ND SEP
3 19 SIT EC y POL
ND denounce Global-neoliberal
debacle y propone State-Social + Capit-compet in Eco
"Unprecedented
and extensive."
ZERO HEDGE ECONOMICS
Neoliberal globalization is
over. Financiers know it, they documented with graphics
Global Manufacturing massacre
catches up to 'Murica and stocks and bond yields tumble (after markets were seemingly
surprised that Trump and Xi shot tariffs at each other - as they said they
would - over the weekend)
On the
day, all US major indices were red (with Small Caps and Trannies
underperforming)...
See Chart:
NOTE - the initial
down opening was weakness from trade headlines and the second leg down was the
ISM manufacturing contraction
Stocks
have erased all of last week's "fake" phone call with China spike and
are back in the red from Trump's tariff tantrum
See Chart:
Treasury
yields tumbled on the day (with the short-end outperforming)...
See Chart:
30Y
Yields briefly topped 2.00% overnight but rejected that quickly to end the day
notably lower...
See Chart:
After 6
straight days higher, the DOLLAR INDEX slipped lower today...
See Chart:
WTI
Crude plunged 3% intraday, back below $54, will it pull back into the recent
range?
See Chart:
Finally,
we note that it's not like the ISM Manufacturing signal should have been
unexpected as Trucking indicators and Treasury yields have been signaling this
was imminent for weeks...
See Chart:
And as
Bloomberg's Eddie van der Walt notes, the copper/gold ratio is extending the year's declines, turning
its back on the Trump-trade era and now focusing lingering economic risks, with
2016 lows coming into play.
See Chart:
It now takes only 3.6 ounces of
gold to buy a ton of copper, that's down from more than 5 ounces earlier this
year. Changes in the ratio between the two metals are a useful barometer of investor risk appetite,
as the one acts as a haven and the other is an input into industrial
applications.
….
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If Trump is serious about his chances
of re-election next year, it seems increasingly likely that, at some
not-too-distant point in the future, he will have to choose between winning the
trade war or lending maximum support to ailing economic growth.
See Chart:
How
long will Trump wait before launching a strong policy reaction?
….
See more charts at:
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"...it
was a huge mistake for the Federal
Reserve to cut interest rates last month."
====
DYNAMIC & EFFECTS OF NEGATIVE INTEREST RATE.
Where we are? Where we go? What to do?
Hugo Adan. Sep 9/2019
I’m responsible of all that comes into brackets
This is Ponzi finance; it has turned time preference on its head, driving us to borrow from tomorrow to consume today...
Whit
Government spending, much of which is nonproductive,
With the
currency and interest rates manipulated by the State .
LITTLE REMAINS FREE.
[ Key Question: Are we in the path to American Fascism? ]
[ IF so, what to do? ]
[ Or better: What is the best way to organize a
Socialist REV? ]
….
Following on from my previous
article — “The
Pension Fund Apocalypse” - these are just a few of last month’s
stories.
- Danske Bank of Denmark introduces the first negative 10-year fixed-rate mortgage.
- The German Finance Ministry voices disappointment at the lack of demand for 30-year zero-coupon bonds.
- The U.S. and Sweden contemplate issuing 50-year and 100-year bonds.
These are all cause for concern.
In an excessively low–interest rate environment,
financial sleight of hand trumps improvement in total factor productivity every
time.
Are We Nearly There Yet?
Since the great financial
crisis of 2008–9, global economic growth has been sluggish when compared with past recoveries. The slashing of
interest rates spawned a new credit cycle, protecting the overextended
corporations and individuals who, during the previous boom, borrowed too
heavily.
The problem in 2008 was too much debt, and the
predictable knee-jerk regulatory response was to tighten bank capital
requirements.
The actual policy response took different forms from country to country.
Denmark was the first country to adopt negative
interest rates (July 2012), but it was Japan, which had been wrestling with the
fallout from the twin forces of an aging population and a credit bubble since
1989, that became the petri dish
in which financial alchemy was tested. Quantitative and Qualitative Easing
(QQE) followed, allowing the Bank of Japan (BoJ)
to buy corporate bonds and even equities. Negative–interest rate policy
followed in January 2016.
