JUL
25 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
Instead of 'managing' the cycle of bank credit, more
recently central banks have now
resorted to outright monetary inflation, as nations attempt to defray
the economic consequences of the COVID-19 panic...
Explaining The Credit Cycle
This article summarises why
the credit cycle leads to alternate booms and slumps. It is only with this in mind that they can
be properly understood as current economic conditions evolve.
The reader is taken through three monetary models: a fixed money economy, one governed
by changes in bank credit, and finally the consequences of central bank
intervention.
The theory, embodied in the division of labour, eludedKeynes, who was determined to justify an
interventionist role in the economy for the state.
This is the Holy Grail for interest rate
policy. Assuming interest
is the price of money, there should therefore be a correlation between changes
in interest rates and changes in the general price level. In other words,
managing interest rates should allow a central bank to manage the general level
of prices, and therefore, so it is said, influence the level of consumer
demand.
But empirical evidence denies this. The
little-known Gibson’s paradox proves that there has been no such correlation,
and instead, it is the price level and nominal interest rates that correlate,
as shown in Figure 1 below, which is of Britain’s experience, covering a period
of 225 years of relatively free markets.
SEE CHART:
Gibson ‘ Paradox
The bond yield is of Consols
undated stock, which with little variation acts as an effective proxy for
wholesale borrowing costs, since it lacks the pull of a gross redemption yield.
Contrast
the correlation in Figure 1 with the lack of correlation in Figure 2, which
shows no correlation between wholesale borrowing costs and the rate of price
inflation.
SEE Chart:
Keynes, no less, named the
phenomenon as a paradox in 1930, confirming the observations of Thomas Tooke in
1844 and then the eponymous Alfred Gibson, who wrote about it in an article
for Banker’s Magazine in 1923. But because no one, including
luminaries such as Keynes himself, Irving Fisher, Milton Friedman, and even
Knut Wicksell, the Swedish economist who is remembered for his pioneering work
on interest rates, managed to crack the paradox.
The
solution of Gibson’s paradox turns out to be very simple, and
I wrote a paper on it for Goldmoney in 2015.
A businessman, allocating
capital for the manufacture of a product, in his calculations had an important
point of reference that could not be ignored: the price for which he might
expect to sell his product. If the price was trending higher, he could afford
to pay a higher rate of interest, the converse also being true.
CONTINUE
READING AT:
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Increasingly reality is
challenging the narratives of hope, optimism and even momentum...
This as earnings reports of big tech heavy weights such as $MSFT and
$TSLA failed to inspire new buying but rather saw
selling which spilled into the entire tech sector culminating in its breaking
the up trend off of the March lows:
SEE CHART:
A rally driven by optimism, hope and liquidity suddenly finds itself
reversing even with more hope, optimism and liquidity right at the point of
another foray toward record valuations inside a recession:
Yesterday markets closed at 155.3% market cap vs GDP with negative earnings
growth no less
The largest financial bubble ever.pic.twitter.com/6ETTPMzVAk
The largest financial bubble ever.pic.twitter.com/6ETTPMzVAk
— Sven Henrich
(@NorthmanTrader) July
23, 2020
Perhaps valuations mean something after all.
….
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COMEX de NY is now the
largest Future contract for metals (gold ++) bye bye UK banks
Three
elements cause physical delivery on the COMEX to have reached record highs this
year: strong demand for futures in New York, a persisting spread between the
price of futures in New York versus spot gold in London.
Submitted by Jan Nieuwenhuijs of Voima Gold
An important change in the global
gold market occurred on March 23, 2020. On that day the
price of gold futures in New York started drifting higher than the price for
spot gold in London. Ever since, the spread has persisted, though it
continuously widens and narrows. The reason for this disturbance in the market
can be read in my previous article “What
Caused the New York vs. London Gold Price Spread and Why it Persists.”
Physical delivery on the largest
gold futures exchange in the world, the COMEX in New York, has reached all time
highs this year.
