MAY 15 20 ND 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
Financialization was never
sustainable,and neither was the destructive globalization it enabled...
Globalization and financialization have been losing momentum for years. Under the guise of "opening markets,"
globalization has stripmined every economy that can't print a reserve currency
and hollowed out economies globally as only globally competitive
sectors survive globalization. The net result
is that once vibrant, diversified economies have been reduced to fragile
monocultures completely dependent on global flows of capital and spending for
their survival.
SEE CHART:
Excesses of debt and leverage funneled into risky speculations inevitably
end in default. Financialization manifests as asset bubbles and
hyper-consumption as people who never had credit spend up to the credit limits
and beyond. Both asset and consumption bubbles pop,
pushing the financial sector that feasted off the unsustainable expansion of
credit into insolvency.
SEE CHART:
https://www.zerohedge.com/s3/files/inline-images/financial-assets1-20a%20%283%29_0.jpg?itok=1eku4IGx
That globalization and financialization are dead is revealed by what
Federal Reserve bailouts and fiscal free-for-alls cannot do:
1. They cannot create
creditworthy borrowers out of thin air like the Fed creates dollars out of thin
air.
2. They
cannot force lenders facing mass defaults to loan more money to uncreditworthy
borrowers
3. They cannot force
creditworthy borrowers to borrow money.
4. They
cannot reflate asset and consumption bubbles that have popped.
5. They cannot restore
confidence in long, fragile supply chains.
6. They
cannot magically turn unprofitable enterprises into profitable enterprises.
7. They cannot create income
streams--revenues, profits, wages, etc.--with bailouts that continue the
perverse incentives of moral hazard or "free money" designed to give
debt-serfs enough cash to continue making their loan payments.
8. They
cannot forgive debt payments without destroying the wealth held as debt:
mortgages, student loans, auto loans, credit card debt, corporate junk bonds,
etc. are assets that lose their value once borrowers default.
9. The Fed can buy impaired
debt, but that doesn't change their abject powerlessness (points 1 through 7
above).
Financialization was never sustainable, and neither was the destructive
globalization it enabled. Any system that
depended on the ever-expanding exploitation of new resources, debtors and markets
could never be anything but fragile. The ferociousness of its rapacity masked
its inherent weakness, a weakness that is now exposed as fatal.
….
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The new WEIMAR show will go to US history as failure too.
The Fed has
monetized $2.8 trillion in debt so far. It's nowhere near enough.
Last week, the Treasury shocked the
world when it announced that in the current quarter (the 3rd of the fiscal
year), the US will need to sell a mind blowing, record
$3 trillion (pardon, $2.999 trillion) in Treasurys to finance the US money
helicopter.
SEE TABLE
This, after
selling $807 billion in the first half of the fiscal year, and another $677
billion in the quarter ending Sept 30.
And since it is just a matter of
time before Congress has to pass yet another fiscal package which
will be at least another trillion dollars, and up to $3 trillion if the
Democrats get their wish, one can say that Guggenheim's
projection of over $5 trillion in debt issuance this calendar year will be
wildly conservative
SEE CHART:
Treasury Issuance will shatter
records in 2020
Now here's
the thing: as Deutsche Bank recently
showed, so far this new debt avalanche was entire
monetized exclusively by the Fed, whose debt purchasing operations have been
far greater than the net Treasury issuance.
SEE CHART
But this was only the case when the
Fed was buying a massive $75 billion in TSYs per day in the late March crash,
when Powell dumped a monetary nuclear bomb on the market to stabilize the
biggest panic selling an entire generation of traders had ever seen, and nearly doubling the Fed's balance - which is now just shy of
$7 trillion, in a few months:
SEE CHART:
Since then,
however, the Fed's daily and weekly POMO has shrunk substantially, and as discussed
earlier, it is down to just $30BN in Treasury
purchases per week as of next week, which amounts to around $1.5 trillion per
year.
SEE CHART:
There's just one problem: $30BN per week in TSY monetization
is nowhere near enough to consume the trillions in Treasury issuance that is
about to hit. In fact, all else equal, the Fed will very soon have to find
a pretext to aggressively ramp up its treasury
purchases.
As Goldman writes overnight,
putting the problem in its proper context, "Central banks have been
purchasing sovereign bonds at a rapid pace (Exhibit 1), faster than past QE
programs in most cases. These
purchases are occurring against a backdrop of a surge in fiscal deficits, which
will require enormous amounts of additional sovereign supply to finance them."