In Switzerland, and the less profligate countries
of the Eurozone, it may be too late to follow the Japanese. As
the table below shows, rates are too negative and expectations, to judge by the
slope of the one-year/two-year yield curve, are that rates will either become
more negative or remain at current levels. If an
inverted yield curve is the harbinger of recession, there may be trouble
ahead.
See Table:
For finance ministries, zero interest rates on
government bonds are a blessing and a curse. For
the first time in history, they can raise capital for nothing or even receive
an interest payment for their trouble. However, a large
proportion of that gain is due to purchases by their own central banks, which,
in purchasing these bonds at negative yields and holding them to maturity,
incur actual losses that will have to be met by their governments. There
are, of course, other bond buyers, such as pension funds and insurance
companies, that are obligated to purchase their
government’s debt obligations. Central banks do not operate in
isolation.
The Leveraged-Asset Bubble
The effect that an artificially
low interest rate has on an economy is pernicious. Asset markets are supported, and it raises the
point at which they clear, but it also reduces the need for companies to
improve internal efficiency. For
corporates, borrowing becomes preferable to issuing
equity. Firms become more leveraged. The managers of these businesses
have an incentive to improve profitability per share by issuing debt and
retiring equity capital.
For households, lower interest rates encourage
borrowing to buy assets. The
most efficient form of collateralized borrowing available to individuals is
that which is secured against property. With falling interest rates comes more
affordable mortgage financing, boosting property prices. As mortgage-servicing
costs fall, those who are able to borrow get ahead of those who are excluded by
virtue of low income or lack of regular employment. A
rentier class has always existed, but artificially low interest rates swell
their ranks substantially.
And what of the poor, the unemployed, those unable
to clamber onto even the first rung of the property ladder? Populist
politicians will seize the opportunity to pander to the dispossessed voter. They will promise boldly, knowing that, once
elected, they can lean on their notionally independent central banks and be
paid to borrow at no apparent cost. [ Why?.. to
avert rebellion and buying loyalty ]. “Until the cycle of leverage needs
to be unwound, the gravy train will rumble inexorably
onward”.
Gravy Train Still Creates Chaos
The next step in the central bank experiment may be to embrace really negative rates, not just a handful of basis
points but several percentage points. Banks will have to
charge individual customers higher fees for current account services. A bank solvency crisis may ensue as customers withdraw cash
to stuff mattresses. The velocity of circulation of money will trend
even lower.
In a recent publication from
the Federal Reserve Bank of San Francisco — “Negative Interest Rates and
Inflation Expectations in Japan” — the authors observe
that cutting rates at or near the zero bound in Japan has led to lower anchored
inflation expectations. They
advocate that central banks take preemptive action to
avoid the uncertain impact on economic activity and inflation of reducing rates
toward or below the zero bound.
In the long run, the deleterious effect of
negative interest rates turns economic theory on its head. The
concept of time preference dictates that, all other things equal, there has to
be an incentive for homo economicus to defer consumption. Positive interest rates are that incentive, and in an
unhampered market they will always be positive. If, however, interest rates are driven negative by the actions of the
state or its central bank, time preference is inverted and traditional
economic incentives are corrupted. Individuals and corporations are paid to
borrow and consume goods or assets.
The unalloyed power of this corruptive process was
evident during the asset boom of the last decade, long before interest rates
turned negative. What is not seen amid the credit-and-asset bubble
is that, for the economy to grow sustainably,
productive investment is required. Before
there can be capital available for investment, there has to be saving. In
the thrall of negative interest rates there is a clear incentive to borrow and
a disincentive to save. THIS IS PONZI FINANCE; it has turned time preference
on its head, driving us to borrow from tomorrow to
consume today.
Negative interest rates
may be driving us toward the Go-t-ter-damme-rug of the market-based
economy. Government spending, much of
which is nonproductive, is fast becoming the only driver of economic
growth. With the currency and interest rates
manipulated by the state, LITTLE
REMAINS FREE.
….
READ the full article at the source below:
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"Banks,
pensions and other private institutional reservoirs of savings die in a low or no interest rate environment.
How is this helpful to promoting growth?"
====
US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
"I started feeling sorry for him when he announced he would
run for President of the United States.You see, I had inside
information..."
====
DARPA declares war on memes...
====
"...the
Federal Reserve I think are much
more aware of what's happening than they're willing to admit..."
====
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
The
conclusion of the recent G7 summit in Biarritz could be a marker of the world order’s future – ending not with
a bang, but with a whimper.
