ND AUG 14
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
Is every thing awesome?
Since
Powell cut rates, Bonds and Bullion are up 6%, Stocks are down 6%, and the
dollar is unchanged...
See Chart:
The duration of the bond is set
to be around 44 years, making it the bond with the highest duration in the euro
zone government debt market.
Ugly
day for US stocks (down broadly 3%) as stops were run yesterday and dismal data
from China and Germany sparked a big de-risking...
See Chart:
And
stocks on the week...
See Chart:
Today's dump occurred after a 3rd failed test of the
Fib 61.8% retrace of the July tumble.
See Chart:
The Dow
closed below its 200DMA
See Chart:
Bank stocks were battered, once
again catching down (relative to the broad market) to
the collapsing yield curve (how many more false starts in financials will
traders willing bid for)
See Chart:
Treasury
yields collapsed today, led by the long-end (30Y -13bps, 2Y -8bps)...
See Chart:
The 30Y Treasury yield tumbled to an all-time record
low today, trading as low as 2.01%...
See Chart:
And the
10Y term premium tumbled to a record low...
See Chart:
The
yield curve completed its inversions today with 2s10s finally crossing the zero
line...
See Chart:
Negative-yielding
debt continues to soar...
See Chart:
Finally, as Albert Edwards
warns:
"The
answer seems pretty obvious to me. The
bond markets are telling us that the cycle is ending with the central banks
having failed to drive core CPI inflation higher.
So Japanese-style outright deflation lies ahead
at a time when western economies have piled debt sky high."
Who could have seen that
coming?
Gold
tops stocks YTD and bonds are about to overtake the S&P too...
See Chart:
The
dollar shortage continues...
See Chart:
Tremendous amounts of money pouring into
the United States. People want safety!
— Donald J. Trump
(@realDonaldTrump) August
14, 2019
….
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The typical
pattern is the yield curve inverts, the S&P 500 tops sometime after the
curve inverts and the US economy goes into recession six to seven months after
the S&P 500 peaks.
Because of all economic indicators, this one is without doubt the most
foreboding and ominous. Consider that 2s-10s yield curve inversions have
preceded the last seven recessions and nine out of the last 12 recessions. In
fact, as Bank of America points out, there was one yield curve inversion in the
mid 1960s that did not precede a recession and the yield curve did not invert
ahead of the three recessions between the mid 1940s and early 1950s. However, in the past 5 decades, a 2s10s inversion has been a
guaranteed signal that a recession is imminent.
See Chart:
See more charts at:
….
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5 Things Every Trader Needs To Know About Rates
5. What’s Priced In
-50bps is now the base case for September.
4. Curve Inversion
Read any sell-side literature & you’ll quickly find that the shape of
the curve is one of the most widely followed “recession predictors” available,
where a flat curve indicates a higher likelihood of recession. When this
flattening becomes so pronounced that the yield on the longer tenor falls below
the yield on the shorter tenor, it’s referred to as inversion – something
that’s happened only a handful of times. We’re now
sitting at the most inverted levels in the last 30 years for the spot 2s/10s
swaps curve. But, caution against extrapolating that into the meaningful
“recession predictor” that the street seems to love.
See Chart:
Here’s the same curve, but in Treasury space (not swaps). This is the
curve that you’ll hear pundits hyperventilating over whenever it dips below 0
(which it did, ever so briefly, this morning).
See Charts
3. Funding
The Dec 19 future associated with this spread is now
at its widest levels since early February 2018.
See Chart:
2. Positioning
Hedge funds are more long the front-end of the interest rates market
right now than at any historical point on record. Yes, rates are low – and
the largest positions in the hedge fund community are
setup to profit if they go even lower (yellow line shows net
position).
See Chart:
1. Negative Rates
Negative Rates are to 2019 what Beanie Babies were to the 90s. They might
be great for price appreciation during times like these, but if you’re
expecting them to return your love in the way, say, a “positive” yielding
investment will – you’re sadly mistaken.
That all being said. Consider this for a moment. The 0% coupon German
10yr note currently yields about negative 0.70%. It hasn’t yielded more than
positive 1% since 2014. But if you’d invested a
million dollars in German 10yr bonds 6 months ago, you’d have made more in 6
months than you would make in interest on the US 10yr Treasury – from now until
2025.
Currently, we’re at -1.21%. That’s easily the lowest
since the Fed started tracking this in 1960.
