Pension funds and insurance companies,
which are dependent for their financing on investment in long-term government
bonds, were particularly adversely affected, with their solvency “threatened by
a prolonged period of low interest rates.”
AMERICA’S TWISTED ROAD TO
REVOLUTION:
Fighting back Wall Street’s
Looting and Rule
http://mexicanoccupation.blogspot.com/2016/09/america-nation-ruled-wall-streets.html
OBAMA-CLINTONOMICS:
THE FINAL TRANSFER OF AMERICA’ ECONOMY TO THE SUPER RICH!
http://mexicanoccupation.blogspot.com/2016/09/barack-obama-and-his-crony-bankstershow.html
THE GREAT DEPRESSION IS JUST AROUND
THE/ALL CORNERS!
AMERICA’S
ECONOMIC ARMAGEDDON
Under
Obama-Clintonomics, the rich became VERY rich and we got the tax bills for
their bailouts and crimes!
30
REASONS FOR 30 YEARS IN PRISON FOR HILLARY!
THE UGLY, SORDID, CORRUPT AND SLEAZY LIFE OF BILLARY AND HILLARY CLINTON:Thirty reasons
not to vote for Hillary
She would make a terrible president and Bill an equally terrible
“First Gentleman” for these thirty reasons.
As geo-political and economic
tensions mount
IMF warns of record high
global debt
By Nick Beams
7 October 2016
Eight years after the eruption of the global financial crisis, the
conditions are being created for another meltdown of even bigger proportions,
amid rising geo-political and economic tensions between the major capitalist
powers.
This is the implication of three
reports issued by the International Monetary Fund in preparation for its annual
meeting, which begins in Washington today. The World Economic Outlook reported lower growth in all the
advanced economies, underscoring the lack of a genuine recovery in the global
economy, while two financial reports pointed to mounting instability resulting
from the injection by central banks of trillions of dollars into the world
financial system.
Taken together, the reports point to the underlying economic
contradictions that are fuelling a series of crises. These include slowing
world trade and rising protectionist measures, the row between the US and the
European Union over tax payments by Apple, the move by the US Justice
Department to impose a $14 billion penalty on Deutsche Bank, the breakdown in
talks on the US-sponsored Transatlantic Trade and Investment Partnership, and
accusations from politicians in Berlin that the US is waging “economic
warfare.”
The increasing instability of the
financial system was highlighted in the IMF’s twice-yearly Fiscal Monitor report issued on Wednesday. It found
that debt in the nonfinancial sector of the world economy had doubled in nominal
terms since the turn of the century, reaching $152 trillion last year and
continuing to rise.
Current debt levels are 225 percent of global gross domestic
product (GDP), rising from 200 percent in 2002. The IMF said that while there
was no consensus on how much debt was too much, current debt levels, of which
two-thirds is privately held, were at a record high.
There was a need for deleveraging, but the current low-growth
environment was making “the adjustment very difficult, setting the stage for a
vicious feedback loop in which lower growth hampers deleveraging and the debt
overhang exacerbates the slowdown.”
The report said the debt overhang problem, characterised as a
situation in which the borrower’s debt service liability exceeds its future
repayment capacity, “resides squarely within advanced economies’ private
sector.”
While the IMF did not make the point,
its analysis exposes the claim that too much government spending is the cause
of mounting financial problems. According to the Fiscal Monitor report, the easing of restrictions on
credit meant that nonfinancial private-sector debt in the major economies
increased by 35 percent of GDP in the years leading up to the global financial
crisis.
Significantly, there was a rapid rise in household debt in this
period. The report did not point to the reasons, but two major factors
undoubtedly were the low level of wage increases, forcing increased borrowing,
and the surge in house prices in a number of countries, itself a product of
credit expansion. The IMF noted that in some countries—Australia, Canada and
Singapore—private-sector debt had continued to accumulate at a fast pace.
The report found that public debt, which makes up one-third of the
total, had risen from 70 percent of global GDP to 85 percent. But almost half
of this increase was a result of low nominal growth. In other words, far from
the rise in government debt being the result of “profligate” spending on
health, pensions and social services—the mantra of those demanding
austerity—its expansion is rooted in the ongoing stagnation following the 2008
financial crisis.
