ND
OCT 8 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
What we are seeing at present is only the latest stage of a widening gulf between sober policymakingand
a body of economic theory divorced
from the realities of human action...
On the
morning of Monday, September 15, 2008, at 6:55 a.m., I arrived at my turret on
the trading floor of a Manhattan-based hedge fund and flipped on my Bloomberg terminal. As
the head of trading, I was in the habit of looking at sovereign debt markets
before checking our positions from the previous trading day. But on this
morning, reviewing world bond markets took on a particular urgency. Lehman Brothers was filing for
bankruptcy and the entire world was in the throes of the worst financial crisis
in 75 years.
See Chart:
What I saw
was that, all over the world, short-term debt markets - “bills,” in industry
parlance - showed negative yields. In virtually every industrial
nation, firms and individuals were seeking the safety of the printing press,
effectively handing $100 to governments for the assurance of receiving $98 in
four weeks.
Fast-Forward One
Decade
Currently,
the Danske Bank of Denmark is in the process of introducing
the first negative 10-year fixed-rate mortgage. In recent
weeks, the German Finance Ministry has voiced disappointment at the lack of
demand for 30-year
zero-coupon bonds. And with early anticipation of a recession, the U.S. and
Sweden are contemplating issuing half-
and full-century bonds, even as the U.S.
president is urging the Federal Reserve to lower rates by 100 basis points,
back to all-time low levels.
The
European Central Bank’s Governing Council believes
that inflation is too low, growth is anemic and
prospects are bleak. It appears that by the end of October
2019, the deposit rate will be minus six-tenths of 1 percent and the
refinancing rate minus two-tenths of 1 percent.
Blunting the
Market Process
Market
processes are social processes, and human beings are fundamentally economic
actors. Econometric
modeling and hopeful theorizing set aside, people are temporal beings for whom
present satisfaction is preferred to future satisfaction. Interest rates are
nothing less than the memorialization of this. However, an implication of
a negative natural rate of interest would be that, given a choice
between receiving $100 today or receiving $10 one year from now, economic
actors would (ceteris
paribus) choose receiving $10 in one year.
Thought of
another way, the natural, positive interest rate is a forbearance discount; a
spread or value adjustment of sorts, comparing the current assessment of a
later desire with an earlier desire. Although this comparative rate may change
— it may steepen or flatten, even invert at times — it is always and everywhere
positive. It doesn’t disappear, and it never goes negative.
An Invisible
Subsidy
On a
grander scale, under a negative interest rate regime, many firms and projects
which would have failed under normal, positive rates of interest will continue
to operate. The commercial failure and liquidation which, to no
small extent, central banking policies seek to prevent, in fact (and however
painfully), frees up capital for new firms and projects, all of which keeps
innovation vibrant and rewards the most efficient stewards of capital.
Interest
Rates Coordinate Savings and Investment
And interest rates do more than simply influence rates of
saving and consumption. A major mistake in this policy making worldview is the
treatment of the interest rate as primarily, or exclusively, a yoke or
accelerator on "spending." In fact, interest rates coordinate investment, production and
consumption decisions over time, ranging from the heaviest consumption goods to
the simplest consumer goods.Individuals
and firms make choices based upon prices which are, in turn, influenced by
financing. Those choices en masse send signals to
producers throughout the economy regarding shifts in tastes and preferences.
Most banks take in short-term deposits and lend over the
longer term. The bank’s revenue and net income (profit) is, therefore,
dependent upon the spread between the rate it charges to borrowers and the rate
it pays to depositors. With negative interest rates,
some banks will need to find a way to recoup lost revenue.
But if they charge a negative
interest rate to depositors, they will almost assuredly experience an outflow
of deposited savings. Banking executives would then face an unenviable
decision: Call in loans to satisfy exiting depositors
or liquidate facilities and decrease staffing. But both of these choices
would be — like so many other banking choices — penny-wise and pound-foolish,
decreasing trust in the bank and perhaps accelerating the withdrawal of
savings.