SEE CHART:
Which makes
sense, of course: after all helicopter money, which is what we have now
that MMT (Magic Money Theory) has been shoved down everyone's throat without
any debate, only works when there is coordination between the Treasury and the
central bank. And while until now Fed purchases have
generally offset Treasury issuance, that coordination is about to end. As Goldman puts it,
"Central bank buying should absorb a substantial amount of upcoming
issuance, though we expect increases in “free float” across most markets, most
notably in the US, which adds to the medium-term case
for higher yields and steeper curves there."
Next, Goldman estimates this
so-called FREE FLOAT, defined as the amount
of sovereign debt outstanding less central bank and foreign official holdings, across major DM markets, and shows it in the chart below. Through
the end of last year, free float was on a downward
trend in Germany and Japan, as ECB and BoJ purchases absorbed the
bulk of new supply. In contrast, free float had been
trending higher for much of the year in the US and UK.
SEE CHART:
So with
record fiscal deficits and resumption of asset purchases in several markets,
where is free float headed this year? In Exhibit 3, Goldman lays
out its expectations for total purchase amounts on a net basis along with net
supply. It finds the largest increase in free float in the US, as Fed purchases
continue to slow; in fact according to GOLDMAN CALCULATIONS the US
public (now that foreign investors have hit the breaks on US TSY purchases), will be on the hook to fund the $1.6 trillion needed to
bridge the full amount of US funding needs.
SEE EXHIBIT 3
IN SHORT,
even with central banks unleashing $7.9 trillion in QE so far in 2020
(according to Bank of America calculations) of which the Fed accounts for over
$2.8 trillion in debt purchases alone, this won't be enough to monetize
the tsunami of debt that is coming to fund the biggest global rescue operation
in history, and if investors find that suddenly the bond market has to clear without the only true backstop -
the central bank - willing and able to mop up all the supply, a critical precondition for the continuation of
"helicopter money", THE OUTCOME COULD BE DISASTROUS.
Incidentally, we first warned about
the urgent need for the Fed to aggressively step up and boost its QE (instead
of continuing to taper it by $1 billion week after week as it did again
today) on
Wednesday when we quoted Curvature Securities' rates strategist and
repo expert Scott Skyrm, who calculated that "there
are $689 billion net new Treasurys settling during the month of May and $992
billion net new Treasurys settling between now and June 15. YES, almost one trillion new Treasury securities hitting the
market within the next month!"
SEE CHART:
His
conclusion: "That means the market needs to come up with about one
trillion dollars to pay for those securities over the next month." Which, of course, is a euphemism because we all know who in
the market needs to come up with one trillion dollar - the only one who
literally prints money: the Federal Reserve.
Conveniently, Goldman's argument
allows us to recycle our conclusion from two days ago, in which we said that
here is the layman's version of what was just said: "the Fed has flooded the system with
liquidity... and it is not enough, because the way helicopter money works, is
that liquidity supply (the Fed), and liquidity demand (Treasury via debt
issuance) go hand in hand, and periods of
too much supply, as was the cash with the Fed's massive QE in late March and
early April, are promptly followed by periods of dramatic liquidity demand,
such as the next month when $1 trillion in liquidity will be drained to fund
the US government "money helicopter."
Goldman's own calculations suggest
that the shortfall net of the Fed's ongoing QE tapering
could be as much as $1.6 trillion.
As a result, Powell faces a
two-fold problem: since the Fed chair has taken negative rates off the
table, Powell has no
choice but too boost QE again, and unleash another firehose of debt monetizing
liquidity in the financial system.
….
….
Irony
[[ Este partido esta mejor que los de la Bundes-liga. Aquí se juegan su
vida los grandes mafiosos del WS conocidos como “honestos inversores” vs. el equipo del FED que imprime los falsos USD.
Estos saben que la Deuda y el interest
rate van a hundir la economía americana.
Al parecer, los del FED siguen el principios de Friedrish
Hayeck: “To
combat the depression by a forced credit expansion is to attemp to cure the evil decease by the
very means which brought it about .. if that happens is because we are
suffering from a misdirection of production”.