In June more than 170 tonnes were
physically delivered (5.5 million ounces). Usually, delivery is “neglectable.”
What has changed?
SEE CHART:
COMEX
GOLD: DELIEVERIES
What
arbitragers currently do to profit from the spread is buy spot, sell futures,
fly the metal to New York, and physically deliver the gold.
This is how
the profit is locked in. If the spread between spot and futures is $40 per
ounce, the arbitrager’s profit is $40 minus costs for transport, insurance,
storage, etc.
Now you can
see why the persistent spread between New York and London has increased
physical delivery on the COMEX through arbitrage.
CONCLUSION
Physical delivery on the COMEX is
elevated because of the current unusual situation in the global gold market. The gold delivered in New York has been imported from spot
markets such as Singapore, Switzerland and Australia.
U.S. imports directly from the U.K. are rare, because in London 400-ounce bars
are traded and the main futures contract in New York requires smaller bars for
delivery
SOURCE: https://www.zerohedge.com/markets/record-170-tons-physical-gold-were-just-delivered-comex-heres-why
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
Seattle nor the Nation need police
with impunity to kill
disarmed people in streets.
"We
cannot enforce the law. You are on your own."
…
Killing disarmed people protesting
in streets has nothing to do with ‘enforcing law’, that is murder and all murders has to be punished by real LAW.
All democratic nation has the right to protest against
their Govt. Defending the Law has nothing
to do with defending tirany or dictatorship. Trump has the right to create his own private team to
protect his security, but he has not
right to use the public police. IF HE USED, IS
RESPONSIBLE FOR THE MURDER.
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PRIVATIZING the School system: other EFFECT
of the stupid lockdown
Millions of parents, after homeschooling their children for months are seriously considering homeschooling because
of the dystopian guidelines issued by The CDC and being followed by
most school districts...
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It's time to be our own
heroes, because those in charge
sure won't be
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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
Indians’ ignorance about the geography of their own country, their irrationality, superstitions and bigotry have
been fertile ground in these days of COVID-19...
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Fighter aircraft, armored vehicles, air defense systems
& supplies...
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Massive
security presence in Chengdu,
China as a US consulate
emblem taken down and staff seen moving out Saturday...
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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
RT EN ESPAÑOL
Policía de Seattle declara una revuelta contra manifestantes https://actualidad.rt.com/actualidad/361134-eeuu-seattle-revuelta-disturbios
"Urgencia máxima" en Corea del Norte tras primer
caso sospechoso de covid-19 https://actualidad.rt.com/actualidad/361124-corea-norte-primer-caso-sospechoso-coronavirus
BOL. "¡Daremos un golpe a quien nos dé la
gana!": Musk . Y Morales le responde . https://actualidad.rt.com/actualidad/361112-musk-golpe-bolivia-litio-morales
FMI: un "evento explosivo" podría hacer
colapsar el mercado del dólar https://actualidad.rt.com/actualidad/361095-evento-explosivo-colapsar-dolar-fmi
Alto funcionario alemán: "La segunda ola de
coronavirus ya está aquí" https://actualidad.rt.com/actualidad/361120-oficial-aleman-segunda-ola-coronavirus
VEN apela fallo británico que le denegó acceso a su oro depositado en
Londres https://actualidad.rt.com/actualidad/361103-caracas-obtiene-derecho-apelar-acceso-oro
ONU: arrestos arbitrarios y uso
"discriminatorio" de fuerza contra manif y periodistas en US. https://actualidad.rt.com/actualidad/361077-onu-denuncia-uso-fuerza-protestas-eeuu
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CROSS TALK https://www.rt.com/shows/crosstalk/
Max and
Stacy discuss the ongoing stampede into bankrupt or near-bankrupt companies, as
retail investors believe a 90% fall in the stock price represents some sort of
discount. In the meantime, a similar stampede into negative interest rate
bearing bonds has been happening amongst sophisticated investors for even
longer.
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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