One trade war may be enough to push the struggling global economy into another recession, but the U.S. government has apparently decided that it is time to fight trade wars with pretty much all of the major economies around the world at the same time. This is utter insanity, and it is going to have disastrous consequences that will be felt all over the planet. Yes, we need to get tough on trade. If you have followed my work for the last eight years, than you know that I have been a very strong advocate of protecting U.S. manufacturers and U.S. workers. But these things have got to be handled delicately, because any significant disruption at this point could lead to an absolutely crippling global economic crisis. Negotiating on an international level requires a great deal of finesse, because if you mess up it can have monumental consequences. For example, one thing that you shouldn’t do is make an agreement with the second largest economy in the world and then tear it up less than two weeks later…
Read more at:The U.S. Has Decided To Fight Trade Wars With China, Europe, Canada And Mexico Simultaneously, And That Will Be Disastrous For The Global Economy…
Papering over the structural imbalances in the Eurozone with endless bailouts will not resolve the fundamental asymmetries.
Beneath the permanent whatever it takes “rescue” by the European Central Bank (ECB) lie fundamental asymmetries that doom the euro, the joint currency that has been the centerpiece of European unity since its introduction in 1999.
The key imbalance is between export powerhouse Germany, which generates huge trade surpluses, and its trading partners, which run large trade and budget deficits, particularly Portugal, Italy, Ireland, Greece and Spain.
Those outside of Europe may be surprised to learn that Germany’s exports are roughly equal to those of China ($1.2 trillion), even though Germany’s population of 82 million is a mere 6% of China’s 1.3 billion. Germany and China are the world’s top exporters, while the U.S. trails as a distant third.
Read more at:Why the Eurozone and the Euro Are Both Doomed
“I am in a country that is not free… I feel jealous as hell of you guys in America. You don’t know how lucky you are.” — Carl Benjamin (aka Sargon of Akkad), YouTuber with around a million subscribers.
“I am trying to recall a legal case where someone was convicted of a ‘crime’ which cannot be reported on.” — Gerald Batten, UKIP member of the European Parliament.
“UKIP Peer Malcolm Lord Pearson has written to Home Secretary Sajid Javid today saying: if Tommy is murdered or injured in prison he and others will mount a private prosecution against Mr Javid as an accessory, or for misconduct in public office.” — Gerald Batten.
Good on Lord Pearson.
On Friday, British free-speech activist and Islam critic Tommy Robinson was acting as a responsible citizen journalist — reporting live on camera from outside a Leeds courtroom where several Muslims were being tried for child rape — when he was set upon by several police officers.
Read more at: In The UK… You’re Not Allowed To Talk About It. About What? Don’t Ask!
Crushing the “liberal media’s” early excitement at the failure of Trump’s North Korea Summit (and Nobel Peace Prize) hopes, the president took a moment to gloat Friday morning at getting Kim back to the table, after receiving what he described as a “warm and productive” statement from North Korea less than a day after he canceled a planned summit that was supposed to signal the start of North Korea’s denuclearization.
Trump quickly pivoted to North Korea after discussing the Democrats’ strategy of “so obviously rooting against us” during the US’s ongoing talks with North Korea. Then he compared the Dems’ defense of North Korea to the party’s defense of of the FBI’s decision to plant a mole within the Trump campaign.
Read more at:Trump: : “Very Good” To Receive “Warm And Productive Statement From North Korea”
The acceleration of non-linear consequences will surprise the brainwashed, loving-their-servitude mainstream media.
Linear correlations are intuitive: if GDP declines 2% in the next recession, and employment declines 2%, we get it: the scale and size of the decline aligns. In a linear correlation, we’d expect sales to drop by about 2%, businesses closing their doors to increase by about 2%, profits to notch down by about 2%, lending contracts by around 2% and so on.
But the effects of the next recession won’t be linear–they will be non-linear, and far more devastating than whatever modest GDP decline is registered. To paraphrase William Gibson’s insightful observation that “The future is already here — it’s just not very evenly distributed”: the recession is already here, it’s just not evenly distributed– and its effects will be enormously asymmetric.
Read more at:The Next Recession Will Be Devastatingly Non-Linear
It is a matter of personal interest that it was my uncle, Iain Macleod, who invented the term stagflation shortly before he was appointed shadow chancellor in 1965. It is no longer used in its original context. From Hansard (the official record of parliamentary debates) 17 November that year:
We now have the worst of both worlds —not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of “stagflation” situation and history in modern terms is indeed being made.
The inflation that Iain was referring to was of wages, which were averaging an increase of 6.2%, and rising, and stagnation in production, which had declined from an index of 134 to 131. It was this divergence that gave him the opportunity to invent this portmanteau word. It has now passed into more common use to describe an economy that fails to respond to the stimulus of monetary inflation.
Read more at:It’s Not Stagflation… It’s Inflationary Impoverishment
Subprime is calling.
In the first quarter, the delinquency rate on credit-card loan balances at commercial banks other than the largest 100 – so at the 4,788 smaller banks in the US – spiked in to 5.9%. This exceeds the peak during the Financial Crisis. The credit-card charge-off rate at these banks spiked to 8%. This is approaching the peak during the Financial Crisis.
A sobering set of numbers the Federal Reserve Board of Governors released this afternoon.
But overall, across all commercial banks, including the largest banks with the largest credit-card loan balances outstanding, the delinquency rate was 2.54% (not seasonally adjusted). This overall rate was pushed down by the largest 100 banks, whose combined delinquency rate in Q1 was 2.48%.
Read more at:Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller US Banks