Economische aanraders 27-09-2015
Veren of Lood biedt u op zondag wekelijks een inkijkje in ~10~ belangrijke of informatieve artikelen en interviews die de voorafgaande 7 dagen op economisch terrein verschenen.
De kop is de link naar het oorspronkelijke artikel, waarvan de eerste (twee) alinea’s hier gegeven zijn.
Yellen Is Trapped in the Worst Nightmare Ever – Martin Armstrong
Yellen has inherited a complete nightmare. Thursday’s decision to delay the long-awaited liftoff from a zero interest rate illustrates that the world economy is totally screwed. There is a lot of speculation about why the Fed seems so reluctant to “normalize monetary policy”. There are, of course, the typical domestic issues of low inflation and weak wage gains in the face of strong job growth. A hike will increase the Federal deficit. Then there is the argument that corporations now have $12.5 trillion in debt. All that is nice, but with corporate debt, our clients are locking in long-term at these levels, not funding anything short-term. Those clients who have listened are preparing for what is to come, unlike government, who has been forced to shorten the average duration of their debts blindly to what happens when rates rise, which will be set in motion by the markets — not Yellen.
Chinese turmoil knocks wind out of UK finance firms’ sails – Tim Wallace
Volatile financial markets and China’s economic slowdown are taking a toll on the City of London and Britain’s wider financial services industry, slowing down the sector’s previously rapid growth.
Business volumes in UK financial services increased at the slowest pace for two years in the three months to September, according to an influential study from PwC and the Confederation of British Industry.
The bloated, arrogant aid industry won’t let Africa go without a fight – David Perry
African economies are now standing tall by themselves – but too much money is invested in the patronising lie that they’re helpless without the West.
Africa is standing up. After centuries of poverty, the world’s largest continent is developing fast. Economic growth in Africa will be around 5 per cent this year and has doubled the global average for more than a decade. The proportion of Africans defined as absolutely poor – living on $1.25 a day or less – has fallen by one third to four in ten since the 1990s; there are now 160,000 millionaires in Africa, and the average African earns $1,720 a year ($200 more than the average Indian). Thirty years after Live Aid, Ethiopia’s first yuppies are traders on Africa’s first commodities exchange.
China’s “Credit Mystery” Deepens, As Moody’s Warns On Shadow Financing – Tyler Durden
Last month, we took a detailed look at what we said could be a multi-trillion yuan black swan.
In short, one of China’s many spinning plates is the country’s vast shadow banking complex which allowed local governments to skirt borrowing restrictions leading directly to the accumulation of debt that totals some 35% of GDP and which has channeled trillions into speculative investments via the proliferation of maturity mismatched wealth management products.
One of the problems with the system is that it allows Chinese banks to obscure credit risk.
Why a ‘Competitive’ Economy Means Less Competition – Nicholas Shaxson
The ‘competitiveness’ of a country can be taken to mean many things. Many people, such as Martin Wolf or Paul Krugman, have argued forcefully that it is a meaningless or dangerous concept. On another level it’s a question of language: you can make national ‘competitiveness’ mean whatever you like.
Greece: No Lessons Learned – Ashoka Mody
In November 2003, former German Finance Minister Hans Eichel explained why the “deal” between Greece and its creditors is virtually certain to fail. Fending off the pressure then on Germany for more fiscal austerity in an economic recession, Eichel wrote in a Financial Times op-ed: “A policy geared solely to attaining quantitative consolidation targets in the short term runs the risk not only of curbing growth but also of increasing debt.”
Eichel’s theorem says that the latest Greek government, even if stable, will not overcome the illogic of the creditors’ program. Growth will be slower and deflation stronger than anticipated. The debt burden will continue to increase.In November 2003, former German Finance Minister Hans Eichel explained why the “deal” between Greece and its creditors is virtually certain to fail. Fending off the pressure then on Germany for more fiscal austerity in an economic recession, Eichel wrote in a Financial Times op-ed: “A policy geared solely to attaining quantitative consolidation targets in the short term runs the risk not only of curbing growth but also of increasing debt.”
Central Banks Don’t Dictate Interest Rates – Frank Shostak
According to mainstream thinking, the central bank is the key factor in determining interest rates. By setting short-term interest rates the central bank, it is argued, through expectations about the future course of its interest rate policy influences the entire interest rate structure. (According to expectations theory (ET), the long-term rate is an average of the current and expected short-term interest rates.) Note that interest rates in this way of thinking are set by the central bank, while individuals in all of this have almost nothing to do and just mechanically form expectations about the future policy of the central bank. (Individuals here are passively responding to the possible policy of the central bank.)
Uruguay Does Unthinkable, Rejects Global Corporatocracy – Don Quijones
Often referred to as the Switzerland of South America, Uruguay is long accustomed to doing things its own way. It was the first nation in Latin America to establish a welfare state. It also has an unusually large middle class for the region and unlike its giant neighbors to the north and west, Brazil and Argentina, is largely free of serious income inequality.
Two years ago, during José Mujica’s presidency, Uruguay became the first nation to legalize marijuana in Latin America, a continent that is being ripped apart by drug trafficking and its associated violence and corruption of state institutions.
Now Uruguay has done something that no other semi-aligned nation on this planet has dared to do: it has rejected the advances of the global corporatocracy.
Why Has Labor’s Share of GDP Declined for 40 Years? – Charles Hugh Smith
This long-term erosion of earned income and household finances does not enable “growth” that is based on rising spending and borrowing.
Why Has Labor’s Share of Gross Domestic Product (GDP) been declining for 40 Years? The question cuts right to the heart of the core socio-economic issues of our era: the decline of secure work and the explosive rise of wealth and income inequality.
Gold “Tightness”: When There’s No More To Sell, There’s No More To Buy (At Any Price) – Chris Martenson
One of our long-running themes here is that the truly historic and massive flows of gold from West to East is (someday) going to stop, for the simple reason that there will be no more physical bullion left to move.
It’s just a basic supply vs. demand issue. At current rates of flow, sooner or later the West will entirely run out of physical gold to sell to China and India. Although long before that hard limit, we suspect that the remaining holders of gold in the West will cease their willingness to part with their gold
Global Markets: It’s Getting Ugly Out There – Charles Hugh Smith
We also discussed the most critical systemic sources of risk in global markets.
You’d have to be in full denial mode not to see that it’s getting ugly out there in global markets: currencies are melting down, trade and shipping are tanking, commodities are swooning and global stock markets are increasingly on central-bank life support.
Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.