Y el árbitro de este partido,
the only one who knows donde estamos y adónde vamos , este arbitro
que al parecer simpatiza con Hayeck , es nuestro Ministro de Economia Mr Powell,
él es quien
va a decidir la final del partido. Y, si decide mal , si no es imparcial y justo con
ambos equipos , si no los convence de que Hayeck tiene razón, estos equipos lo cuelgan
de los runtus a ambos,
al ministro de Economia del US y
a su padrino, Mr POTUS. SI YO FUERA EL ÁRBITRO, suspendería el partido: alegaría que el equipo de los
empresarios estan dopados con un doble virus : QEs & Bailouts, que es peor que COVID-19 pues
no solo mata a los pacientes infectados sino a los médicos que los examinan y al
público que los observa y aplaude en el estadio. Hay que evitar que el Pdo
final termine en violencia letal. Hay suspenderlo… Tambien las elecciones? pregunto alguien. Por supuesto, le dije. El tipo de
crisis que tenemos (economía, política y COVID 19) obliga a hacer cambios radicales en el sistema. Si
no lo hacemos, fenecemos ]]
….
….
Como salvar a la mafia especuladora mundial?
GOOD NEWS:
Major
Central Banks are buying Bonds to support their economies
SEE CHART
….
SOURCE for: GOLDMAN
SPOTS A HUGE PROBLEM FOR THE FED
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US DOMESTIC POLITICS
Seudo democ
duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
BYE BYE TO THE CLOWN BIDEN
'85,000 jobs have been lost in the US andmillions of Americans have died' since pandemic began...
apparently.
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Tyrants can’t have power without people willing to enforce the
tyranny. If there are no order
followers, there are no orders...
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It's easy to find timelines that detailTrump-Russia collusion developments... But it's not so easy
to find a timeline pertinent to
the investigations into these events...
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There will
be social-economic consequences for the collapse of the labor
force.
The Federal Reserve
on Thursday published a new survey of how virus-related
lockdowns disproportionately affected Americans, suggesting the
working-poor has been crushed under the weight of high unemployment and
economic distress.
Fed Chairman Jerome Powell outlined
in a webcast to
Congress this week that severe economic impacts related to virus shutdowns were
mostly seen for lower-income Americans:
"The numbers show clearly that it's more recent hires and
lower-paid people who are bearing the brunt of this, although people are
suffering all across the income spectrum," Powell said.
About 64% of those with a job loss
or decline in weekly hours worked were able to pay bills in full, compared
with 85% of those who continued to work.
At least
half of the respondents said they would have trouble covering a $400
expense.
SEE CHART:
SOURCE: https://www.zerohedge.com/markets/economic-virus-shock-crushes-americas-working-poor-fed-finds
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But will
they opt to return?
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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
King
Abdullah threatened the US-backed Netanyahu plan will “will lead to a massive conflict with Jordan”...
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The city
will need to test nearly a million people a day, nearly 10x the most that has
ever been done in a day in the epicenter of the global outbreak...
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Saudi Arabia dumped a record $25.3 billion in US
Treasuries...
SEE CHART:
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"This
action puts America first, American companies first, and American national
security first..."
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
-White
House Ready to Restore Partial Funding of WHO - Report T blackmail failed
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
REBELION
Palestina: Los voceros del sionismo no tienen
pudor
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ALAI ORG
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RT
EN ESPAÑOL
OMS advierte del posible vínculo del covid-19 con
una rara enfermedad infantil https://actualidad.rt.com/actualidad/353286-oms-vinculo-covid-rara-enfermedad-infantil
Por qué los migrantes venezolanos retornan a su país
en medio de la pandemia? https://actualidad.rt.com/actualidad/352349-retorno-migrantes-venezolanos-coronavirus-venezuela
China afectaria a Apple y otras del US en 'lista negra' en venganza por Huawei https://actualidad.rt.com/actualidad/353321-china-apple-companias-eeuu-sanciones-huawei
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CROSS TALK https://www.rt.com/shows/crosstalk/
Huawei is
back in the limelight as the US ramps up its battle against the Chinese telecom
giant with new measures to block shipments of semiconductors from chip makers
to Huawei Technologies. Tensions between China and Australia are also on the
rise.
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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
-Democracy
At Stake: “Faithless Electors” SCOTUS Case Tests If Electoral College Members
Can Go Rogue
-“Can
Democracy Survive the Pandemic?”: Election Hangs in the Balance as Trump
Attacks Mail-In Voting
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