ND APR 26 19 SIT EC y POL
ND denounce
Global-neoliberal debacle y propone State-Social + Capit-compet in Eco
ZERO
HEDGE ECONOMICS
Neoliberal
globalization is over. Financiers know it, they documented with graphics
BUT..
Volume continues to collapse...
See Chart:
S&P
500 vs. Volume
VIX
ended the week higher despite the S&P green...
See Chart:
Breadth
continues to lag...
See Chart:
Stocks
and bonds bid on the week...
Despite
the strong GDP print, Treasury yields tumbled on the day (and week)...
See Chart:
With
10Y Yield back below 2.50%!!
See Chart:
The
Dollar ended higher on the week but lagged in the back half of the week,
sliding notably after GDP...
See Chart:
DXY
Dollar Index
Finally,
we wonder, with the tumble in global
money supply, is the bounce over?
See Chart:
READ
D.ROSENBERG ON GDP DATA
This was a
low-quality GDP report. All one-offs - lower imports,
higher inventories & Pentagon spending. Real final private sales a puny
1.3%. Removing more lipstick from this pig shows cyclically-adjusted GDP contracting at a 2% annual rate; deepest decline in
nearly a decade
The proof
of the underlying soft underbelly to GDP lies in the price. That 0.9% reading in the GDP price deflator was the lowest
since the first quarter of 2016, but back then, oil prices were melting
whereas in Q1 they soared.
….
SOURCE:
https://www.zerohedge.com/news/2019-04-26/dow-drops-nasdaq-pops-after-chinas-worst-week-6-months
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We
can now begin to see how the debt crisis will evolve, leading to the destruction of the dollar...
US Government borrowing is out of control
There are a number of Western governments whose accumulating debt has
become so large relative to their economies that their finances are undeniably
out of control. For the purpose of this analysis, we shall restrict our attention to that of the US Government,
because it is the issuer of the world’s reserve currency.
Despite the
Fed’s suppression of interest rates over the long-term, the cost of federal government borrowing has escalated noticeably, as the
following chart up to fiscal 2018 clearly shows.
See Chart:
Federal
Interest Annual $m
My
colleague, James Turk, calculates the US Government’s insolvency ratio (the
interest cost as a percentage of government revenue) to be 17.2% for the first
six months of fiscal 2019.[i] In other words, for every $100 raised in
taxes, $17.20 goes to pay interest. On this measure, federal government
finances are already in crisis.
The problem can be viewed from another angle: there
has been insufficient growth in nominal GDP to produce the taxes to finance the
debt. In the absence of GDP growth,
the only way the threat of escalating debt can be addressed is by eliminating
the federal deficit. Under current policies, that is not happening, and
according to the CBO, budget deficits are set to increase out to 2028 at least.
Since the Lehman crisis in 2008/09 the US
Government has been using a singularly bad escape route from the GDP problem by
fiddling the inflation figures. To appreciate the full ramifications, we need to understand what GDP
represents. GDP is simply a total of recorded qualifying transactions in the
economy during a stated period, normally annual or annualised. Growth in the
GDP number is not a record of anything else other than monetary inflation
applied to those qualifying transactions. In other words, the solution to the
lack of inflation in the GDP number is to simply inflate it. This is done
through accelerated quantitative easing and by the Federal government
increasing its spending in the domestic economy.
One of the oldest clichés in politics is you can fool
all of the people for only some of the time. There will come a point where all
of the people, collectively the markets, wake up to state-sponsored statistical
fraud. With price inflation appearing to accelerate, public apathy over price
inflation will be replaced by a substantial and possibly sudden adjustment to
money-preferences relative to goods.
The foreign dimension is changing things for the worse
The most
inflationary funding mechanism is for one government department (the treasury)
to issue bonds to the public and the banks, and another government department
(the central bank) to buy them off the public and the banks by issuing raw
currency. So as to not raise inflationary suspicions, this overtly inflationary
mechanism is called quantitative easing and it is set to return big-time.
So
far, QE has covered only part of the US Government’s funding requirement since
the Lehman crisis. The full breakdown is shown in the following table, which
incorporates both long-term and short-term debt.
