“No one likes to admit defeat. But global policymakers, who continue to insist that there’s more they can do to revive growth and inflation, are starting to sound like Monty Python’s Black Knight (click to see video)..."
Trigger Warning: The following article includes an abundance of insults and harsh words directed at individuals of both of the male and female sex as well as politically incorrect statements including digs at cross-dressers and people worried about the weather. If you feel “triggered” by any of the statements, please see a psychiatrist.
Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it’s basically crickets (sole exception: Politico). Gee, we wonder why? Those who elected Mr. Hollande did so because they expected him to deliver the loot. His problem is that he’s running out of stuff to loot.
If you think the Federal Reserve’s goal is to maintain or repair the U.S. economy, then you will never understand why they do the things they do or why the economy evolves the way that it does. The Fed’s job is not to protect the U.S. economy. The Fed’s job is to DESTROY the U.S. economy to make way for a truly global system.
Government as we know it is doomed. It will not recognize this reality until markets and/or citizens force it. This time is likely close and the process will not be painless. The more government ignores what is inevitable the greater the pain will be. One hopes that civilization does not enter an economic and anarchical Dark Ages. To the extent that government refuses to respond to the fantasy world they have created, the more likely that is to be the outcome.
"There is a concern that this competitive devaluations channel (the first link) may have broken down (to a large extent) because of the collapse in global trade. Global growth today is generating much less trade growth than in the past (chart below). As a result, currency adjustment is not enough to spur growth significantly because global trade is increasingly less important to the overall makeup of GDP. This raises the possibility that the currency war is largely futile."
It appears the plutocrats themselves are awakening to their own limitations of omnipotence over the world. Their ability to falsify the economic well being of the developed world has deteriorated so sharply so quickly that what was once a threat has become a reality, manifesting through the likes of Sanders and Trump. But revolts can be crushed and that is the strategy of MoveOn.org: simple and utter brutishness.
While some may appreciate Warren’s optimistic view of the future, ignoring the facts will only delay the inevitable need for reforms needed to allow future generations to become “the next great generation.”
Earlier today Berkshire Hathaway released its 2015 annual report, which among other things includes Buffett's traditional annual observations and insights. Buffett brushes past last year’s disappointing stock performance, muses on the future of America while taking a swipe at Donald Trump, dwells on Berkshire’s ties to Brazilian PE firm 3G, talks about Berkshire’s big 2015 deal, defends manufactured-housing unit Clayton Homes, bashes inequality and capitalists (just not the crony kind), and concludes with a summary of the biggest risks facing America.
One question now dominates the global macro discussion: has subdued global growth and trade become the norm in the post-crisis world? That is, have lackluster growth and trade become structural and endemic rather than transient and cyclical? Spoiler alert: Yes.
“It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse but we are better prepared.”
Back in November, Nils Smedegaard Andersen, CEO of Maersk, the world’s largest shipping company, gave the world a reality check when it comes to global growth and trade. “The world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting” Andersen told Bloomberg. On Wednesday, we got a look at how the challenging environment affected Maersk's bottom line in 2015. The picture wasn't pretty.