ND
AUG 4 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
So what makes the $100
bill so popular in and especially outside the United States?
When U.S.
rapper Puff Daddy released his hit single “It’s All About the Benjamins” in
1997, he was way ahead of his time. Back
then, the $100 bill the song refers to was only the third most popular dollar
note, trailing the ubiquitous $1 dollar note and the $20 dollar note in terms
of circulation, but 20 years and several nicknames later, Daddy’s prophecy
would eventually be fulfilled.
However, as
Statista's Felix Richter notes, according to Federal
Reserve data quoted by the IMF, the $100 bill
became the most circulated currency in the world in 2017, overtaking the $1
bill for the first time ever. What’s even more interesting
though, is the fact that an estimated
80 percent of the 13.4 billion $100 notes in circulation
are held outside the United States, compared to “just” 60 percent of all 43
billion U.S. dollar bills.
TO See Chart:
Open ‘Statista’ : https://www.statista.com/chart/18888/number-of-dollar-notes-in-circulation-worldwide-by-denomination/
After Mnuchin clearly said that Bitcoin’s vulnerability to
money laundering is the main reason for the Treasury to regulate it tightly,
CNBC’s host Joe Kernen questioned his point in an interview on
Squawk Box on July 18.
Kernen argued that Bitcoin and other existing currencies’
capabilities to be used for nefarious activities cannot be a reason for banning
them, noting that “cash is
laundered all the time.” Mnuchin did not back off from his position, replying that such a statement is not accurate.
“I don’t think that’s accurate at all, that
cash is laundered all the time,”
The Secretary elaborated that the U.S. has the strongest
anti-money laundering (AML) system in the world, adding that the government combats “bad actors
in the U.S. dollar every day to protect the U.S. financial system.”
Following the interview, Kernen expressed sarcasm about
Mnuchin’s idea that cash has not been laundered all the time, but the
authorities are combating illicit activities in its system. He tweeted:
“‘The existing system has never been used for illicit activities but
we're going to make sure crypto is isn't used for illicit activities like the
current system.’ Got it.”
….
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"The latest announcement is a game changer. About $120bn of the
imports covered by the threatened tariffs are consumer goods, compared to less
than $50bn in total in the earlier rounds."
See Chart:
What happened?
As we
predicted just
hours before Trump's "shock" tariff announcement, Bank of
America thinks it is not
a coincidence that the tariffs were announced the day after the Fed cut rates
and ended quantitative tightening. Indeed,
as we discussed
yesterday, as a result of the phrasing in the latest FOMC statement which
bizarrely ushered in the first easing cycle in 12 years not due to domestic but
international considerations, the Fed is now
effectively underwriting Trump's trade war, as shown in the following chart (read more
here).
See Chart:
Adverse Feedback loop between the
Fed and Trade Policy
Was
Trump's announcement a negotiating tactic?
Most likely, yes... but
as BofA's Aditya Bhave notes, "that does not mean it is a bluff. We have
seen this movie before. President Trump has implemented every measure against
China that he has threatened, albeit sometimes after a delay. Prior
announcements were probably also meant to up the ante on China, but China has
consistently refused to buckle under pressure. Why should this time be
different?"
What does
this mean for the outlook?
From the perspective of Bank of America, the pattern of US protectionist
measures pointed to a desire to avoid tariffs on consumer products due to
concern about "sticker shock" for consumers. This was arguably why a large
share of consumer goods imports from China were excluded from earlier rounds of
tariffs, and why tariffs on autos and parts have repeatedly been threatened but
not implemented.
Impact on
the presidential elections.
The US-China trade war is unlikely to de-escalate going into
the 2020 Presidential elections, according to BofA. Indeed, the escalation
going into the 2018 midterms suggests that "the Trump administration views
getting tough on China as an effective strategy in the polls" according to
BofA. Meanwhile, escaping the tit-for-tat loop of more
tariffs has become next to impossible as there is growing bi-partisan support for a more
confrontational policy stance vis-à-vis China because it is a rising
geopolitical rival with a non-market economy.
But, as Bhave writes, "the latest announcement is a game changer.
About $120bn of the imports covered by the threatened tariffs are consumer
goods, compared to less than $50bn in total in the earlier rounds."
As a result, life for the Fed has become far harder in two
ways:
1. It will probably be trying to offset an even larger negative
economic shock. But even if that
shock does not materialize, the rally in rates means that the Fed will have to use up more ammunition
if it wants to meet market expectations and avoid financial tightening. The
risk is of a perverse feedback
loop in which trade-war escalation keeps offsetting Fed easing, leaving the Fed
with very little ammunition to fight the next recession, while the economy
remains relatively soft.
