Budget Deficit

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Reflections On Venezuela's "Economic Miracle"





What this economic crisis does highlight is that short-term success should never be taken as proof of a long-term solution. And this is particularly true when it comes to quasi-socialist and extreme populist governments. In the long-run, countries that follow these policies have a consistent track record, which is basically the same as what we’re witnessing now in Venezuela.

 
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In Latest Humiliation For Illinois, Fitch Downgrades State's Credit Rating To BBB+





Last week, beleaguered Illinois Comptroller Leslie Geissler Munger admitted that, thanks to the bitter budget battle going on in Springfield, the state would miss a $560 million pension payment in November. Now, in a move that shouldn't exactly surprise anyone, Fitch has cut the state's GO rating citing the budget impasse. The move affects some $27 billion in debt.

 
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Facing Dire Financial Straits, Saudi Arabia Delays Contractor Payments To Preserve Cash





As Bloomberg reports, "Saudi Arabia is delaying payments to government contractors as the slump in oil prices pushes the country into a deficit for the first time since 2009."

 
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Getting History Right - Saving Capitalism From Monetary Mismanagement





Capitalism isn’t – wasn’t – the problem. The culprit instead was unsound finance and deeply flawed monetary management. In short, Capitalism cannot function effectively within a backdrop of unfettered cheap finance. Things appear miraculous during the boom, and then the bust discombobulates. Contemporary central bank rate administration essentially abandoned the self-adjusting and regulating market system for determining the price of finance – so fundamental to Capitalism.

 
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Saudis Poke The Russian Bear, Start Oil War In Eastern Europe





"[Putin] hopes that when its ally Iran re-enters the global oil and gas market, Russia will somehow share in the profits, perhaps through new pipelines across Syria. He also wants to stop the Saudis from establishing export routes in Syria. Now that Russian energy supremacy in Europe also is at stake, Putin's determination to resolve the Syrian conflict on his terms can only grow."

 
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Here's What Happened When Venezuela Imposed Gun Control Laws





A few years ago, in response to national outcry, the government of Venezuela took steps to fix this problem. There was too much death, too much crime. So they imposed strict gun control laws to stop the murderers and thieves. The end result? Violent crime actually increased. And Caracas is now one of the most dangerous cities in the world. But across the Andes is another city that used to be one of the most dangerous in the world - Bogota.

 
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Venezuela Is Now The Most Expensive Country In The World





Forget Norway. Japan. Iceland. Switzerland. Or any of the other places around the world that are notorious for being painful on the wallet. Venezuela is now the most expensive country in the world, hands down. To give you an idea, the cost of a 15-minute taxi ride to the beach yesterday afternoon totaled an eye-popping $158.

 
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Brazilian Nightmare Continues As Rousseff Suffers Major Setback, Impeachment Looms





"The BRL will continue to be under pressure. I think it will be a continuous and arduous political struggle from here and some will try to bring the impeachment proposal forward."

 
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Saudi Arabia Declares Spending Moratorium As Oil Rout Bankrupts Kingdom





Last month, when King Salman arrived in Washington to a fleet of Mercedes S-Classes, we asked if, considering the current circumstances, cutting back on spending might be in order. Indeed, in the wake of Saudi Arabia's move to tap debt markets, rumors have been circulating for months that the kingdom has enlisted the help of "advisers" to help rein in the ballooning deficit. Now, Riyadh has effectively declared a spending moratorium in the face of self-inflicted crude carnage.

 
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World's Largest Sovereign Wealth Fund Is Forced To Begin Liquidating Assets





While Reverse QE, or QT, or whatever one wants to call it has become traditionally associated with Emerging Markets and petroleum exporters, nobody had linked it with one of the most advanced Developed Markets in the world which also happens to be an oil exporter, the market with the largest sovereign wealth fun in the world: Norway. That is about to change because as Bloomberg report, "the future may already be here", a future in which Norway's gargantuan $830 billion sovereign wealth fund, the product of two decades of capital accumulation courtesy of Norway's vast petroleum reserves and oil trade, is forced to begin liquidating its vast assets.

 
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Portugal's Ruling Coalition Prevails As Country Votes In What Amounts To Austerity Referendum





The results from Portugal's elections are beginning to trickle in and according to exit polls, Coelho's coalition has prevailed. According to Bloomberg, the ruling coalition of Prime Minister Pedro Passos Coelho has won 38%-43% of vote and 108-116 seats.

 
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A Hapless Brazil Incurs Massive Losses On FX Swaps Amid Currency Carnage





"It is not a problem of liquidity, but of fundamentals"...

 
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