The bank’s
preferred solution then might be to keep income up by widening the spread
between deposit rates and lending rates by increasing the interest rate charged
to borrowers. Thus, dropping into negative interest rates on deposits can lead
to a rise in interest rates for borrowers.
Negative interest rates are, in any case, likely to bring
about a rise in banking fees: for ATM use, for transfers, for overdrawn
accounts and so on. And rising banking fees
disproportionately affect the poor, which invites greater regulation and control
by political entities.
The Road to
Serfdom … via Credit Markets
A final
implication of negative interest rates is that the spending of the state,
essentially all of which is not productive, will become the primary contributor
to economic growth. A gradual
shortening of focus, which is already an Achilles’ heel
of democracies, will magnify. With policies oriented toward front-loaded
economic growth will come increasingly disproportionate influence of interest
groups, more possibilities for calculation error and lackluster growth.
So, by squeezing out and possibly starving credit markets, central
banks will, over time, heavily influence choices regarding production,
consumption and terms of exchange. Even the remote possibility of that
occurring should be alarming.
Where Does
Bitcoin Land?
The role
of bitcoin, and cryptocurrencies more broadly, in a negative interest rate
world (as unlikely as that truly is), is twofold.
First, one can imagine a new
era of cryptocurrency banking — a throwback to an earlier, brick-and-mortar age
— in which time preference (expressed via savings) influences interest rates,
which in turn funds current production for future consumption.
And once
millions of depositors realize that their savings will be winnowed away absent
constant consumption, they will rush for the exits.
The recent rash of proposals toward creating a cashless
economy — variously explained as bringing about new efficiencies or to thwart
criminal activity — should be viewed with far more
suspicion than they have been thus far. The new crop of utopian plans
require nothing less than a personal finance
surveillance state;
Endgame
What we
are seeing at present is only the latest stage of a widening gulf between sober
policymaking and a body of economic theory divorced from the realities of human
action. But unlike the many tweaks
and changes that have come about over the last century or so, the breaching of
the zero barrier represents a major point of inflection in monetary policy, a
thumbed nose at the conventions which built modern civilization.
It brings to mind the joke about the primary difference
between economists and biologists: Biologists at least
have the decency to test their experiments on fruit flies before human beings.
….
"Paper is poverty.
It is only the ghost of money, and not
money itself...”
….
----
----
Fed Chair
Powell promised moar (but with a caveat)
"I want to emphasize that
growth of our balance sheet for reserve management purposes should in no way be confused with
the large-scale asset purchase programs that
we deployed after the financial crisis."
"...in no sense is this QE"
"...it's not QE, did i mention that?"
"Anyone who calls QE4, QE4,
and not "not QE" is a Russian spy..."
OK, the last one was not true, but if Powell has to deny the
obvious this much, does he really expect the market to buy the bullshit he is
selling?
And so, because we do not want to argue with Fed Chair
Powell, we will
call it "NotQE."
And the market utterly rejected Powell's comments...
This came minutes after Chicago Fed's Evans' comments that "certainly, asset
valuations are quite high," and Powell
claimed that he "doesn't see any bubbles in housing or financial markets."
The sun is setting on any semblance of credibility for The
Fed as helicopter money comes closer to reality.
Unfortunately for Fed Chair Powell, President Trump stole the jam from
his donut, announcing notable actions against human rights abusers
in China - pouring cold water on any hopes of a trade
deal and crushing the gains from Powell's promised printfest.
See Chart:
Additionally, Powell said that "tariffs are a one-time
increase in prices and is different from inflation," therefore confirming
(following the slide in PPI today) that Trump is right, and US consumers aren't
hurt by trade war.
US futures show the chaos from headlines today... See chart
And cash equities are all notably weaker on the day, ending
ugly… See Chart
And gold rose despite a surge in the dollar... Can we trust it?