A second financial report, Global Financial Stability, drew out
the growing risks to the financial system. It said that while short-term risks
had abated since the previous report in April, “the medium-term risks are
building.” The continued slowdown in global growth had prompted financial
markets to expect a continued period of low inflation, low interest rates and
“an even longer delay in normalizing monetary policy.”
It warned, however, that some monetary policies, such as negative
interest rates, were “reaching the limits of their effectiveness, and the
medium-term side effects of low rates are rising for banks and other financial
institutions.”
Pension funds and insurance companies,
which are dependent for their financing on investment in long-term government
bonds, were particularly adversely affected, with their solvency “threatened by
a prolonged period of low interest rates.”
Financial institutions as a whole in the advanced economies faced
a “number of cyclical and structural challenges and need to adapt to the new
era of low growth and low interest rates.” If these challenges were left
unaddressed, it “could undermine financial soundness.”
These problems go to the very heart of the capitalist financial
system—the banks. The report stated that weak profitability could “erode banks’
buffers and undermine their ability to support growth.” Even if there were a
cyclical recovery in the economy, this would not resolve the problems of low
profitability. “Over 25 percent of banks in advanced economies (about $11.7
trillion in assets) would remain weak and face significant structural
challenges,” with the problems concentrated in the European and Japanese
banking sector.
“In the euro area,” the report stated, “excessive nonperforming
loans and structural drags on profitability require urgent and comprehensive
action.” Reducing nonperforming loans and addressing deficiencies in capital
were a priority.
The mounting financial problems, while concentrated in the
advanced economies, are not confined to them. The report found that in emerging
market economies, around 11 percent of corporate debt, over $400 billion, was
held by firms with “weak repayment capacity.”
High debt levels and excess capacity made it difficult for these
companies to “grow out of the problem” which left them “sensitive to downside
external or domestic developments,” and if interest rates started to rise and
earnings fell, “such a scenario would exhaust bank capital buffers in some
emerging markets.”
Another area of concern was China, where “continued rapid credit
growth… and expanding shadow banking products pose mounting risks to financial
stability.” The rapidly growing financial system “is becoming increasingly
leveraged and interconnected, and a variety of innovative vehicles and products
are adding to the complexity.” Corporate debt at risk remained high and
“underlying risks from non-loan credit exposures add to these challenges.”
The three reports point to the deepening contradictions of the
global capitalist system. The IMF has insisted that in the absence of any
cyclical rise of the economy, monetary policy alone cannot bring about a
recovery, and government infrastructure and other spending is necessary to provide
a boost.
But such spending would increase debt and would depend on interest
rates remaining low. Ultra-low interest rates, however, are increasingly
undermining the stability of banks and other financial institutions, creating
the conditions for another financial crisis, which will further inflame the
already high level of geo-political and economic conflict.
THE
CLINTON MAFIA:
IN
THE IMAGE OF THE “HOPE & CHANGE” HUCKSTER BARACK OBAMA, REDEFINING POL
CORRUPTION!
When asked to compare Hillary
Clinton to Donald Trump, D'Souza said no contest. "She is basically
Obama plus gangsterism. The Clintons are like Bonnie and Clyde.
Their goal is to steal America.
AMERICA’S FINAL DAYS: The Global Looting of Bill & Hillary
Clinton – unconvicted.
When asked to compare Hillary Clinton to Donald Trump, D'Souza
said no contest. "She is basically Obama plus gangsterism. The
Clintons are like Bonnie and Clyde. Their goal is to steal America.
In Hillary's America, D'Souza
documents how Democrats transitioned from pro-slavery to pro-enslavement; the
longstanding Democratic political war against women; how Hillary Clinton's
political mentor was, literally, a cold-blooded gangster, Saul Alinsky; how the
Clintons and other Democrats see foreign policy not in terms of national
interest, but in terms of personal profit; and how Democratic-controlled cities
have turned into hotbeds of crime and corruption. American Thinker
interviewed him about his latest projects
OBAMA-CLINTONOMICS:
You were wondering how many jobs went to illegals and how well Obama’s crony
banksters have done???
The sputtering economic recovering under President Obama, the last
to follow a major recession, has fallen way short of the average recovery and
ranks as the worst since the 1930s Great Depression, according to a new report.
Had the recovery under Obama been the average of the 11 since the
Depression, according to the report, family incomes would be $17,000 higher,
six million fewer Americans would be in poverty, and there would be six million
more jobs.
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