fast enough, it would launch another all-out capital flight out of
China, something we already saw in June, when in June China suffered a net FX
outflow of $16.6BN ($9.9BN from onshore FX settlement, and another $6.7BN from
cross-border RMB flows), reversing the inflows of the past two months. Escalated sufficient, and a full-blown reserve liquidation in which the PBOC is eventually
forced to defend the Yuan as residents bypass all FX firewalls to park their
liquidated assets offshore - a repeat of late 2015 and 2016 - would be
inevitable.
See Chart:
As a result of the devaluation,
which would lead to a deflationary wave across the world as was observed
in 2015/2016, there will be a loss in global growth due to the distortionary
impact of tariffs. The
lack of growth will encourage competitive devaluations among competitor
countries and would be the catalyst for EM weakness to the extent that the
global growth was smaller. Think 2009, when every central banks
scrambled to slash rates and launch QE in an attempt to beggar its
numerous money printing neighbors.
The bigger risk for financial markets is an accelerated
Chinese devaluation "that emphasizes at least a short run desire to maintain export volumes
and the RMB surplus albeit at the expense of reserve accumulation." Meanwhile, as noted above, a key
issue is whether a weakening RMB drives capital out and the extent to which the
PBOC might defend the currency.
Which brings us to the core dilemma facing China:
The nature of the shock is therefore if the
PBOC wants to protect reserves it would tolerate more currency volatility and
potentially a deeper correction. The lesson from 2015 was that in managing the currency there were
extensive reserve losses. This time might be different in the context of trade tensions.
Ultimately - and this is important - Deutsche Bank believes that since tighter US financial conditions are consistent
with underperformance of EM equities, a
full blown trade and currency war imply that the Fed would be justified in a
softer stance than otherwise:
In the first instance, this
would translate into a lower risk neutral rate and on balance a steeper curve
with a bullish bias. The extent to which risk assets can weather the storm is a
function of term premium. Lower risk neutral is clearly negative for risk
assets but if inflation term premium rises and real term premium is stable or
lower, risk assets will be insulated to some extent.
This is shown in the table below, where a move to USDCNY of 8.00 in 3
months’ time would imply more than half a standard deviation tightening in US
financial conditions (which have
historically been well correlated with weakness in EM equities, shown in the
chart on the right)
See graph n Chart:
Finally, from this one can also extrapolate the Fed's reaction
function, or rather the implied change in the Fed stance – defined as
the 12-month change in spread between the real funds rate and r-star – which
moves along with financial conditions, with Fed stance getting tighter as
conditions get easier, and vice versa. As a result,
Konstam estimates the equivalent Fed easing that would typically be associated
with the various shocks to financial conditions under the different CNY
scenarios.
See Chart n graph:
What he finds is that if the PBOC were to launch a currency
war nuke, and send the USDCNY higher by 1,200 pips to 8.00 or so, the Fed would
need to cut by 55bps, or just over 2 rate cuts, in the span of 3 months.
And here a big problem for the Fed
emerges.
While Jerome Powell would be
perfectly justified to cut rates in response to China's nuclear currency
weapons - as Deutsche Bank's analysts suggests - it would also be seen as doing the bidding of
Donald Trump, who has made it clear he want the Fed to hike at most 2 more
times then stop the tightening cycle, and ideally, to start cutting rates (if
not launch QE tomorrow).
Meanwhile, if the Fed refuses to cut
rates in response to the dramatic collapse in financial conditions that a sharp
yuan devaluation would entail, if only to demonstrate just how independent it
is, then China wins as the US stock market will finally tank, forcing Trump to
wave a white flag of surrender, conceding the trade - and currency - wars to
China.
…
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SOURCE: https://www.zerohedge.com/news/2018-07-21/market-shock-1-or-why-fed-suddenly-has-big-problem
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by Knave
Dave - Jul 20, 2018 7:53 pm
Economic
cracks big enough to drive a car industry into are opening up all over the
globe.
Trump tax cuts and
ultra-high government spending fail to deliver
While the insanely rich are directly pocketing all corporate
tax savings via stock buybacks (as they were designed to), consider how poorly
the stock market is doing anyway. All the negative
economic facts listed in this article are happening during the largest tax cuts
in history. Ineffective!
Wages haven’t even changed enough
this year to keep up with rapidly rising inflation. That means wealth creation, even after the Trump Tax Cuts, is still
failing to trickle down in order to improve consumer spending capabilities:
See Chart:
Hourly wage growth remain
non-existent
The Organisation for Economic Co-operation and Development
(OECD) warns that positive employment trends are at risk of being derailed by
“unprecedented wage stagnation” affecting low-paid workers. This is as much true in the US as other parts of the world:
(Compare wage growth in 2007 to ten years later.)