Read this:
Fed Funds markets shifted dovishly,
pricing in slightly more rate-cuts this year...
See Chart:
And read this
Gold dramatically outperformed on
the day... so, the USD data was
false?
See Chart:
FINALLY, "YOU ARE HERE"... This is the true of the day
….
SOURCE: https://www.zerohedge.com/markets/stocks-drop-gold-pops-powell-promises-notqe-trump-dumps-xi
----
----
Here the real truth
Anyone who
calls QE4, QE4 and not "NOT QE" is a Russian spy... See charts
The initial reaction is very lacklustre - stocks and bond
yields rose, gold initially spiked but fell back and
the dollar is unchanged for now...
See Chart:
Notably fed funds are basically
unchanged too.
See Chart:
….
SOURCE: https://www.zerohedge.com/markets/stocks-bond-yields-rise-modestly-after-powell-unveils-not-qe
----
----
One more true:
The need for the Fed to shove billions into the repo market to keep
that market’s interest rate near the Fed’s target shows the Fed is losing its power to control the price of money...
Since September 17, the Federal
Reserve Bank of New York has pumped
billions of dollars into the repurchasing (repo) market, the first such
intervention since 2009. The
Fed has announced that it will continue to inject as much as 75 billion dollars
a day into the repo market until November 4 [ZH - and today, Fed Chair Powell confirmed
the ongoing buying of T-Bills in what he demanded the American public not call
QE].
See Chart:
The American people are not even allowed to know
what banks benefited from the Fed’s intervention in the repo market, or what
plans the Fed is making for future bailouts — even though the people will pay
for those bailouts either through increased taxes, debt, or the Federal
Reserve’s hidden inflation tax when the next crash occurs. Of course, the average people who will lose
their savings and their jobs in the next crash will not be bailed out. This is
one more reason why it is so important Congress takes the first steps toward
changing monetary policy by passing Audit the Fed.
The need
for the Fed to shove billions into the repo market to keep that market’s
interest rate near the Fed’s target shows the Fed is losing its power to
control the price of money. The next crash will likely lead to the
end of the fiat money system, along with the entire welfare-warfare state.
Those of
us who understand the Fed is the cause of, not the solution to, our problems
must redouble our efforts to educate our fellow citizens on sound economics and
the ideas of liberty. This way, we
can create the critical mass necessary to force Congress to cut spending,
repeal the legal tender laws to restore a free market in money, and audit, then
end, the Fed.
….
----
----
So this is false:
"I want to emphasize that growth of our balance sheet for reserve
management purposes should in no
way be confused with the large-scale asset purchase programs that
we deployed after the financial crisis..."
====
The official story don’t fit even with IMF fund
According
to the IMF, 90% of of the world is seeing slower growth, and while the fund was
quick to blame Trump, the official real culprit is China.
====
US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
…..
Of course he Should and for many
other reasons (HHRR , WW3among them) than the one alleged for Mrs Peolosi. Even
though this one could serve the purpose of avoiding his re-election. Re-election is the direct path to Civil war in America.
His chances of governability are ZERO: neoliberal
economics require severe changes (type News Deals from FDR) that limit current
govt expenses in arms & wars. Trump won’t do that, he is tied the big
profiteers of war. He also need to go back to gold to support the USD, and that
requires saving not Keynesian economics. The USD is been dumped in global trade
& recession is at portas, so, neoliberal econ is obsolete. Trump is not the
man to introduce those radical changes, but the man to make the inequality more
explosive and the politics more violent than it is now. The uses of State military apparatus against the nation is a path to
fascism. That is the future of US if Trump is re-elected, our nation
will not accept that. Civil war will come if he is
re-elected.
----
----
Who is the current killer of Democracy in America?.. of course Trump
President Trump and his Administration reject your baseless, unconstitutional efforts to overturn the democratic
process...
…..
Of course Trump + plus the pedo-Hillary are the worse options this time.
