Tag: economy

Lagarde Says Her ‘Hunch’ Is That ECB Will Adopt Digital Currency

Alexander Weber – November 12, 2020

(Bloomberg) — European Central Bank President Christine Lagarde signaled that her institution could create a digital currency within years in what would be a dramatic change to the euro zone’s financial sector.

“My hunch is that it will come,” Lagarde said Thursday during a virtual panel discussion hosted by the ECB. “If it’s cheaper, faster, more secure for the users then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it.”

The president said it might be two to four years before the project could be launched as it addresses concerns over money laundering, privacy, and the technology involved.

That’s still fast compared to its peers. On the same panel, Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey reiterated their caution. Powell said the Fed will “carefully and thoughtfully” review the issue, and Bailey said there’s a “lot of hard work to think through the implications.”

The ECB took a major step last month by launching a public consultation that runs until the middle of January. Policy makers intend to decide around mid-2021 whether to initiate a full-fledged project and prepare for a possible launch.

China is also advance with plans for a central-bank digital currency.

https://www.msn.com

Floods, Drought Are Destroying Crops and Sparking Food Inflation

Newsmax – October 23, 2020

Wild weather is wreaking havoc on crops around the world, sending their prices skyrocketing.

On wheat farms in the U.S. and Russia, it’s a drought that’s ruining harvests. The soybean fields of Brazil are bone dry too, touched by little more than the occasional shower. In Vietnam, Malaysia and Indonesia, the problem is the exact opposite. Torrential downpours are causing flooding in rice fields and stands of oil palm trees.

The sudden emergence of these supply strains is a big blow to a global economy that has been struggling to regain its footing after the shock of the Covid-19 lockdowns. As prices soar on everything from sugar to cooking oil, millions of working-class families that had already been forced to scale back food purchases in the pandemic are being thrust deeper into financial distress.

What’s more, these increases threaten to push up broader inflation indexes in some countries and could make it harder for central bankers to keep providing monetary stimulus to shore up growth.

The Bloomberg Agriculture Spot Index, a gauge of nine crop prices, has risen 28% since late April to its highest level in more than four years. Wheat earlier this week was the most expensive since 2014.

“The fundamentals have changed dramatically since May,” said Don Roose, president of brokerage U.S. Commodities in Iowa. “The weather is bubbling to the top, and we have demand chugging in a bull market.”

The fallout from the pandemic means that the United Nations was already warning of a worst-case scenario in which about a tenth of the world’s population would go hungry this year. Things could become more dire if grocery costs keep rising and even more people can’t afford to eat.

https://www.newsmax.com

Bank of England eyes sub-zero rates in face of virus, Brexit

The Canadian Press – September 17, 2020

LONDON — The Bank of England indicated Thursday that it could cut interest rates below zero for the first time in its 326-year history as it tries to shore up a U.K. economic recovery that is facing the dual headwinds of the coronavirus and Brexit.

After unanimously deciding to maintain the bank’s main interest rate at the record low of 0.1%, the nine-member rate-setting Monetary Policy Committee said it had discussed its “policy toolkit, and the effectiveness of negative policy rates in particular.”

In minutes accompanying the decision, the rate-setters said a recent wave of virus infections has “the potential to weigh further on economic activity, albeit probably on a lesser scale than seen earlier in the year.”

Though the committee noted that recent economic data have been a “little stronger than expected” at its last meeting in early August, it said it is unclear what that says about the future “given the risks.”

One clear concern relates to whether Britain, like others in Europe, will reimpose broad restrictions on businesses and public life after the recent flare-up in virus infections across the region. Already social gatherings are being restricted and certain areas of the U.K. are seeing localized lockdowns.

The British economy suffered one of the deepest recessions in the world this year when many sectors were effectively mothballed to help contain the pandemic. Though it recouped some ground in the summer as lockdown restrictions were eased, the economy was still around 12% smaller at the end of July than it was in February, when the pandemic started in Europe.

https://ca.finance.yahoo.com

Pandemic has accelerated adoption of digital currency: ECB President

Turner Wright – September 11, 2020

The pandemic has seen consumers adopt digital payments in increasing numbers and the trend was accelerating, said the President of the European Central Bank (ECB) Christine Lagarde.

She also indicated a panel of euro-zone central bank officials is set to reveal a verdict on a European central bank digital currency (CBDC) imminently.