2-A shock
to consumer spending and confidence could also have a similar impact. So
far the US consumer has remained on solid footing because of the strength of
the labor market. Even though academic research suggests that the cost of the
tariffs has been almost entirely passed on to consumers, confidence has held
up. This is likely because the tariffs were mostly on intermediate goods rather
than final goods, and so their effects were obfuscated.
And speaking of a sudden inflation
spike, here we refer to a recent Goldman Sachs report which noted that
the bank's economic forecast had already assumed a 10% tariff on $300bn of
imports starting in September; as a result, the bank
expects these tariffs, if implemented, would increase core PCE inflation by slightly more than 20bps by
year-end. And
while Goldman's baseline forecast does not assume that tariffs rise from 10% to
25% on the $300bn just announced, nor does it assume tariffs on EU auto
imports, though both are risks. Indeed, as shown in the chart below, even
without a full-blown trade war escalation consumer inflation is about to get
much hotter. However, should the tariffs step up to
25%, and if Trump implements EU auto tariffs, watch as inflation explodes
higher.
See Chart:
A 10% Tariff Would increase Core PCE
Inflation by just over 20 vps
And speaking of the economy, Goldman estimates a GDP hit
from the 10% tariff on $300bn of China imports of 0.1-0.2%, on top of a 0.2%
hit from the tariffs imposed to date. This means
that the combined GDP drag would
rise to 0.5-0.6% if the tariff rate on $300bn of China imports were raised to
25%, and to 0.7% if 25% tariffs were imposed on EU auto imports.
In other words, if Trump allows trade war to escalate -
ostensibly to extract even more rate cuts out of Powell - prepare for the most painful
stagflationary clusterfuck the US has observed in decades, one which a disgusted
Powell may simply resign instead of deciding to tackle head on.
Unintended
consequences
Most importantly, it could extend ongoing global monetary easing. About half of the central banks that we cover have cut
rates this year, and many more cuts are likely in the
pipeline as further escalation in the trade war likely leads to an even
weaker outlook for global (particularly Chinese) demand.
Speaking of pipelines, there
could be major implications for oil for two reasons. First, weaker
global demand would likely weigh on oil prices. Second, there is now a greater risk that China will decide not to comply with the US oil
sanctions against Iran. This would
ease global supply conditions, leading
prices even lower. Brent was down more than 3% on Thursday after the tariff
announcement. This could result in a further deflationary impulse across the
core inflation supply chains, which accelerates the Fed's rate cutting
schedule.
Indeed, as BofA points out, "a big drop in oil prices would suppress inflation
expectations, making it even harder for the major developed-market central
banks to reach their inflation targets. Again, this would mean
lower global policy rates, which in turn would imply that Fed easing might not
have much impact on the dollar."
Meanwhile, Trump's frustration with the strength of the
dollar could push his Administration to "retaliate" by intervening in FX markets (a
discussion of how it could do it can
be found here) or
imposing tariffs on countries whose currencies are deemed to be too weak, or as BofA puts it, "a tangled web indeed."
In short, World Trade War III.
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Here the billionaires theory on MMT
Modern monetary theory is not so theoretical
anymore. In all
but name, it’s the description of Republican fiscal policy in this living
moment...
Modern
monetary theory is not so theoretical anymore. In all but name, it’s the description of Republican fiscal
policy in this living moment. “Federal Borrowing Soars as Deficit Fear
Fades,” said
the headline on page one of Tuesday’s Wall Street Journal. For the second year in a row, the
Trump administration is spending $1 trillion more than the government expects
to extract from the taxpayers.
FEW HANDY PRECEPTS.
The first is
that money is the government’s creation, not
society’s. It derives its value from the fact that you can pay your taxes with
it.
Lerner wrote in 1947, “at the present time, in a normally well-working economy, money is a
creature of the state. Its general acceptability, which is its all-important
attribute, stands or falls by its acceptability by the state.”
The second big idea
in MMT concerns the nature of the public DEBT.
There’s nothing to fear from it, said Lerner - at least, not if a government can borrow indefinitely in its own currency.
“The greater the national debt,” the economist
wrote, “the greater is the quantity of private wealth.
The reason for this is simply that for every dollar of
debt owed by the government, there is a private creditor who owns the
government obligations...and who regards these
obligations as part of his private fortune.”
Lerner carried the
argument to its logical Keynesian conclusion: The greater our collective fortune, the less we
need to save. The lower our savings, the
greater our spending. The greater our spending, the higher the level of our
employment.
