Tag: economy

This “Temporary” Inflation Is Turning into an Inflation Spiral

Wolf Richter- July 11, 2021

This year, inflation blasted off with a vengeance, and the last four months have seen the hottest pace of inflation since the 1980s.

The consumer price index – the CPI – rose 5% year-over-year for May. The June reading will come out in a couple of days [update: June CPI came in at 5.4%]. 5% of annual inflation is bad enough. But the pace of inflation over the past four months has been much higher, clocking in at over 8% annualized.

Surely, some inflation measures will tick down in the near future, giving everyone false hopes, before rising again. The first bout of inflation always looks temporary. But during those first bouts of inflation, that’s when the triggers of “persistent” inflation – namely the inflationary mindset and inflation expectations – are being unleashed.

So now the Fed keeps repeating time after time that this is temporary and that it will go away on its own because it was caused by temporary factors, namely a demand shock that occurred because the government spread $5 trillion in borrowed stimulus money since March last year; and because the Fed printed $4 trillion over the same period and repressed interest rates to 0%.

This moolah stimulated consumption, in a huge way, and it caused a historic spike in demand for goods, and there are now cascading shortages from ammo to semiconductors, made worse by container shortages and transportation bottlenecks.

But the fiscal and monetary stimuli are still ongoing. The government and the Fed still have the foot fully on the accelerator.

https://wolfstreet.com

G20: Finance ministers meet to discuss global tax reform

DW – July 9, 2021

The Italian city of Venice is set to host a summit of finance ministers and central bankers from the G20 countries on Friday.

Top of the agenda is implementing a  global tax reform, spearheaded by the US Treasury Secretary Janet Yellen, that proposes a minimum corporate income tax of 15%.

Some 130 countries already backed the plan, brokered by the Paris-based Organization for Economic Cooperation and Development (OECD).

The minimum tax rate would bring in an estimated $150 billion (€127 billion) in additional tax revenues globally.

Who benefits most from tax reform?

The G20 members, which comprise the world’s largest economies and account for over 80% of global GDP, are expected to be the main winners from the planned tax reform.

Tax havens that slashed their corporate taxes to incentivize multinational companies to set up headquarters there would lose out the most.

Nevertheless, many, such as Panama and Bermuda, have signed up.

Countries will have until the end of 2023 to put the proposed tax reform into law. But ministers may question the ability of the US government to get such a proposal through the hotly divided US Congress where Republicans have already fought against US President Joe Biden’s domestic tax plans.

Pockets of resistance

Not all countries have agreed to the deal, however, with EU member states Ireland, Estonia and Hungary holding back.

https://www.dw.com

China on Cusp of Eliminating Cash, Pushing the World Toward Total Government Surveillance

George Thomas – July 1, 2021

The Chinese were the first in the world to invent paper money back in the 7th Century.

Now, more than 1,400 years later, China is again on the cusp of creating a new form of government currency that some say could pose a serious economic threat to America and the West.

“In effect, they are not cryptocurrencies, they are not so-called stable coins, in effect, they are the national physical currency of a country just represented in a digital form,” said Erik Bethel, former U.S. executive director with the World Bank.

Bethel says while the world fixates on private cryptocurrencies like Bitcoin, Beijing is busy building a digital version of its own currency, the Yuan, also known as the Renminbi, to control its citizens and eventually threaten the dominance of the U.S. Dollar.

“They’ve pretty much created all of the building blocks that will allow a central bank digital currency to flourish,” Bethel told CBN News.

Yaya Fanusie, a former economic and counterterrorism analyst in the CIA, says China’s goal is to replace cash with a digital currency that’s controlled by the communist government’s central bank.

“China has said for a while that it expects to be pretty much a cashless society in the future so the idea is that cash notes, coins will no longer be around and so people will be using digital currency that’s going to be in their wallets,” said Yaya Fanusie, a senior fellow at the Center for a New American Security.

That digital currency will also be issued by the government bank allowing what Congressman Michael McCaul, the top Republican on the House Foreign Affairs Committee, says is unprecedented access to people’s financial transactions.

https://www1.cbn.com

Israel Begins Testing Of New World Order Centralized Digital Currency

Mac Slavo – June 22, 2021

We are down to the wire. The digital dollar is here and is now being tested in a pilot program in Israel.  If we, as a society, are not yet aware enough to reject this obvious enslavement, we are all in big trouble.

Andrew Abir, the Deputy Governor of the Bank of Israel, has started to issue digital shekels as the first step of an internal pilot program. The idea of the digital shekel has been kicked around since 2017 but, Israel decided to put the development of its central bank digital currency (CBDC) into high gear. As reported by The Jerusalem Post and published in a report by Yahoo News, the pilot test was announced by Abir at a conference of the Fair Value Forum of IDC Herzliya.

