Skip to main content

Posts

How The Economic Machine Works by Ray Dalio - Bridgewater

Recent posts

Visualizing The Pension Time Bomb: $400 Trillion By 2050 - Zerohedge

ECB Tells Deutsche Bank To Simulate A "Crisis Scenario" - Zerohedge

Perhaps, but never until now was Europe's biggest bank asked to quantify how the abrupt end of its banking business, with its associated €48.3 trillion in gross notional derivatives, would affect both the bank itself, and would percolate across markets. Source: ECB Tells Deutsche Bank To Simulate A "Crisis Scenario" - Zerohedge

America's Future No Longer "Looks Sustainable In A Market Context": Deutsche - Zerohedge

US-China rivalry will shape the 21st century - Financial Times

The threat is the decadence of the west, very much including the US — the prevalence of rent extraction as a way of economic life, the indifference to the fate of much of its citizenry, the corrupting role of money in politics, the indifference to the truth, and the sacrifice of long-term investment to private and public consumption. It is indeed a tragedy that the best way we could find to escape from a financial crisis was via monetary policies that risked promoting new bubbles. We could be better than this. Source: US-China rivalry will shape the 21st century - Financial Times

US-China rivalry will shape the 21st century - Financial Times

Assume that by 2040, China achieves a relative GDP per head of 34 per cent at market prices and 50 per cent at PPP. This would imply a dramatic slowdown of the rate it is catching up (a fall of around 70 per cent from the rate since 2000, starting in 2023). China’s economy would then be almost twice as big as that of the US at PPP and almost 30 per cent larger at market prices. (See charts.) Source: US-China rivalry will shape the 21st century - Financial Times

Venezuela's annual inflation rate continues to skyrocket. Calculated rate for today (4/13/18) is 13,357% - Prof. Steve Hanke Twitter

US Reports Biggest Trade Deficit Since The Financial Crisis - Zerohedge

Meanwhile, the countries that should be worried they are about to fall in Trump's trade war sights and resulted in a US trade deficit, included China ($34.7), European Union ($15.3), Germany ($6.7), Mexico ($6.6), Japan ($6.0), Italy ($2.8), OPEC ($2.3), India ($1.9), Taiwan ($1.5), France ($1.4), South Korea ($1.1), Saudi Arabia ($0.4), and Canada ($0.4). More importantly, it's not just China:the deficit with Mexico increased $1.0 billion to $6.6 billion in February, while the deficit with Germany increased $0.4 billion to $6.7 billion in February. Meanwhile, the deficit with Canada decreased $1.2 billion to $0.4 billion in February. Finally, if you want to get Trump really mad, tell him that when stripping away petroleum products - which recently saw record US exports thanks to shale -the US trade deficit has never been greater.
Source: US Reports Biggest Trade Deficit Since The Financial Crisis - Zerohedge

US Reports Biggest Trade Deficit Since The Financial Crisis - Zerohedge

Trump will hardly be happy to learn that not only did the US trade deficit grow by 1.6% in February from $56.7BN to $57.6BN, missing expectations of a $56.8BN print, but was the highest monthly trade deficit going back ten years, just as the financial crisis was warming up back in 2008.


 Source: US Reports Biggest Trade Deficit Since The Financial Crisis - Zerohedge

Venezuela’s Inflation Rate at 7849% Based On More Reliable AirTM’s Black-Market Exchange-Rate Data - Zerohedge

Salario mínimo venezolano es de $1,50 dolares al mes - Dolar Today

Monetary Reform Would Rebalance Trade - The dollar’s status as global reserve currency is as responsible as bad agreements for the deficit - WSJ

"In 1973 the world held $500 billion in foreign-exchange reserves (in 2017 dollars); last year it was $11 trillion, a 22-fold increase. About two-thirds of total reserves are now denominated in dollars. Because of high global demand, the dollar’s international position is always stronger and U.S. interest rates are lower than they would be otherwise. This, in turn, means that America’s budget and trade deficits swell in tandem, while U.S. exports are costlier and imports are cheaper, regardless of trade practices."
Source: Monetary Reform Would Rebalance Trade - The dollar’s status as global reserve currency is as responsible as bad agreements for the deficit - WSJ

Venezuela's Annual Inflation Rate - Venezuela's Inflation Surges to A New High: 8321% - Zerohedge

The Fall in the Value of the Venezuelan Bolivar - Venezuela's Inflation Surges to A New High: 8321% - Zerohedge

David Rosenberg: "It Was Black Friday Before Black Monday" - Zerohedge

Council On Foreign Relations President: "Goodbye, LIberal World Order" - Zerohedge

Whatever one thinks of Trump, love him, loathe him, mock him or respect him, he's managed to do one thing - in the one year that he's been president, his ad hoc, haphazard, chaotic, irrational and unpredictable style of governance may have thrown the country, its institutions, its "establishment", and certainly the press for loop, but it has also achieved one other thing:it has made the "globalists" conclude that the "liberal world order"which they created- which has resulted in the greatest accumulation of wealth by the fewest number of people; in the greatest political, social, ethnic, economic and financial polarization in recent history; in a global debt load that has put the world on the verge of financial catastrophe (only offset by constant central bank "confidence" injections); and which the "Trump vote" was a protest against -is almost over.
Source: Council On Foreign Relations President: "Goodbye, LIberal World O…