More clear? Here I
goes:
“The greater the national debt, the greater is
the quantity of private wealth” and, hence, the lower the need to borrow.
Now that
dollars are fashioned from paper or (an even lighter-weight material) digital
keystrokes, formal default is unnecessary. The government can print whatever it needs to service its fixed charges.
The question is whether the creditors will cheerfully accept the currency so
effortlessly tossed off the 21st-century presses.
In short:
I have arrived at
one certain conclusion: The word “modern,” written
or spoken in the fiscal, monetary, or financial context, is trouble - nothing
but trouble.
….
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While many users will mourn the loss of their privacy, the bright side of these standards is the
ability to integrate the crypto market into traditional financial markets,
which can lead to a significant increase in usage...
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The Fed is Pushing on a String – and a meaningful market
decline might lie ahead once investors
realize that the cost and availability of capital is not what is holding back
the global economy...
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
Gun control will worse gun-violence
environment. 1. It is un-constitut. 2.Could be resisted with police
fatalities. 3. It force to hidden weapons bought in US shadow market. THE PROBLEM IS WAR-MONGERISM. To solve the
pro-gun-violence involvement we have to stop world wars and brutal violence in
countries who resist our policies. The world press can’t hide such problem and
we can’t silence them. To stop war abroad we have to
stop the production of WMD and nukes-missiles related guns. We have to
call the UN Gral Assembly to dismantle nukes worldwide. Peace & bring troops home must be our 1st priority concern at domestic & geopolitical level.
…
“This has been going on for years, for years and years in our
country...We have to get it stopped,”
….
YES, for years & years we have the nasty
habit of feeding the Mil-Indust-Compl
====
What they want to stop is not OAC
but SOCIALISM… Riddiculous
accusation!. What she did is the common practice of REPs and DEMs political
parties since Super-PACs were made legal. Why do not investigate them? Do they
thing socialism will be hurt and stop working politically?
On reverse: we can
prove that Hillary Clinton, Obama & Trump & CURRENT
candidates are involved in such practice (worse in the case of Trump. In this case is naked fascist corruption). So Trump should stop this
abuse and foster instead real political democracy in our country. What goes
around comes around.
Don’t allow this boomerang hit your presidential
expectations. It will be. An socialism
will not be stopped, it will grows up. IF THEY WANT TO
PLAY ‘FASCIST” TACTICS.. worse even .
So, Mr
President: do what is in your
hand to stop this abuse on AOC. Remember you were involved in PACs during
& after elections. You may start cancelling PACs, but no hitting AOC intentionally. That is a boomerang.
…
"Socialist"
====
Trump sense of ‘diplomacy’ divided our investors, even
speculators in Wall Street
Massacre after massacre, they cranked away. By 2019, they had
produced the longest economic expansion and equity bull market in American
history.
…
Our diplomacy with China pivot this
problem. I do believe Trump can solve this problem. How? ..It depends on how
much Gvt can pay for guide-lines step by S
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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
Trump
overruled all of his advisors - with the exception of trade hawk Navarro - when
ramping up tariffs on China "after a heated exchange."
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We suspect
an angry tweet from President Trump is imminent as China 'weaponizes' its currency...
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"Use
of cluster bombs by the Indian Army violating international conventions is
condemnable."
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Mexico will undertake "effective,
swift, expeditious and forceful legal actions to protect Mexicans in the US...
in accordance with international law."
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
-China Yuan Falls Below 7 to US Dollar Over
Trade War Si USD sube export menos
It is FED violation
against polit-Freed to Socialists.Typical nazi move agst oposition
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
RT EN
ESPAÑOL
- "¡Tenemos que acabar con esto!": Trump tras los dos tiroteos masivos en 24 horas
- FOTOS: Todo lo que se sabe sobre el tirador de Dayton, que mató a 9 personas en menos de un minuto
- VIDEO: Irán publica imágenes de la captura del petrolero extranjero en el golfo Pérsico
- Qué se sabe hasta ahora sobre Patrick Crusius, el tirador de Texas que publicó un manifiesto antihispano antes de la masacre Se necesita estudio forensico para saber si las balas pertenecen a su arma o las de la policía. Manif falso?
- La India prueba con éxito un sistema de defensa aérea "de la reacción rápida" en medio de las tensiones con Pakistan
- A un año del atentado contra Maduro en Ven: ¿qué se sabe de los responbl?
- Rusia acusa a EE.UU. de robar yacimientos de petróleo en Siria
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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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