Bank of England chief issues warnings on global economy
Bank of England governor Mark Carney has given short shrift to the idea that the agreement between the US and China at the sidelines of the G20 summit last weekend to resume trade negotiations has lessened the dangers confronting the global economy.
Rather, in a major speech delivered on Tuesday, he warned of a “sea change,” defined as a “profound transformation,” in the global economy with “worrying” portents.
In 2017 the global economy was experiencing its fastest rate of growth since the global financial crisis of 2008. Moreover, there were indications that the world’s central banks were looking to return to a more “normal” monetary policy as they cut back on financial stimulus measures. That has gone by the board.
Carney noted that “in recent months, the expected paths of interest rates in advanced economies have shifted sharply lower, most notably in the US, where an expectation of two further rate hikes over the next three years has flipped to four rate cuts by the end of next year.” In the euro area, markets had begun to price in further rate cuts and more asset purchases by the European Central Bank.
The interest rate outlook is having a major impact on bond markets, with yields on long-term government bonds falling markedly as their prices rises. The price of bonds and their yield have an inverse relationship.
Carney pointed out that yields on 10-year US treasury bonds were at their lowest point in two and a half years. Yields on the UK equivalent were at their lowest level since the Brexit referendum in 2016 and German 10-year bond yields were at their lowest level ever. All told there is now $13 trillion worth of investment grade debt trading at negative yields—a record. A negative yield means that a purchaser of such a financial asset would make a loss if they held it to maturity.
At the same time, low interest rates had provided “substantial support for equity markets,” which had now reached all-time highs in the US, “despite an economic outlook that is becoming less robust and more uncertain.”
“These market developments reflect a sea change driven by growing concerns over the impact of rising trade tensions and policy uncertainty. Certainly the portents are worrying,” Carney said.
The rising price of financial assets—government bonds and shares—is a kind of fever chart of the growing problems in the underlying real economy.
“Over the past year,” Carney noted, “the global economy has shifted from a robust broad-based expansion to a widespread slowdown, with the proportion of the global economy growing above trend falling from four fifths to one sixth.”
Trade tensions have considerably increased with Trump escalating punitive measures against China at the beginning of May. He has also threatened action against Mexico unless it falls into line with US demands to clamp down on the movement of immigrants and refugees. Meanwhile, the threat by the US to impose tariffs on auto imports from Europe remains.
Carney said the latest actions mean that “trade tensions could be far more pervasive, persistent and damaging than previously expected” and that the rationales for further action were broadening.
“Initially motivated by concerns over bilateral trade imbalances, trade measures are now being taken in response to issues ranging from immigration to intellectual property protection to control of the technologies underpinning the Fourth Industrial Revolution. It has even become fashionable for some to speak of a new Cold War.”
However, this “new Cold War” takes place under very different conditions than of the 20th century, as the escalation of the trade war comes into ever-sharper conflict with the increasingly integrated character of the global economy.
At the height of the Cold War, Carney pointed out, US-USSR trade was worth $2 billion a year while today “US-China trade clocks $2 billion a day.”
“More broadly trade in intermediate goods and services has doubled since the fall of the Berlin Wall, and production has become increasingly integrated across borders.”
While Carney did not elaborate on this issue, the increasing role of intermediate goods means that the trade conflicts of the present day have a far more explosive content than those of the 1930s. In that period, tariffs were imposed largely on finished goods. Today they are being imposed on goods that form part of a global production system in which the components of any product often cross borders numbers of times before they emerge in finished form.
“Reflecting the more febrile atmosphere, a trade war has shot to the top of the risks most worrying investors and measures of global policy uncertainty have reached record highs,” he said.
These concerns are contributing to sharp reductions in corporate earnings expectations with business confidence across the G7 group of countries—the world’s largest economies excluding China—falling to its lowest level in five years and “sentiment among manufacturers particularly weak.”
The more hostile and uncertain trade environment “is coinciding with sharp slowdowns in global trade, manufacturing, industrial production and capital goods orders,” leading to a deterioration in the quality of global growth.
“Across the G7, the growth rate of business investment has almost halved since its peak in late 2017, leaving the global expansion more reliant on consumer spending and reducing its resilience,” Carney noted.
However, while corporate earnings expectations are on a downward path, “for the time being,” the falls in expected interest rates set by central banks “have cushioned the impact on equity prices.”
These comments point to one of the key features of the global economy—the ever-increasing dependence of major corporations on a rise in their share prices resulting from the cuts in interest rates that continually “juice” the markets.
This phenomenon was on display yesterday when Wall Street’s Dow Jones index reached an all-time record high, joining the two other major indexes, the Nasdaq and the S&P 500, in hitting record levels.
The rise and rise of the market is completely dependent on the expectation that the US Federal Reserve will cut interest rates, possibly as soon as its next meeting at the end of the month, followed by further rate cuts before the end of the year.
Reporting on the new record, the Wall Street Journal cited the comments of Jim Baird, chief investment officer at Plante Moran Financial Advisors. He said if the data on the economy was such that the Fed decided it did not need to move “aggressively” then “investors will likely be disappointed” and “any hint that the Fed may not cut rates will be a catalyst for more volatility.”
In other words, any notion of Fed independence has gone out the window. The US central bank operates with the gun at its head to ensure there is no impediment to the accumulation of wealth by parasitic speculation on the financial markets.
U.S. Merchandise Trade Deficit Hits 11-Year High Through May; $137.1 Billion With China Alone
(CNSNews.com) - The merchandise trade deficit hit an 11-year high of $359,579,800,000 for the first five months of 2019, according to data released today by the Census Bureau.
The merchandise trade deficit for the month of May alone also hit an 11-year high of $75,048,600,000.
So far this year, the U.S. has run a $137.1 billion merchandise trade deficit with China alone.