See table:
US
Government funding 2009-2019 -$bn
How an increasing budget deficit intensifies the slump
Assuming there is no change in the savings ratio,
the twin deficit phenomenon suggests that an increasing budget deficit will be
matched by an increasing trade deficit. (A fuller explanation of the relationship between the deficits and
changes in the level of savings is to be found here.)
The source of confusion over what is a simple accounting identity is the
Keynesians’ denial of Say’s law, incorrectly described by Keynes himself in
his General Theory. The correct interpretation of Say’s law is that
socially active humans specialise in their production to acquire the goods and
services they don’t produce yet need and desire. Money is no more than the
transmission mechanism which turns production into consumer goods. Money saved
turns production into future goods. It is why the division of labour works to
improve our living standards more effectively than any other form of social
cooperation.
The key bit is the role of money. Through their control of currency,
governments and their licenced banks inflate its quantity. More currency in
circulation acts on demand without it being earned and therefore the extra
goods and services being produced. Inevitably, prices tend to rise as that
money is absorbed in the existing framework of production and consumption. And
when prices rise, demand switches to extra imports.
If
people saved the inflated money, it would not fuel consumption and therefore a
trade deficit would not arise. But Keynesians discourage saving, and as noted
earlier in this article, their misplaced policies have virtually destroyed
personal savings, except for institutionalised pensions and insurance funds. Allowing for consumer debt, to all intents there are no consumer
savings in America. The budget deficit is therefore financed almost entirely by
inflationary means, so when an economic slump increases the budget deficit, it
must also increase the trade deficit.
Far from
maintaining demand levels an increase in the budget deficit, by leading to an
increase in the trade deficit, has a catastrophic effect on domestic
production. This is because in slump conditions an increasing trade deficit
will simply displace domestic production.
.. Therefore, unemployment will rise, and the
currency will fall.
Why bond yields will rise, and the dollar will fail
In the
great depression, the dollar was convertible into physical gold at $20.67 to
the ounce, and then notionally at $35 from January 1934 onwards. This meant
that the interest cost to the US Treasury reflected that of lending gold plus a
premium for issuer risk. Today, there is no gold
backing, and lenders are aware they must take currency risk into account.
So long as lenders believe government finances are reasonably stable and
state-issued statistics are credible, a central bank can depress borrowing
costs through an expansionary monetary policy. This is the current position; but when it is no longer the case, a central bank faces an
impossible task.
If my
thesis that a combination of trade protectionism and the top of the credit
cycle is leading the global economy into an economic slump is correct, the consequences will dramatically undermine
the US Government’s finances for the reasons detailed in this article.
It will soon become obvious that the US Government, along with all other high-spending states, is caught in a
debt trap of its own making. The
folly of post-Keynesian economic and monetary policies, designed to justify
governments’ economic existence, will be fully exposed. And as bond
yields and the dollar head towards an Argentinian adjustment, the days of the dollar and dollar-denominated debt will be
numbered.
[[ These are extracts.. read the full article ]]
….
SOURCE: https://www.zerohedge.com/news/2019-04-26/us-government-ensnared-debt-trap-and-theres-no-escape
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If that sounds terrible to you,
that is because it is terrible...
At this moment,
we are told that only
6.2 million Americans are officially “unemployed”, and that sounds
really, really good.
But
that is only half the story.
What the
mainstream media rarely mentions is the fact that the
number of Americans categorized as “not in the labor force” has absolutely
exploded since the last recession. Right now, that number is sitting at
95.577 million.
SEE Chart:
NOT
in Labor Force
When you add 6.2 million “officially unemployed”
Americans to 95.577 million Americans that are categorized as “not in the labor
force”, you get a grand total of almost 102 million Americans that do not have
a job right now.
See Chart:
Unemployed + Not in Labor Force
But overall, the truth is that the level of
unemployment in this country is not that much different than it was during the
last recession.
Another “honest” indicator that I like to look at is the civilian labor force
participation rate.
Just before the last recession, the civilian labor
force participation rate was sitting at about 66 percent, and that was pretty
good.