Speaking at an online conference hosted by Deutsche Bundesbank on Sept. 10, Lagarde, stated that EU residents had embraced digitalization, with e-commerce sales increasing roughly 20% between February and June, even as total retail sales declined 1.2%. She said the volume of online payments had experienced “double-digit growth rates” since the start of the outbreak.

“The pandemic has served as a catalyst, accelerating the transition towards a digital new normal,” Lagarde stated. “A vast majority of consumers expect to continue to use digital services as often as they do now or even more often.”

Other institutions have reached the same conclusion as data comes in regarding the economic fallout of COVID. An August report from Singapore’s DBS Bank stated that “the ongoing pandemic has added fuel to the move toward a society with less cash dependence.”

Lagarde supports the ECB developing a CBDC to address the move towards digitalization, in addition to faster and cheaper cross-border payments. Last September, when she was the head of the International Monetary Fund (IMF), the ECB president said she would focus on ensuring EU institutions adapt to the changing financial environment by being open to crypto.

https://cointelegraph.com

We Are Experiencing Economic Devastation On A Scale That America Has Never Seen Before

– July 30, 2020

For a very long time we have been warned that a U.S. economic collapse was inevitably coming, and now it is here.  Fear of COVID-19 and unprecedented civil unrest in our major cities have combined to plunge us into a historic economic downturn, and nobody is exactly sure what is going to happen next.  On Thursday, we learned that U.S. GDP was down 32.9 percent on an annualized basis last quarter.  That officially makes last quarter the worst quarter in all of U.S. history, and many people believe that this new economic depression is just getting started.  But of course not all areas of the country are being affected equally.  According to USA Today, states such as Hawaii, Nevada, Michigan and New York were hit particularly hard last quarter…

Every state was walloped last quarter, though ones that rely heavily on travel and tourism, such as Hawaii and Nevada, were hit hardest by the downturn, according to employment figures analyzed by economist Adam Kamins of Moody’s Analytics. Michigan, the heart of the nation’s auto industry, was slammed as consumers put off car purchases. And densely populated Northeast states struck by the most severe virus outbreaks – like New York, New Jersey and Massachusetts – absorbed among the heaviest economic losses as governors shut down earlier and residents stayed home.

Originally, the mainstream media was telling us that the U.S. economy would come surging back to life during the third quarter, but we continue to get more signs that indicate that the economy is starting to slow down again.

For example, the Labor Department just released some new numbers that were more than just a little bit startling.  If you can believe it, another 1.434 million Americans filed new claims for unemployment benefits last week.  That was an increase over last week’s revised number, and it represents the second week in a row that initial claims have risen.

Overall, new claims for unemployment benefits have now been above one million for 19 weeks in a row.

http://theeconomiccollapseblog.com

The U.S. Economy Hasn’t Experienced Anything Like This Since The Great Depression Of The 1930s

– July 7, 2020

The recession of 2008 and 2009 was bad, but it was nothing like this.  Even though this new economic downturn is only a few months old, we are already seeing numbers that we haven’t seen since the worst parts of the Great Depression of the 1930s.  More than 48 million Americans have filed new claims for unemployment benefits over the past 15 weeks, well over 100,000 businesses have permanently closed their doors, and civil unrest has turned quite a few of our major cities into war zones.  But not all areas of the country are being affected equally.  For example, there are rural areas that haven’t really seen a lot of COVID-19 cases where life seems to have changed very little from six months ago.  On the other hand, some urban areas that have been hit really hard by COVID-19 have been absolutely devastated economically.  For example, the New York Times is reporting that a million jobs have been lost in New York City, and the unemployment rate for NYC “is hovering near 20 percent”…

The city is staggering toward reopening with some workers back at their desks or behind cash registers, and on Monday, it began a new phase, allowing personal-care services like nail salons and some outdoor recreation to resume. Even so, the city’s unemployment rate is hovering near 20 percent — a figure not seen since the Great Depression.

We are going to be using the phrase “since the Great Depression” a lot in the coming months.

http://theeconomiccollapseblog.com

US national debt hits $26 TRILLION, soaring by $1 trillion just in one month

RT – June 11, 2020

The latest data from the Treasury Department shows that the US gross national debt has exceeded $26 trillion for the first time, as the nation grapples with economic relief from the Covid-19 pandemic.

National debt is up from $23.5 trillion in March, with an increase of $1 trillion since May 5. According to CBS News, citing data from the Treasury, public debt has grown by $6 trillion since President Donald Trump took office in 2017.