See Chart:
….
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With
little else in place for shelter, the
US dollar served as a safe haven. It remains to be seen if this will
also be the case when the next
financial disaster happens...
President Donald Trump wants a lower US dollar. He complains
about the over-valuation of the American currency. Yet, is he right to accuse other countries of a “currency
manipulation”?
Trump is right. The American dollar is overvalued. According to the latest version of the Economist’s
“ Big
Mac Index,” for example, only three currencies rank higher than the US
dollar. Yet the main reason for this is not currency
manipulation but the fact that the US dollar serves as the main international
reserve currency.
Yet the international reserve status comes also with
the curse that the persistent trade deficits weaken the country’s industrial
base.Instead of paying
for the import of foreign goods with the export of domestic production, the
United States can simply export money.
American Supremacy
After each of the two world wars in the 20th
century, the United States emerged as the largest creditor country, while the
war had ruined the economies of the war-time enemies along with that of the
major allies. After the end of the Cold War, this pattern would experience a
repetition. The United States, so it seems, has been, since then, the only
remaining superpower.
The
public debt ratio, which had been falling since the end of the war began to
turn-around in 1982 and has been rising ever since (Figure 1).
See Chart:
With this debt creation came a new phase of global
expansion of the dollar. The
spread of the dollar provided the basis for the economic performance and the
military position of the United States. Yet this time, the new structure that
has emerged is outwardly powerful but inherently fragile. It is not economic
strength that provides the foundation of the role of the US dollar in the
international monetary system, but it is the US dollar's financial role that
provides the basis for the United States to maintain and extend its global
activities
While
the parallels fit insofar as the current system provides similar benefits to
the participants, the present
structure is even more flawed than the older scheme, which broke down due to
its inner contradictions.
Bretton Woods
The decoupling of the European currencies from the
dollar progressed step by step and finally led to the introduction of the euro in 1999. As of now, the euro is equal to the US dollar in the
size of its internal use, yet as a global currency, and particularly as an
international reserve currency, the US dollar still dominates majestically
(Figure 2).
See Chart:
The Bretton Woods System as it was established by
the end of World War II bestowed an “exorbitant
privilege” to the United States when the dollar
became the point of reference for the international currency system following
the Bretton Woods
Accord. With the other member countries fixing their currencies
to the US dollar, and the US dollar officially fixed to gold at $35 per troy
fine ounce, it seemed as if an ideal construction was found in order to avoid
international monetary disruptions and to provide the framework for global
economic expansion.
he gold
anchor was aimed at preventing an excessive production of US dollars
by the US government. When foreign countries had a trade surplus,
they were formally allowed, according to the Bretton Woods Accord, to exchange
the excess dollars for gold from the American Treasury. With a stable parity
between dollar and gold, this would have restricted dollar creation. France took the agreement literally and demanded gold from
the United States instead of accumulating dollars as international
reserves.
Originally in the BW1 treaty, it was stipulated that
the modification of currency parities should be an exception rather than a
rule. But in the course of the 1960s, the international monetary system entered
into a phase of high instability when fixing and re-fixing of foreign
currencies to the dollar became a huge concern. The
perverse monetary system that emerged created a bonanza for currency
speculators. The candidates for exchange rate revaluation — such as Germany or Japan — were easy to identify.
In 1971, with the so-called "Smithsonian
agreement," a final attempt was made to save the old system when the
United States devalued its currency against gold and a series of other
currencies. However soon thereafter, it became obvious that there was no chance
of revival for the old regime. In 1973, with the adoption of the new rule that
each country could choose its own currency arrangement, the Bretton Woods
System was officially declared as dead.
In the 1990s, the triad of global dominance seemed
well in place for the United States: unrivalled military might, a booming and
innovative economy, and the status of undisputed issuer of the global currency. The US dollar experienced
another period of strength. Since 2002, however, the long-term trend toward a
weaker dollar is back in place, interrupted by lower
peaks of the waves of strength (see Figure 3).
SEE
Chart:
The Dollar and US Foreign Policy
In the 1990s, the monetary policy of the United
States became an instrument of a grand geostrategic enterprise. The
neoconservative movement took this constellation as it emerged in the 1990s for
granted and implemented a policy that was based on a philosophy that assumed
with almost religious confidence that it was the duty and right of the United
States to be the hegemon in the 21st century. In contrast to the time after the two world wars,
however, the rest of the world outside of the United States did not lay in
ruins.
