In the cases over the decades where Modern Monetary Theory (MMT) has been applied, not a few have been spent reacting to the relevant policies of governments and central banks, focusing on the mix of options and the efficiency they will bring to the economy. There is also a minority, however, who have targeted monetary …
Tag: economy
After Inflation, the beginning of Recession or Stagflation?
The inflation phenomenon continues to weaken recently (at 2.5% in June in the Eurozone) although as has been emphasized several times this does not mean that prices are falling. Accuracy remains a “noose” for incomes, a condition that can lead to a parallel weakening of economic activity and investment and ultimately to recession. The odds …
Why is the Russian Economy growing continuously during the War in Ukraine?
The Russian economy during the years of the war in Ukraine “runs like a bullet”, according to the findings of the European Bank for Reconstruction and Development EBRD. The World Economic Outlook of the IMF points out that Russia is expected to grow in 2024 faster than all advanced economies, in particular the Russian economy …
We are nearing the End of the Debt Supercycle
“The 2024 deficit will represent 7% of US gross domestic product while the 2034 deficit will be 6.9% of GDP,” the nonpartisan Congressional Budget Office (CBO) wrote in its latest report. This makes it easy: 7% over a decade roughly doubles the US debt. The CBO now projects this year’s deficit at $2 trillion, a …
Gold is the only lifeline from inflation – Inflation is implicit government bankruptcy
The money supply (the M2 index) in the US is rising again and persistent inflation is no longer a surprise. Price inflation occurs when the quantity of currency increases significantly above private sector demand. For investors, the worst decision in this currency disaster environment is to invest in government bonds and hold cash. The destruction …
The consumer, the average citizen, continues to suffer…
In April, former US Treasury Secretary Larry Summers drew laughs from investors when he said the Fed’s next move might be tightening, not easing. In other words, Mr. Summers is predicting another rate hike, which could cause the markets to… explode. And the truth is that few traders are still laughing. Of course, the likelihood …
Slowly and steadily cracks are appearing in the Financial System
The FED raised interest rates above 5%, yet the US economy is not broken. The bond yield curve has been inverted since 2022 and has remained inverted ever since. The lags looked short, with the US economy only briefly causing concern in 2023 when there was a consensus among market participants that a recession would …
How far or close are we from a painful crash?
The economic cycle we are experiencing is very different from most economic cycles we have experienced to date in our lifetimes. This means that we are in an income-led expansion, but also in an income-led consumption expansion, meaning that citizens in the US are enjoying wage growth of 6% per year, with personal consumption spending …
The European economy will die a slow death day by day – Unless something changes immediately
Europe’s economic underperformance has long worried politicians. But the problem has climbed to the top of the debate agenda now that the development gap with the US has widened, following the twin shocks of the coronavirus pandemic and Russia’s war in Ukraine. Last month, French President Emmanuel Macron warned that Europe faces a “mortal” threat …
The BRICS prepare a Central Bank and buy gold to support the common currency
China, backed by Russia and South Africa, is planning the final assault on the still-strong dollar by introducing a new currency, to be issued by a BRICS central bank that will combine the strengths of the respective currencies of the five largest economies join the group. At the same time, the replacement of the dollar …