“The Treasury Department notes that the growth in public debt was caused by the allocation of funds for the COVID-19 pandemic counteraction program and the pandemic-related tax deferral,” CBS reported.

The US government has allocated trillions of dollars in coronavirus relief since the start of the pandemic. The so-called CARES Act (Coronavirus Aid, Relief and Economic Security) was adopted in March and earmarked $2 trillion, while the $3 trillion HEROES Act (Health and Economic Recovery Omnibus Emergency Solutions) was passed by the House of Representatives in May.

According to the Treasury’s monthly report, the federal government budget deficit for the first eight months of the current fiscal year (which started on 1 October 2019) has reached $1.88 trillion – already higher than any full fiscal year deficit in US history.The 2020 eight-month deficit more than doubled the $738.6 billion deficit for the same period in the 2019 fiscal year.

https://www.rt.com

U.S. Lost 20.5 Million Jobs in April, Unemployment Soared to 14.7%

John Carney – May 8, 2020

The unemployment rate jumped to 14.7 percent in April and the economy shed 20.5 million jobs, according to data released by the Department of Labor on Friday.

April was the second consecutive month of job losses for the U.S. economy following the record 113 months run of expanding employment rolls.

Economists had forecast that the economy would lose 21 million jobs and that the unemployment rate would climb from 4.4 percent to 16 percent. So the April figures were better than expected.

March’s job losses were revised up from a loss of 701,000 to 870,000. February, which saw job gains, was revised down by 45,000 from 275,000 to 230,000, a reminder of how just how strong the jobs market was prior to the onset of the coronavirus crisis.

Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality, the Labor Department said. Both average hourly earnings and average hours worked moved up in April, likely reflecting businesses shedding newer and lower-paid employees first and attempting to make do with smaller payrolls by increasing hours.

Manufacturing shed 1.3 million jobs, including 381,500 in the auto sector. Construction lost 975,000 jobs. Health care and social assistance shrank by more than 2 million jobs.

White-collar positions have not been immune to the coronavirus jobs catastrophe. Information technology and financial services sectors shrank by more than one-quarter of a million jobs. Business services lost 2.1 million jobs.

https://www.breitbart.com

Over 30 Million Americans Have Lost Their Jobs In The Last Six Weeks

Tyler Durden – April 30, 2020

In the last week 3.839 million Americans filed for unemployment benefits for the first time.

That brings the six-week total to 30.31 million, which is over 12 times the prior worst five-week period in the last 50-plus years.

And of course, last week’s “initial” claims and this week’s “continuing” claims… the highest level of continuing claims ever.

A breakdown by states shows that claims generally declined, with the biggest drops in California, Florida and Connecticut, while Washington, Georgia and New York saw a continued pick up.

And as we noted previously, what is most disturbing is that in the last six weeks, far more Americans have filed for unemployment than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 30.3 million lost in 6 weeks)

Worse still, the final numbers will likely be worsened due to the bailout itself: as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31. A recent WSJ article noted that this has created incentives for some businesses to temporarily furlough their employees, knowing that they will be covered financially as the economy is shutdown. Meanwhile, those making below $50k will generally be made whole and possibly be better off on unemployment benefits.

https://www.activistpost.com

‘Risk of Failure Real’: Italy’s PM Giuseppe Conte Warns Coronavirus Could Bring About EU’s Downfall

Sputnik News – April 9, 2020

As Europe has become the epicentre of the coronavirus epidemic, with almost 700,000 confirmed cases, and Italy particularly hard-hit, the pandemic has become a stress-test for EU unity, as stark differences have thwarted an agreement on more support for coronavirus-hit economies, with talks suspended.

Italy’s Prime Minister Giuseppe Conte has warned that the European Union risks failing amid the coronavirus global pandemic, reported the BBC.

According to Conte, the EU must “rise to the challenge” of what he referred to as “the biggest test since the Second World War” and take concerted efforts to extend much-needed aid to the countries that were worst hit by the spread of the COVID-19 respiratory virus.

The Italian Prime Minister insisted that Europe’s leaders were “facing an appointment with history”.

“If we do not seize the opportunity to put new life into the European project, the risk of failure is real,” said Conte.

As the infection rate in Italy shows signs of decelerating, and the death toll gradually starting to diminish, Giuseppe Conte warned viewers  against lowering their guard and emphasised that the national lockdown could only be eased slowly.

https://sputniknews.com