Bharat Rakshak

Austin wrote:Yes this is day light robbery , So called rule based order where rules are bent to suit ones political agenda

GOI gold is in India AFAIK in RBI vault

The US national debt for the first time ever crossed the $22 trillion mark, Treasury Department data revealed Tuesday. The total US national debt is now $22.012 trillion.

According to the US Congressional Budget Office (CBO), the United States’ federal budget deficit will rise by more than $100 billion to reach $900 billion this year. The CBO said in its January report that over the coming decade, deficits will fluctuate between 4.1 percent and 4.7 percent of gross domestic product (GDP), well above the average over the past half a century.

the US public debt grew roughly by $2 trillion compared to early 2017 when President Donald trump took office, according to the US Treasury Department. Moreover, the rate of increase of the debt accelerated after Trump pushed through $1.5 trillion in tax cuts in December 2017.

Fed: “two ‘19 hikes & Auto QT” in mere weeks turned into “patient & maybe QE regular tool”. Now it’s “past <2% CPI needs future >2% offset”.

So Fed is saying they not only will allow, but actually desire CPI to rise above 2%! Bond market is getting boiled like a frog in a pot.

Achieving more of the SocGen definition of “success” hapless Oudea announced today he is weighing cutting 1000’s of investment banking jobs.

Goal of 2% not just future inflation, but for the future to make up for past “shortfalls” means the real Fed goal is prices 2x every 35 yrs.

Austin wrote:Video on Tump lecturing his negotiator on MOU .Funny

https://www.bloomberg.com/news/articles ... emium-asia

U.S. manufacturing activity has weakened, mainly due to global factors such as weaker foreign demand growth and elevated trade uncertainty. Digging into the details, the greatest declines in manufacturing shipments have been in export-intensive sectors.

Manufacturing industries around the world are undergoing a synchronous slowing (Chart 1). In fact, in some major economies, the manufacturing sector is in contraction (i.e. China, Euro Area), while in the U.S., the pace of expansion has decelerated.

A plausible reason for the turn down in shipments is the direct intensification of the U.S.-China trade war. It’s no coincidence that manufacturing activity and associated exports began falling around the same time as the ratcheting up of the U.S.-China trade war.

Donald Amstad from Aberdeen Standard Investments delivers a sobering assessment on the state of developed market economies.

Developed economies are at a crisis point, the powers of unconventional monetary policy are exhausted, and markets are just beginning to wake up to this. That’s the sobering assessment on the current state of the global economy delivered by Donald Amstad from Aberdeen Standard Investments

His view is that when developed markets finally crack, there will be serious implications for every asset class and economy. However, those economies where monetary policy remains relatively ‘normal’ will be those best placed to respond. In his view, the emerging markets have more levers to pull when compared to developed markets, where the money printing taps have been turned on and interest rate settings are near zero.

The irony is that during the Asian crisis it was the IMF and central bankers from developed markets that convinced the emerging market governments not to print money and ‘take their medicine.’ Amstad says that this was a cathartic process for these economies, and they are now looking on in bewilderment as the West has resorts to money printing of an unprecedented scale.

“In the emerging world, economic and monetary policy is broadly orthodox. It is the West that is running unorthodox economic and monetary policy and it is the West, ironically, that is now on the cliff edge.”

Implications for investors

Amstad says that unconventional monetary policy has been pushed to the limit and that negative yielding bonds are playing havoc with pension funds and with the profitability of banks and other financial institutions. He highlights that while the United States is awash with debt, it is the $125 trillion of unfunded government liabilities that is most concerning.

Furthermore, he says that investors are faced with a scenario where the key defensive or ‘risk-free’ asset in their portfolios appears to be in a bubble. Historically, it has been riskier asset classes that have been the source of financial malaise. For example, it was credit markets in 2007, tech stocks in 2000 and equities in 1987. However, during these periods' bonds have acted as a buffer for balanced portfolios, Amstad questions if this will be the case today.

“What we have never had to cope with before is if there is a bubble in the risk-free asset class. What happens when that goes pop. What is the new risk free?”

Social implications

Central banks have been playing a game of ‘whack-a-mole', using monetary policy tools to quash any flare up in volatility. Under this regime it has been the wealthiest 0.1 per cent of the world population that has benefited from asset price inflation. Amstad argues that we are already seeing financial and economic troubles becoming political and social flare ups.

He expects that these social tensions will only continue to escalate if developed world policy makers are unwilling to take their medicine.

“If they do come out with another bout of QE then banks are going to go bust, pension funds are going to go bust, insurance companies are going to go bust. And if it pushes the stock market back up again, then the 99.9% are probably not going to tolerate more handouts. That leads to social and political instability.”

Watch the full video below for a sobering assessment on the state of developed market economies and the implications for investors.

UlanBatori wrote:What's going on here? Sudden cash crunch?

Is someone mopping up all the cash?

UlanBatori wrote:More on cash crunch. Is this "Chicken Little" aka dhoti shivering?
if short-term cash is short, why are short-term money-market interest rates not rising? Makes no sense. If they offer 20%, I'd be happy to lend them a few paise, hain?