Governments and their central bank creations usurped market-based monetary and banking systems to serve the plundering purposes of kings, princes, parliaments, and special interest groups who all wanted to hold the magical hand of the monetary printing press. Print up money (or its digital substitutes and surrogates in more modern times) and you can have access to all the hard work of others without the reciprocal effort. The monetary social engineers' century-long legacy in the arena of money and banking has been the booms and busts of the business cycle. The time has come to end the tragic and disruptive reign of monetary central planning.
Heroic efforts are being made to cloak the stagnation of the U.S. economy. One of these is to shift the unemployed work force from the negative-sounding jobless category to the benign-sounding Not in the Labor Force (NILF) category. But re-labeling stagnation does not magically transform a stagnant economy. To get a sense of long-term stagnation, let's look at the data going back 38 years, to 1977.
It just keeps getting worse, and worse, and worse...
And just like that Weimar 2.0 is born.
The negative feedback look between Brazil's political and economic crises is serving to make each day worse than the last. Tuesday was no exception...
As of today you really can pay your taxes, your credit cards, your mortgage, shop at Costco, and buy your groceries without so much as a bank account while using sound money.
"Instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’?... CBs directly monetizing Government spending and funding projects would do the same. Whilst ultimately it would lead to stagflation (UK, 70s) or deflation (China, today), it could provide strong initial boost to generate impression of recovery and sustainable business cycle... What is probability of the above policy shift? Low over next six months; very high over the longer term."
- Bail-ins, withdrawal limits and negative interest rates may be imposed - FT proposes a ban on “barbarous relic” cash - Central banks and banks would have citizen's wealth and people themselves “completely under their control” ...
Brazil, whose economy officially slid into recession in Q2 - a quarter during which Brazilians suffered through the worst inflation-growth outcome (i.e. stagflation) in over a decade - and whose efforts to plug a yawning budget gap are complicated by political infighting and a growing public outcry against embattled President Dilma Rousseff, has been cut to junk by S&P.
FX Traders Fear "Worst Case Scenario" For Brazil As FinMin Cancels Travel Plans, Rousseff Meets With LulaSubmitted by Tyler Durden on 09/03/2015 18:24 -0400
The situation in Brazil is deteriorating rapidly after finance minister Joaquim Levy canceled a G20 appearance in Turkey (irony) and convened a meeting with embattled President Dilma Rousseff. FX traders fear a worst case scenario involving Levy's exit. Meanwhile, former President Luiz Inacio Lula da Silva is en route to Brasilia tonight to meet with Rousseff one-on-one.
"In the meantime, in our (un)beloved country, there is something scarier than Freddy Krueger: our growth / fiscal outlook."
...as soon as credit expansion stops, the piper must be paid, and the inevitable readjustments must liquidate the unsound overinvestments of the boom and redirect the economy. And, of course, the longer the boom is kept going, the greater the malinvestments that must be liquidated, and the more harrowing the readjustments that must be made.
You know what they say: when it rains it pours, especially when you’re the poster child for an epic emerging market unwind and you’re suffering through the worst inflation-growth outcome in over a decade while trying to combat dual deficits and ward off political and social upheaval.
Brazil's flagging economy, which is mired in stagflation and remains a slave both to China and to what looks like intractable political turmoil, has destroyed nearly 550,000 jobs YTD. As Barclays notes, " [the July] print is compatible with 140,939 job eliminations, pretty close to the historical low of -154,355 in June."