Changing of the Guard
The easy monetary policy of the United States has
accelerated the de-industrialization at home and has fostered industrialization
abroad (predominantly in China and in the rest of Southeast Asia); it has
produced a situation that stands in sharp contrast to the end of World War I
and World War II. Under the new BW2
system, the United States is no longer the largest creditor with the largest
industrial base, but instead has become the largest international debtor.
Imperial politics requires expansive monetary policy, and
the consequence of it shows up in persistently high trade deficits and a
deteriorating external investment position (Figure 4).
See Chart:
Being the issuer of a global currency provides huge
benefits that come with a curse. Increased
private and public consumption possibilities come from the privilege of getting
goods from abroad without the necessity of producing an equivalent amount of
tradable export goods. While other countries have to export in order to pay for
their imports, the sovereign who emits a global
currency is exempt from adhering to the most fundamental law of economic
exchange.
History,
and in particular economic history, always shows both: common features and
differences, and indeed, the American Empire is different from some of the
former empires. Yet what the United States has in common with the former
imperial states is that at some point the military extension becomes too
complex to be handled efficiently and thus becomes too costly.
Different from the factors that justified the
expectation of a coming demise of the dollar in 2007, the American currency has
experienced a new spring due to the financial crisis of 2008. With little else in place for shelter, the US dollar served
as a safe haven. It remains to be seen if this will also be the case when the
next financial disaster happens.
….
SOURCE: https://www.zerohedge.com/news/2019-08-13/why-dollar-rules-world-and-why-its-reign-could-end
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And for the first time ever, the entire UST curve is below 2.00%...
See Chart:
….
See
more charts at:
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
As
attitudes toward war grow dangerously worshipful in the US, quitting our endless wars becomes all the
more difficult...
====
So far, Big Pharma has watched the
cannabis industry from the sidelines, deterred by regulatory concerns. But the
sleeping giant’s takeover is slowly intensifying as more patents, partnerships,
and sponsored clinical trials come to fruition.
====
"THANK YOU to clueless Jay Powell and the Federal
Reserve. "
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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
Wishful thinking :
The new “Cold War” is here. Get used to it.
====
Throughout the history of the world, many civilizations have risen and fallen.
VIDEO:
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“It
is important for the country to
diversify away from the US dollar. Over the long run, even
relatively small-scale gold purchases add up and help to meet this objective.”
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SPUTNIK
and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
- Bolton
Accuses Russia of Stealing US Tech, Gets Tough on China, Gives Flaccid Support
to Venezuela
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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
REBELION
Ecua: 40
años entre "democracia" y desengaños JJ. Paz-y-Miño Cepeda
Huawei: América
Látina y trumpismo (II) Carlos
Jenkins
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ALAI ORG:
====
RT EN ESPAÑOL
- "Que primero trabajen humanamente con Hong Kong": Trump afirma que China quiere llegar a un acuerdo comercial
- Economía argentina en pausa electoral: entre el 'terrorismo financiero' y el afán de calmar a los mercados
- Maduro acusa al expresidente colombiano Álvaro Uribe de orquestar un plan para asesinarlo
- El primer ministro pakistaní promete dar "una lección a la India"
- "Un paso en falso causaría una explosión": Bolton insta a China a tener cuidado con sus acciones respecto a Hong Kong
- China podría lanzar criptomoneda y serviría como impulso para otras
- México insiste en que la matanza de El Paso es un acto terrorista
- Keiser Report "La línea de resistencia oro-dólar caerá al igual que la Linea Maginot durante la Segunda Guerra Mundial"
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INFORMATION
CLEARING HOUSE
Deep on the US political
crisis: neofascism & internal conflicts that favor WW3
-US, UK Hong Kong Hypocrisy By Finian Cunningham
-China And the Zombies Of The Past By Christopher Black
-How Tehran fits into Russia-China strategy By Pepe Escobar
-The Epstein Mystery By Paul Craig Robert
-Epstein, Faction, and Neopatrimonialism By Dan Corjescu
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COUNTER
PUNCH
Analysis on US Politics &
Geopolitics
John W.
Whitehead We’re
All Enemies of the State
Kollibri
t-S The
Case Against Voting for President
Elliot
Sperber The
New Mayor of New York
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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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