See Chart:
Slow down in wage growth in many
countries: The US in 5th place
In spite of tax cuts, wage growth in the US falls short of
the growth rate in 2007 by more than half. And consider
…
See Chart:
US lead the world where financial
INEQUALITY IS RAMPANT
ALL CHARTS HAS BEEN BLOCKED BY GOOGLE n MOSILLA FIREFOX
To see them go to source:
SOURCE: This article by David Haggith was published
on The Great Recession Blog:
Art title:
”In spite of tax cuts, wage growth
in the US falls short of the growth rate in 2007 by more than half. And
consider …” Just skip the blah
blah in the first part of the article
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[[ sincere optimism?.. or
just lies ]]
...speculators are piling back
into VIX shorts as if
the January/February debacle never happened!!!
See Chart:
And, as DataTrek Research's Nicholas Colas notes, US equity markets feel much the same way at
the moment. A few weeks ago, the mood seemed outright bearish, or
at least extremely cautious. Now, with the S&P and
Russell sneaking up on their all time highs (and the NASDAQ through it) all is
sunshine and light once again. “Too quiet” indeed.
And
nowhere is that more evident than the decoupling of VIX from 'risk'...
Trade war, meh!
See
Chart:
See other charts at:
https://www.zerohedge.com/sites/default/files/inline-images/2018-07-18_11-13-00.jpg?itok=HK71CJ3z
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US
DOMESTIC POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
"BRICK BY BRICK, WALL BY WALL, WE WILL MAKE THE BORDERS FALL..."
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At every
turn we are urged to simply believe what we are told.
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"A reckoning is due.
One the elites are already readying for..."
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[redacted]
"undermine and influence the outcome of the 2016 U.S. presidential
election in violation of U.S. criminal law"
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"Martin,
my boys are dying in Vietnam, and you won’t print the money I need."
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The move
comes amid claims by Trump's lawyer Rudy Giuliani's claim that the tape
vindicates Trump and shows no wrongdoing
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"The First U.S. Civil War is here. The real Civil War... The one between 'We the People' and the Government itself."
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US-WW ISSUES (Geo Econ, Geo Pol
& global Wars)
Global depression is on…China, RU, Iran search for State
socialis+K- compet. D rest in limbo
"The bigger NATO gets, the
weaker it gets. Instead of turning NATO into a towering, unchallengeable
global giant, it has made the Alliance
a weak joke. "
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El oro no solo reemplazara el papel moneda, dicen que se usara además
para volar a quien intente robarlo de Russia y China luego
del 1st strike (WW3) if they get
their opium dream .. you touched .. you blew it .. la
prefecta carnada para estúpidos tiburones.
"The case for gold is not
about price. It is about value. And its value will become readily
apparent when governments and individuals are scrambling amid the ruins of our
financial system looking for something,
anything, to replace worthless paper currencies..."
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SPUTNIK and RT SHOWS
US inside GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
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Todos saben
que los N-K encontraron una inmensa mina de diamantes.. A eso se apunta
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La
fustracion de Trump es que los diamantes ya no estan N-K sino en China
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Trump Growing Frustrated Over Lack of
Progress with Pyongyang - Reports
you touched you blewed
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Soccer
Ball Given to Trump By Putin Gets Security Screening next meeting they will screen Putin’B
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Commemoration
of Last Russian Tsar’s Family to Be Held in Washington When Putin comes?
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Not enough Christian.. sh(e) didn’t know that
Maria Madgalena, la amante de Jesus, fue trany y que Jesus gozo con ella los 40
dias y 40 noches de felicidad que narra la biblia.. Cuando le dijeron que eso era
Pecado.. decidió purgarlo cargando la cruz. Desde entonces los trunis
gozan d bendición divina
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Does he
needs balls’s check? Ese idiota (el attorney) es capaz de pedirlo.
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Significa
esto que los Dems & Reps están ya creando
los Super-pack-C para comprar elecciones
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RT SHOWS
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NOTICIAS
IN SPANISH
Lat Am NEW
FOCUS: alternat to neo-fascist regimes, breaks to HR, Peace & support to
US-terrorism
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Keiser Report Las razones de la guerra comercial
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GLOBAL
RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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PRESS TV
Resume of Global News described by Iranian observers..
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