But then
the recession hit, and the civilian labor force participation rate fell below
63 percent, and it stayed between 62 percent and 63 percent for an extended
period of time.
So where are we today?
At
this moment, we are sitting at just 63.0 percent.
See Chart:
US
Labor Force Participation rate
Does that look like a recovery to you?
Of course
not.
And now the U.S. economy is rapidly slowing down again, and most
Americans are completely and totally
unprepared for what is ahead.
The economy is not going to get any better than it
is right now. As you look forward to the second half of 2019, I would
make plans for rough sailing ahead.
….
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US DOMESTIC POLITICS
Seudo democ
duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
If the Democrats don’t impeach Donald Trump, that official narrative might
fall apart. Liberals might have to face
the fact that Americans elected Donald Trump president, not because they
were brainwashed by Russians...
….
NOT time
for CIRCUS: We can’t vote REPs & DEMs.. both are
deeply evil.. We can’t vote the lesser evil anymore.. THAT IS NOT
DEMOCRACY. In a fair.. not fraudulent election..the socialist will win either as
independent FRONT or as DEM-S (democratic socialists) .. but they will be
allied in fraud to prevent socialist to register & win.. Election for socialist is a time to
creating people’ Fronts and alliances to take power after elections. Before
elections we will march streets with all those who are in favor of 3
demands:
Impeachment of Trump, Peace not war & electoral abstention if not accepted the 3rd option: the
socialists. In the eve of election We will promote
ABSTENTION at national level. After elections we will
demand the recogntion to only those who
got more than 50% of votes from the
total electorate in every region or State. Then we will call REFERNDUMS TO DEPOSE the ones who win with FRAUD and call
for new elections. The corrupted alliance-parties (Dems & REPs) either
recognize the right for socialist to run as independent Front or as DEM-S with
S for socialists, or FACE THE CONSEQUENCES: fake or poor legitimacy (high
level of social – political conflicts & violence); Imposible degree of efficacy and total lost of confidence.
Meaning : imposible GOBERNABILITY (incapacidad para cumplir las promesas electorales). His-her impeachement will be fast and new election
will be called. SO:
No more votes for lesser evils either Dems or Reps. The socialist are
prepared to fight and take streets during the 3 stages of this political process (before, during and after election). WE WILL WIN. Our fight is for SOCIALISM in the US & we will get it PEACEFULLY.
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Whatever
the merits, the real reason they have
been opposed by monetary elites is that they are “friends of Trump” and
will hold Jay Powell’s feet to the fire to cut interest rates and keep the economic expansion going ahead of
the 2020 election.
====
"Under my administration we will never surrender American sovereignty
to anyone..."
…
Una cosa es nuestro derecho constitucional a defender nuestra vida con
armas (nada que ver con la ONU) y otra dstinta es el desmentaje del Ado para
preservar la PAZ contrando el ensamble nuclear y su venta.. esto si correponde
a la ONU y Trump burlo ese principio y Ado internacional.
====
US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global
depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
Once
you see the whole thing, you can’t unsee it...
…
China
tiene el derecho soberano a no usar USD en sus transaciones comerciales
internacionales y nosotros tenemos el derecho soberano a NO usar Yuans. Ni nosotros podemos imponerles el USD ni ellos el
Yuan.. a menos que haya un acuerdo firmado entre ambos paises.. Existio eso? Quien
lo violo? Lo mismo con Europa
y otras naciones. Quien es violador de Acdos?
….
This article instead leaves you with the impression of a triviality, a
mere interesting if odd aside amongst far more central conversations driven by
important men and women of high office. A footnote,
perhaps. Those Economics shadows on the wall do command the bulk of each
prisoner’s attention and consideration.
Having briefly described “what”, it is never asked
“why.” Why? How can it be that China’s most important banks are
increasingly short of US dollars?
See Chart:
The Wall Street Journal reported
yesterday that China’s banks are running short
of dollars. Shocking, I know.
China’s major commercial banks have a funding issue outside Beijing’s
control: They’re running low on the U.S. dollars they
need for activities both at home and abroad.