Market "Earthquake Is Coming" - Icahn Warns "A Lot Of People Will Pay The Price Like In 1929" - Zerohedge

"There isgoing to be a major, major, major correction." "This is amanifestation of a real deep problem we have in our markets." "There is a huge bubble of passive money flowing in...a sort of euphoria and a lot of people are going to pay the price just like in 1929." Source: Market "Earthquake Is Coming" - Icahn Warns "A Lot Of People Will Pay The Price Like In 1929"

Federal Reserve Total Assets - Zerohedge

Federal Reserve, Mortgage-Backed Securities - Zerohedge

Federal Reserve, Treasury Securities - Zerohedge

Holdings of domestic sovereign debt by domestic banks - Zerohedge

Changes in holdings of Italian government securities by investor type - Zerohedge

15-64 YoY Population Growth vs. Wilshire 5000 - Zerohedge

What should already be clear will be obvious for everyone...the federal "debt" being created isn't actually "debt" at all.  It is being created and spent with no intention of ever repaying itand the move back to zero % interest rates (or more likely NIRP) on that "debt" will make clear that it is simply centrally created and centrally directed monetization. 
Source: The Current US Economic Divide Is "The Founding Fathers' Worst Nightmare Come True"

15-64yr/old Annual Pop. Growth vs Housing Starts - Zerohedge

Gross Fed Debt, Annual $ Change in Fed Debt, Annual % Change in Fed Debt - Zerohedge

Housing Starts (% yoy change), FFR%, Deficit (% yoy change), Debt to GDP % - Zerohedge

Simply, when deficit spending accelerates and interest rates are declining, America builds new housing and the broader economy hums.  However, debt grows far faster than the resultant economic activity, and debt to GDP soars (yellow line). Conversely, when deficit spending is decelerating and rates are rising (as they are now), new housing creation decelerates/declines and economic recession is imminent.
Source: The Current US Economic Divide Is "The Founding Fathers' Worst Nightmare Come True"

Visualizing Real Inflation - A Decade Of Grocery Prices For 30 Common Items - Zerohedge

U.S. Treasury Secretary Mnuchin on Exchange Rates: Clueless - Forbes

As the chart below shows, the evidence fails to support the idea that currency depreciations boost growth. Indeed, he found just the opposite: currency appreciations are associated with stronger growth.
Source: U.S. Treasury Secretary Mnuchin on Exchange Rates: Clueless - Forbes

'Perfect storm': Global financial system showing danger signs, says senior OECD economist - Brisbane Times

This time central banks are holding a particularly ferocious tiger by the tail. Global debt ratios have surged by a further 51 percentage points of GDP since the Lehman crisis, reaching a record 327 per cent (IIF data). This is a new phenomenon in economic history and can be tracked to QE liquidity leakage from the West, which flooded East Asia, Latin America, and other emerging markets, with a huge push from China pursuing its own venture.
It has the makings of a perfect storm. At best, the implication is that yields on 10-year Treasuries - the world's benchmark price of money - will spike enough to send tremors through credit markets. The edifice of inflated equity and asset markets is built on the premise that interest rates will remain pinned to the floor. The latest stability report by the US Treasury's Office of Financial Research warned that a 100 basis point rate rise would slash $US1.2 trillion of value from the Barclays US Aggregate Bond Index, with further losses o…

Ken Rogoff Warns "China Will Be At The Center Of The Next Global Financial Crisis" - Zerohedge

Also, in many parts of Europe interest rates are still negative. Will that leave permanent damages to the economy?
I think that’s nonsense. There isn’t any particular evidence that negative interest rates are leading to permanent damages or that the risk of a crisis are higher. But eventually, we’re going to have another deep recession or financial crisis. Not tomorrow, not soon I hope, but it’s going to happen.And if countries don’t prepare for it it’s going to be much worse than the last time because interest rates are already near zero, quantitative easing is ineffective and helicopter money is a silly idea.That’s why I think thatin the future we will see the major central banks and Treasuries of the world all prepare for having much deeper negative interest rates the next time we have a financial crisis. It’s a much, much more elegant solution than anything that’s been proposed. So I think many countries will prepare for negative interest rates and I would say within the next decad…

Per Capita Disposable Personal Income vs. Wilshire 5000 - Gauging Contemporary Bubbles - Zerohedge

Disposable Personal Income over Wilshire 5000 - Gauging Contemporary Bubbles - Zerohedge

Wilshire 5000 vs. Disposable Personal Income - Gauging Contemporary Bubbles - Zerohedge

S&P & Interest Rates vs. Composite - The Pin That Pricks The Bubble - Zerohedge

Total System Leverage - The Pin That Pricks The Bubble - Zerohedge

Peter Schiff: "We're Near The Endgame... And Trump's Gonna Be The Fall Guy" - Zerohedge