Today Venezuela pulled a page out of the Indian "demonetization" playbook, after the country eliminated half the paper cash in circulation by pulling the highest denomination, 100-Bolivar bill, from circulation. "I have decided to take out of circulation bills of 100 bolivars in the next 72 hours," Maduro said in a TV address. "We must keep beating the mafias."
India continues to stagger from bad to worse followinhg Modi's demonetization. With just 35% of ATMs nationwide operational, Goldman warns the shortage of cash continues to incentivize the use of alternate payments, including extension of informal credit and a return to barter systems. Addtionally, the slowdown in activity is dramatically reflected in lower tax collections and discounts offered by luxury car companies.
"The rich will pay what they need to escape harassment; the rest will suffer." Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold. It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry.
The key economic releases this week are ISM non-manufacturing on Monday and University of Michigan consumer sentiment index on Friday. Away from the US economic calendar, initially focus will be on the Italian referendum result, which appears to have been mostly digested by the market as bullish. It will then shift quickly to a critical ECB meeting.
What makes Allison's candidacy especially notable is that he happens to be a prominent critic of the Federal Reserve, as well as an advocate of the gold standard. Allison has said his “long-term ambition” for monetary policy “would be to get rid of the Federal Reserve and get back to a private banking system.”
Following former Goldman Sachs' partner Steve Mnuchin's visit to Trump Tower this morning (as the decision over Treasury Secretary looms), the Trump transition team just announced that Donald Trump and Mike Pence will meet with Goldman Sachs COO Gary Cohn (but provided no details on whatthey would discuss).
European stocks were little changed and oil fell as investors assessed declining prospects for an OPEC deal and risks from Italy’s referendum. Asian stocks declined, while S&P futures pointed to a fractionally higher open, erasing 3 points from yesterday's drop.
Former Dallas Federal Reserve Bank President Richard Fisher recently gave a speech identifying the Federal Reserve’s easy money/low interest rate policies as a source of the public anger that propelled Donald Trump into the White House. Mr. Fisher is certainly correct that the Fed’s policies have “skewered” the middle class. However, the problem is not specific Fed policies, but the very system of fiat currency managed by a secretive central bank.