Regular, longtime readers here will wonder what
took the Journal so long to write something like this.
The article would’ve been slightly helpful had it been written in 2014 when China’s dollar problem first turned deadly
serious.
See Chart:
Both charts has been changed .. it doesn’t describe our relac with China
Next chart is important: it gives a glimpse of US trade balance from
2007-14 & on..
See chart:
Fed Reserve assets, Central Bank Liquidity swaps
For once, at least, they can’t blame “rate hikes”
and QT [[QTs create the chaos with China.
They worse our trade with them ]] China’s growing
dollar problem, even what the Journal can make of it (chart
included), predates both by many years. Even if you are chained in
Plato’s cave, it is enough of a different sort of shadow to make you think there
is so much more going on out there in the real world. In our shadows.
[[ FACT: China
did not create our problem .. blame them is mere
xenophobia. We can’t compete with them.. They’ve a huge domestic-Region
market to sell-bay their products.. Us can’t sell polluter cars to them.. China
is the best seller of electric cars.. We can’t force
them to buy our garbage anymore ]]
….
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"We call [the design] the double wave rider."
====
"Waiting 19 hours for gas in a lifeless city"...
====
The cause of such a war - the stated point of contention
between India and Pakistan - is Kashmir.
They both want to have Kashmir. And, just to complicate things, some Kashmiris want full independence...
====
SPUTNIK
and RT SHOWS
GEO-POL n
GEO-ECO ..Focus on neoliberal expansion
via wars & danger of WW3
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NOTICIAS
IN SPANISH
Lat Am
search f alternatives to neo-fascist regimes & terrorist imperial chaos
REBELION
Quien mate aL “ladrón”, tiene 100
años de perdón V S
ECON Existe burbuja en el mercado del alquiler? J M Muñoz
ECON Existe burbuja en el mercado del alquiler? J M Muñoz
Boliv Un amnésico como presidente? No gracias A Condarco
Ecua Por qué está preso Ola
Bini? Byron Guerra
====
ALAI ORG
====
RT EN ESPAÑOL
- Putin: "Evaluamos simplificar la concesión de la nacionalidad rusa a todos los ucranianos"
- Moscú: "Saludamos la idea de Trump de reducir armas nucleares pero no podemos considerarla sin conocer los detalles"
- La guerra contra el opio en Afganistán: ¿Un ataque a las fuentes de financiación terrorista o simple despilfarro?
- Trump se burla de los migrantes centroamericanos que piden asilo en EE.UU.
- Putin sobre Bútina: "La arrestaron sin tener nada de qué acusarla y ahora intentan justificarse con su condena"
- Maduro: "Es una vulgar maniobra del imperio de EE.UU. pretender defender el legado de Chávez"
- Ecuador envía buques y aviones a las Islas Galápagos ante la presencia de una flota pesquera china
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism
& internal conflicts that favor WW3
-Trump Has Murder Over 40,000 Ven With
Sanctions By Caitlin
Johnstone
-
J Carter: US is ‘most warlike nation in
history’ By Brett Wilkins
-
Evaluate War’s True Costs, Including Massive
Debt By Ed Flaherty
-
Evaluate War’s True Costs, Including Massive
Debt By Ed Flaherty
-
Clouds gather above the Middle East: war or
no war By Elijah J Magnier
-
Washington Has Destroyed Western Liberty By Paul Craig Roberts
-
You Are Being Lied To About Julian Assange By Lee Camp
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COUNTER PUNCH
Analysis on
US Politics & Geopolitics
Vincent
Navarro Why
Left Wing Populism Is Not Enough
Peter
Linebaugh The
Earth for Their Possession
Conn
Hallinan Turkey:
Revenge of the Kurds
Brian
Cloughley Continual
Confrontation in the South China Sea
John
Whitlow Coming
of Age at the End of History
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GLOBAL
RESEARCH
Geopolitics
& Econ-Pol crisis that leads to more business-wars from US-NATO allies
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DEMOCRACY
NOW
Amy
Goodman’ team
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PRESS
TV
Resume of
Global News described by Iranian observers..
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