We all know by now that a fully controlled and centralized digital dollar is one of the keys to the total enslavement of mankind.  If we want any chance at all in the future or even care about humanity, people will need to reject this as what it is: your slave marker. The central banks will essentially own you.

The digital dollar/shekel/euro etc. will be controlled by the central banks and turned off as the rulers see fit.  They will ensure that you are taxed immediately and will stop transactions on a whim.  You will be allowed to only do what you are told and obey. If you choose to dissent, you will be cut off from any of the funds that you earned. We had better start to unite and stand up for each other against this or they will continue to divide and conquer:

During his speech, Abir stated that the Bank of Israel had already run a digital currency pilot, much to the surprise of everyone in attendance. The report suggests that this was an unintentional reveal by the bank’s Deputy Governor when discussing the need for a digital shekel and its possible effects on the financial sector. –Yahoo News

This isn’t new. This is a part of the Great Reset into a totalitarian slave dystopia.

https://www.shtfplan.com

Ranchers Sell Off Cattle And Farmers Idle Hundreds Of Thousands Of Acres As America’s Drought Emergency Escalates

– June 9, 2021

In my entire lifetime, this is the worst that drought conditions have ever been in the western half of the country.  During the past 20 years, the amount of territory in the West considered to be suffering from exceptional drought has never gone higher than 11 percent until now.  Today, that number is sitting at 27 percent.  The term “mega-drought” is being thrown around a lot these days to describe what is happening, but this isn’t just a drought.  This is a true national emergency, and it is really starting to affect our food supply.

Just look at what is happening up in North Dakota.  The vast majority of the state is either in the worst level of drought or the second worst level of drought, and ranchers are auctioning off their cattle by the thousands…

“Normally this time of the year, we’re probably looking at 400-600 head and a lot of times would be every other week,” said former auctioneer Ron Torgerson.

On Sunday and Monday, more than 4,200 head of cattle were sold at Rugby Livestock and Auction.

Needless to say, ranchers in North Dakota don’t want to get rid of their cattle, but the drought has pushed prices for hay and corn so high that many of them simply have no choice.

http://theeconomiccollapseblog.com

Higher Prices at the Grocery Store as Ag Futures Surge the Most in 8 Years

Mish – April 26, 2021

The Bloomberg Agriculture Spot Index surged the most in nearly nine years, driven by a rally in crop futures.

Expect Grocery Shock

With futures surging, Grocery Price Shock Is Coming to a Store Near You.

With global food prices already at the highest since mid-2014, this latest jump is being closely watched because staple crops are a ubiquitous influence on grocery shelves — from bread and pizza dough to meat and even soda.

“The relentless rise in prices acts as a misery multiplier, driving millions deeper into hunger and desperation,” Chris Nikoi, the World Food Programme’s regional director for West Africa, said earlier this month. It’s “pushing a basic meal beyond the reach of millions of poor families who were already struggling to get by.”

And commodities aren’t the only component in driving up the price of food. Higher freight costs and other supply-chain headaches as well as packaging can all add up. Food and beverage giants are already signaling they’re watching margins. Coca-Cola Co. has flagged higher costs in plastic and aluminum, as well as coffee and high-fructose corn syrup, the key ingredient in soda. Nestle SA, the world’s biggest food company, warned it won’t be able to hedge all of its commodity costs and it’s raising prices where appropriate.

https://mishtalk.com

WEF Warns of Cyber Attack Leading to Systemic Collapse of the Global Financial System

Whitney Webb – April 7, 2021

A report published last year by the WEF-Carnegie Cyber Policy Initiative calls for the merging of Wall Street banks, their regulators and intelligence agencies as necessary to confront an allegedly imminent cyber attack that will collapse the existing financial system.

In November 2020, the World Economic Forum (WEF) and Carnegie Endowment for International Peace co-produced a report that warned that the global financial system was increasingly vulnerable to cyber attacks. Advisors to the group that produced the report included representatives from the Federal Reserve, the Bank of England, the International Monetary Fund, Wall Street giants likes JP Morgan Chase and Silicon Valley behemoths like Amazon.

The ominous report was published just months after the World Economic Forum had conducted a simulation of that very event – a cyber attack that brings the global financial system to its knees – in partnership with Russia’s largest bank, which is due to jumpstart that country’s economic “digital transformation” with the launch of its own central bank-backed digital currency.

