US economic data show fiscal derailment as debt servicing costs rise, which will cast doubt on US geopolitical commitments to Ukraine and Israel, but also set the stage for tax hikes and deflation pressure on stock prices. This highlights that in 2024 the focus will not be on the question of rising interest rates – …
Category: Proposed Fiscal Policies
fiscal analysis
Argentina: Issuing Perpetual Bonds for ‘Haircuts’ Without ‘Haircuts’
The tool of perpetual bonds to service the debt of the perpetually sick and asthmatic Argentina is intended to be used by the President of Argentina, Javier Millay. More specifically, the Argentine president by issuing perpetual debt seeks to repay a $16 billion bond – money that had been used to renationalize the country’s public …
How are Bubbles created in the Economy? – why were the Economies over-indebted? What is the correct solution?
How and why are bubbles created in the financial system? Is it a random error in the path or a structural element of the circumvention of the rules of the functioning of the market? The capitalist economic system has an inherent tendency to develop instability that results in a severe economic crisis. The main mechanism …
The FED serves Wall Street (and capital gains taxes), not the Real Economy
Nobody likes tough macro events, especially during the holiday season, but some things need to be said, according to Trust Economics. As you know, US Federal Reserve Chairman Jerome Powell has promised that 2024 will be the year of interest rate cuts. In this regard, it should be pointed out that Powell is neither a …
Good Luck Argentina: A Promising Liberal Experiment Begins
Argentina is perhaps the only example of a country that, while it was among the 10 richest at the beginning of the 20th century, was driven into poverty by the populist state diet economic model of the Peronists. A country rich in natural resources followed a failed development model based on industrialization behind a wall …
The FED Won’t Help ‘Bidenomics’ – Interest Rates and the 2024 Elections
In recent years, Jerome Powell stood firm on the monetary principles he espoused: The Fed was prepared to do whatever it took until inflation returned to its 2% target. On Tuesday, December 12, 2023, Powell showed signs of a change in attitude. The reasons are obvious and it is certainly beyond any economic logic. At …
USA: Black hole in the US economy – Impossible to finance Ukraine
The “black hole” in the American defense economy risks swallowing the economy of the superpower, and the role of the “global policeman” is called into question… So far, the White House has justified its unwavering support for Ukraine by citing principles such as defending democracy and freedom — both in Ukraine and in the West. …
Pressure on Emerging Economies from the Overvalued Dollar
The rise of the US currency depletes their limited foreign exchange reserves and stunts growth by making their exports more expensive. The strengthening of the dollar over the past year due to continued interest rate hikes by the US Federal Reserve has put severe pressure on many emerging economies, which have seen their national currencies …
Debt and Stagnation threaten Developing Economies
The news brought by the World Bank’s Global Economic Prospects report was not good. First we have the forecast for global growth (https://www.worldbank.org/en/publication/global-economic-prospects). This is now down to 1.7%, well below the 3% previously forecast in June. For developed economies, the forecast is for growth of just 0.5% in 2023, just above the typical recession …
The ECB’s aggressive interest rate hike is causing problems for the EU
The ECB’s aggressive interest rate hike is causing problems for everyone in Europe. To citizens who are asked to pay a higher installment on their mortgage or consumer loan, to businesses that are raising the cost of servicing their loans, to states that see their existing bonds collapse, and even to public debt that, instead …