Thursday, February 25, 2021

Tag: FED

Will the IMF, FED, Negative Interest and Digital Money Kill the Western Economy?

by Peter Koenig, New Eastern Outlook:

The IMF, has been instrumental in helping destroying the economy of a myriad of countries, notably, and to start with, the new Russia after the fall of the Soviet Union, Greece, Ukraine and lately Argentina, to mention just a few. Madame Christine Lagarde, as chief of the IMF had a heavy hand in the annihilation of at least the last three mentioned. She is now taking over the Presidency of the European Central Bank (ECB). There, she expects to complete the job that Mario Draghi had started but was not quite able to finish: Further bleeding the economy of Europe, especially southern Europe into anemia.


fromĀ SGTreport:

Bob Kudla the founder of Trade Genius joins me to discuss the worn out globalist play book which includes prop bombs and contrived caravans – and very little else. The hardcore Left Democratic party has nothing left to sell the American people aside from deception and intimidation, and those tactics are no longer working. You can almost smell their panic.

Demographics Imply Interest Rates Rising


from Time Money:

Looking at the global economy in terms of demographics tells us a lot more than meets the eye if you know what to look for. The obvious narratives are that the emerging markets have young populations which are growing quickly (excluding China). This along with the inclusion of free markets has led to their economies adding millions of people to the middle class. On the other hand, the developed countries are enduring an aging population which means more reliance on government programs like Medicare, Medicaid, Social Security and lower tax income, straining the balance sheets of the governments.

Those are the basic effects, but using demographic trends can help us predict more economic metrics such as changes in wages, inflation, inequality, and stock market valuations. One of the most important changes in demographics was the addition of labor supply from China and Eastern Europe since the 1980s.

As you can see from the blue line below, over 300 million workers aged 20-64 were added to the global workforce from those regions from the mid-1980s to the mid-2010s.

This influx of labor pushed down wages and pushed up inequality within countries, but pushed down inequality between countries. It weakened private sector trade unions, lowered interest rates, and lowered inflation. Lower wage growth in America reduces the incentive companies have to make workers more productive. This means less private fixed investment which would improve productivity growth. Low interest rates support the stock market, giving it a higher earnings multiple. This encourages corporations to flood the market with buybacks, further pushing stocks higher.

This explains the current situation we are in as wage growth has been low and stocks have been rising. The reason this trend is pivotal to highlight is because it is reversing. The chart below shows the baby boomers retiring in America, lowering the ratio of the working age to the total population.

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