More recently, last Tuesday, the largest information sharing organization of the financial industry, whose known members include Bank of America, Wells Fargo and CitiGroup, have again warned that nation-state hackers and cybercriminals were poised to work together to attack the global financial system in the short term. The CEO of this organization, known as the Financial Services Information Sharing and Analysis Center (FS-ISAC), had previously advised the WEF-Carnegie report that had warned much the same.

Such coordinated simulations and warnings from those who dominate the current, ailing financial system are obvious cause for concern, particularly given that the World Economic Forum is well known for its Event 201 simulation about a global coronavirus pandemic that took place just months prior to the COVID-19 crisis.

https://www.activistpost.com

US Dollar’s Status as Dominant “Global Reserve Currency” Drops to 25-Year Low

Wolf Richter – March 31, 2021

The global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995. These foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, US Commercial Mortgage Backed Securities, etc. held by foreign central banks.

Since 2014, the dollar’s share has dropped by 7 full percentage points, from 66% to 59%, on average 1 percentage point per year. At this rate, the dollar’s share would fall below 50% over the next decade.

Not included in global foreign exchange reserves are the Fed’s own holdings of dollar-denominated assets, its $4.9 trillion in Treasury securities and $2.2 trillion in mortgage-backed securities, that it amassed as part of its QE.

The US dollar’s status as the dominant global reserve currency is a crucial enabler for the US government to keep ballooning its public debt, and for Corporate America’s relentless efforts to create the vast trade deficits by offshoring production to cheap countries, most prominently China and Mexico. They’re all counting on the willingness of other central banks to hold large amounts of dollar-denominated debt.

But it seems, central banks have been getting just a tad nervous and want to diversify their holdings – but ever so slowly, and not all of a sudden, given the magnitude of this thing, which, if mishandled, could blow over everyone’s house of cards.

https://wolfstreet.com

World debt soars to record $281 TRILLION in 2020, set to rise again this year – report

RT – February 21, 2021

The Covid-19 pandemic has added $24 trillion to the global debt mountain over the last year, the Institute of International Finance (IIF) said. Government spending has accounted for about half of the increase.

Corporations added $5.4 trillion to the total, while banks and households accounted for $3.9 trillion and $2.6 trillion respectively.

With global debt now totaling a record $281 trillion, the ratio of debt to global GDP has risen 35 percentage points to over 355 percent, the institute’s study shows. The increase in debt is larger than the rise seen during the global financial crisis, in which 2008 and 2009 saw 10-percent and 15-percent debt-to-GDP jumps respectively.

Borrowing levels are expected to run well above pre-pandemic levels in many countries and sectors again this year, supported by still-low interest rates.

“We expect global government debt to increase by another $10 trillion this year and surpass $92 trillion,” the IIF said, adding that slowing down support could prove even more challenging than it was after the financial crisis.

“Political and social pressure could limit governments’ efforts to reduce deficits and debt, jeopardizing their ability to cope with future crises. This could also constrain policy responses to mitigate the adverse impacts of climate change and natural capital loss,” it added.

According to the report, rises in debt were particularly sharp in Europe, with non-financial sector debt-to-GDP ratios in France, Spain, and Greece increasing by 50 percent.

https://www.rt.com

U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years

Alex Tanzi and Catarina Saraiva – January 25, 2021

(Bloomberg) — The end of 2020 brought the sharpest rise in the U.S. poverty rate since the 1960s, according to a study released Monday.

Economists Bruce Meyer, from the University of Chicago, and James Sullivan of the University of Notre Dame found that the poverty rate increased by 2.4 percentage points during the latter half of 2020 as the U.S. continued to suffer the economic impacts from Covid-19.

That percentage-point rise is nearly double the largest annual increase in poverty since the 1960s. This means an additional 8 million people nationwide are now considered poor. Moreover, the poverty rate for Black Americans is estimated to have jumped by 5.4 percentage points, or by 2.4 million individuals.

The scholars’ findings put the rate at 11.8% in December. While poverty is down from readings of more than 15% a decade earlier, the new estimates suggest that the annual Census Bureau tally due in September will be higher than the last official, pre-pandemic level of 10.5% in 2019.

Black Americans were more than twice as likely to be poor as their White counterparts in December — an improvement from the summer months when they were nearly three times more apt to live in poverty — but an increase from before the pandemic, when the differential was under 2.

Despite improvements in the overall poverty rate since the middle of the 20th century, Black Americans had been about three times as likely to be poor as White Americans for most of the past 60 years. The gap started to narrow after the financial crisis, during the longest economic expansion in history.

These December poverty estimates are based on survey data collected late in the month after some government relief measures expired. The researchers found that the stimulus checks the federal government issued in the spring helped forestall the poverty rate from rising even faster.

https://www.msn.com