====
They're all panicking as the global economy
implodes...
====
Guyana will be used as an "insurance policy"
if regional conflicts break out in the region.
====
The basic
issue is that the economy is very much interconnected under the laws of
physics, because energy
is required for every activity that is considered part of GDP...
----
….
Ni los precios en un mercado libre, ni el GDP
tienen que ver nada con ”laws of physics” . Decir eso es un disparate. Lo real
es que los precios del oil y el gas están siendo manipulados por grandes
corporaciones vinculadas a 2 bloques: al
aparato militar del US-NATO (Saudis) y al
bloque de empresas ligadas al SOEs
(state owned enterpreises) del Estado Ruso-Chino + aliados (Iran, Ven y otros)
quienes han logrado control de OPEC. Una honesta
relación diplomática entre ambos dos
bloques podría crear un punto medio en el precio, lo que se denominaría “potential-output-price” (otros le denominan a
este precio medio :“optimo Pareto” or “Pareto Optimality Price” (VER:
‘Economics: Marxian versus Neoclasical”). Se trata de medir los
potenciales de producción y sus límites según sean los recursos de capital,
tecnológicos, limites ecológicos y otras variables implicadas en la producción
de este recurso energético. Los neoclásicos del neoliberalism (desde Smith para
adelante) trazaron una curva en el diagrama cartesiano y le llamaron
“production posibility curve”. Pero jamás pudieron
medir nada con precisión dado los monopolios e intereses privados que
distorcionaron data a su capricho. Imposible medir eso, dijeron los Paretianos. Para estos en vez de medir con
más o con menos variables, no soluciona nada. En vez de variables hay que medir
con una constante y le cruzaron la línea en medio a la curva neoclásica para significar el óptimo de producción. Es lo
que se usa hoy para medir precios como los del Petroleo y gas. Se obvio así el problema que hoy existe: el interés
Geo-Politico en el tema. El bloque US-NATO quiere apropiarse del petróleo Ven donde ya
existe inversión RU-China. Este factor o variable debe ser desmontado y olvidado
pues está en juego la soberanía de un Estado-Nacion que tiene toda libertad
para decidir sobre sus recursos. Y sobre todo, porque
el tema Ven, pondría en peligro la paz mundial, el WW3. Lo mismo podría ocurrir
si se usa el tema “petróleo” en el medio oriente. Allí están implicados Siria,
Iran, Israel, además de turcos, saudis y el Uk.
----
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The premise for China's new strategy
is two-fold: (1) frictions between the US and China have gone far beyond trade,
reducing China's potential gains in a trade deal; and (2) damage from the
higher US tariffs to China's economy has been manageable.
====
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
FEM: Mujeres
invisibles 5 Vivian Maier David
Torres
===
ALAI ORG
====
RT EN ESPAÑOL
- Trump: "Cuando yo gane, los negocios, los puestos de trabajo y el dinero de China desaparecerán"
- El Parlamento británico se rebela contra Jonhson y le obliga a debatir una prórroga del Brexit
- La economía de Macri: lo que dijo que haría (y no hizo) frente a lo que hizo (y dijo que no haría)
- Hong Kong anuncia la retirada formal del proyecto de ley de extradición que provocó las protestas masivas
- El Pentágono desbloquea casi 4.000 millones de dólares para construir un tramo del muro de Trump
- El retorno de las FARC: cuando las élites sabotean la paz para mantener la impunidad Luis Gonzalo Segura
- Keiser Report Producir más energía al precio de "una extinción prematura" de la humanidad, y otras metas de EE.UU.
----
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INFORMATION
CLEARING HOUSE
Deep on the US political
crisis: neofascism & internal conflicts that favor WW3
No es
amenaza.. es tendencia al suicidio de los inservibles en ISR
-American Gulag: Brick by Brick, Our Prison
Walls Get More Oppressive by the Day
By John W. Whitehead
By John W. Whitehead
-Is the Fed Preparing to Topple US Dollar? By F. William Engdahl
-I Feel Sorry For President Trump By Paul Craig Roberts
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COUNTER
PUNCH
Analysis on US Politics &
Geopolitics
Nick
Pemberton Replacing
Ideology With Class
Andrew
Moss The
Many Faces of Immigration Resistance
Elliot
Sperber Revolution
or Death
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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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