They are two faces of the same devaluated coin. This time is different from
2016: we do have a real option for democracy in the US:
THAT IS ELIZABETH WARREN
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Kavanaugh
2.0 confirmed
====
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
Border
areas are "on the edge of humanitarian catastrophe" the
SDF warns as Turkey has vowed to
cross "shortly"..
====
...welcome to 1984...
….
We already have more than 1984 in our current America. We are in the
path to real fascism if Trump is re-elected. The Orwellian story needs to be
re-written.
====
New leaked documents expose for the first time a secret US Special Operations Command unit
code named 'Task Force Smoking Gun'.
….
In my view RU will betray Syria if Turks are not take out. RU is in the
same arms-business like Trump. The only way to force RU to abandon Turks is a
direct confrontation against Turks in their own country and that requires
missiles than Syria & allies have it. For oil business RU won’t do it. But –for
the same oil reason- Syria & allies can do it. Then RU will be forced to
act, and not only against Turks but also Agst the US who supported them too . Let’s see.
====
Suspicion that a third
party is playing a role in provoking greater violence, through using
snipers who shoot to kill.
====
SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
-Erdogan Aide Vows Turkish Offensive in Syria
'Shortly', Urges YPG Fighters to Defect Turkish nation may be
bombed if one single minority Kurd of Syria is killed
-Clinton Could Take Out Trump As Nobody Is
Seemingly As Qualified -
The pedo-ghost can’t be revived, is totally rotten. Trump-Hillary
are 2 faces of same devaluated coin. Trump’ wish the best candidate to replace
him is hilarious.. just stupid Trump’dream.
-US
Publishes Report on ‘Russian Meddling’ in 2016 Elections Evil intentions remain
-Daesh
Suicide Bombers Attack Kurdish Military Positions in Raqqa, 'Clashes Still
Ongoing' - SDF Daesh was
trained & financed by US since Hillary
was S-S: case Lybia
- Ecuadorian
Presidt Moreno Declares Curfew in Govl Districts People will take him
out
-‘Everybody’s
Rights Are on The Chopping Block’: US Supreme Court to Rule on Abortion, LGBTQ
Rights Fascism won’t
prevail in America never ever. Real democ will prevail.
----
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
REBELION
====
ALAI ORG
====
RT EN
ESPAÑOL
- FOTOS, VIDEOS: Manifestantes ingresan al Parlamento de Ecuador
- Correa sobre las acusaciones de Lenín Moreno: "Los golpistas han sido ellos, que han roto la Constitución cuantas veces les ha dado la gana"
- Venezuela detecta un avión de inteligencia estadounidense en su región de información de vuelo
- 10 preguntas para entender la rebelión indígena y popular en Ecuador
- Corte Suprema de Colombia vincula formalmente a Álvaro Uribe al proceso por soborno de testigos
- Bloquean el testimonio del embajador para la UE en una pesquisa contra Trump
- FMI: el crecimiento global disminuye en el 90% del mundo
- Keiser Report "La burbuja de activos más grotesca de la historia será la causante de la próxima crisis crediticia"
----
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
----
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Norman Solomon Bernie’s
Heart. And Ours.
Laura Finley The
Death Penalty is Barbaric and Ineffective
Mel Gurtov Overreach,
the Achilles Heel of Autocrats
----
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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..
- UN in the red, staff salaries at risk
- 'US policies behind Mideast atrocities'
- Ecuador imposes curfew as protests intensify
- Johnson facing no-deal Brexit cabinet rebellion: Report
- Dark matter, exoplanet studies win Nobel Physics Prize
- Saudi women’s activist contender for Nobel Peace Prize
- ‘Combating terrorism no pretext for political gains’
- 'Moreno allowing US meddling in return for aid'
- White House not to cooperate with impeachment inquiry
- ----
- PROGRAMS
- Israel's intolerance problem
- Turkey Syria looming invasion
- Deadly protests escalate in Iraq
- Turkey's dangerous Syrian incursion
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