The last time the trade deficit was higher for the month of May and through the first five months of the year was in 2008, when the deficit was $86,225,000,000 in the month of May (in constant May 2019 dollars) and the deficit for January through May was $422,544,940,000 (in constant May 2019 dollars).
China was by far the largest contributor to the U.S. merchandise trade deficit both in the month of May and so far in 2019. In May, the U.S. ran a merchandise trade deficit with China of $30.2 billion. The next largest trade deficit for the month was with Mexico, but that was only $9.2 billion. Germany was third at $5.9 billion, Japan was fourth with $5.3 billion and Ireland was fifth with $5.1 billion.
In the five-month period from January through May, the U.S. ran a merchandise trade deficit of $137.1 billion with China. Mexico was second at $40.5 billion; Japan was third with $30.1 billion; Germany was fourth with $27.1 billion; and Vietnam was fifth with 21.6 billion.
[This is the Census Bureau's ranking of the 15 countries that ran the highest merchandise trade deficits with the United States from January throug June. The values of those deficit are shown in billions of dollars.]
(Values for historical trade numbers were adjusted to constant May 2019 dollars using the Bureau of Labor Statistics inflation calculator.)
AMERICA: THE RICH GET MUCH RICHER AND THE MIDDLE CLASS GETS
BLUDGEONED…. Illegals get the jobs!
*
“Today’s society benefits those who shaped it, and it has been shaped
not by working men and women, but by the new aristocratic elite. Big banks, big tech, big multi-national corporations,
along with their allies in the academy and the media—these are the aristocrats
of our age.
They live in the United States, but they
consider themselves citizens of the world” Sen. Josh
Hawley
"But
what the Clintons do is criminal because they do it wholly at the expense of
the American people. And they feel thoroughly entitled to do it: gain power,
use it to enrich themselves and their friends. They are amoral, immoral, and
venal. Hillary has no core beliefs beyond power and money. That should be clear
to every person on the planet by now." ---- Patricia McCarthy
- AMERICANTHINKER.com
"The tax overhaul would mean an unprecedented windfall for
the super-rich, on top of the fact
that virtually all income gains during the period of the supposed
recovery from the financial crash of 2008 have gone to the top 1 percent
income bracket."
*
Millionaires projected to own 46
percent of global private wealth by 2019
While the wealth of the rich is growing at a
breakneck pace, there is a stratification of growth within the super wealthy,
skewed towards the very top.
By Gabriel Black
Despite a booming economy, many U.S. households are still just
holding on
https://mexicanoccupation.blogspot.com/2019/05/the-recovery-that-never-happened-except.html
"One of the
premier institutions of big business, JP Morgan Chase, issued
an internal report on the eve of the 10th anniversary of the 2008
crash, which warned that another “great liquidity crisis”
was possible, and that a government bailout on the scale of that
effected by Bush and Obama will produce social unrest, “in light of
the potential impact of central bank actions in driving
inequality between asset owners and labor."
Jim Carrey: America ‘Doomed’ If We Don’t Regulate Capitalism"
The American phenomenon of record stock values fueling an ever greater concentration of wealth at the very top of society, while the economy is starved of productive investment, the social infrastructure crumbles, and working class living standards are driven down by entrenched unemployment, wage-cutting and government austerity policies, is part of a broader global process."
OBAMA: SERVANT OF THE 1%
Richest one percent controls
nearly half of global wealth
The declining living standards of the working class are
feeding directly into the retail apocalypse and mass layoffs of retail workers
will only exacerbate the issue. Workers’ wages have seen little to no growth in
the last four decades, and any economic growth experienced since 2008 has gone
to the wealthiest of the wealthy.
Wealth
concentration increases in US.
AMERICA: THE RICH GET MUCH RICHER AND THE MIDDLE CLASS GETS
BLUDGEONED…. Illegals get the jobs!
*
Why do the
billionaire class all want wider open borders and hordes more “cheap” labor
illegals? It’s all about keeping wages depressed for greater profits!
*
“Today’s society benefits those who shaped it, and it has been shaped
not by working men and women, but by the new aristocratic elite. Big banks, big tech, big multi-national corporations,
along with their allies in the academy and the media—these are the aristocrats
of our age.
They live in the United States, but they
consider themselves citizens of the world” Sen. Josh
Hawley
*
*
"This is how they will destroy
America from within. The leftist billionaires who
orchestrate these plans are wealthy. Those tasked with representing
us in Congress will never be exposed to the cost of the invasion of
millions of migrants. They have nothing but contempt
for those of us who must endure the consequences of
our communities being intruded upon by gang members, drug
dealers and human
traffickers. These people have no intention
of becoming Americans; like the Democrats who welcome them, they have
contempt for us." PATRICIA McCARTHY
“Behind the ostensible government sits enthroned
an invisible government owing no allegiance and acknowledging no responsibility
to the people. To destroy this invisible government, to befoul the unholy
alliance between corrupt business and corrupt politics is the first task of the
statesmanship of today.” THEODORE ROOSEVELT
*
"But
what the Clintons do is criminal because they do it wholly at the expense of
the American people. And they feel thoroughly entitled to do it: gain power,
use it to enrich themselves and their friends. They are amoral, immoral, and
venal. Hillary has no core beliefs beyond power and money. That should be clear
to every person on the planet by now." ---- Patricia McCarthy
- AMERICANTHINKER.com
*
“The couple parlayed lives supposedly spent in
“public service”
into admission into the upper stratosphere of American wealth, with incomes in the top 0.1 percent bracket. The source of this vast wealth was a political machine that might well be dubbed “Clinton, Inc.” This consists essentially of a seedy money-laundering operation to ensure big business support for the Clintons’ political ambitions as well as their personal fortunes."
into admission into the upper stratosphere of American wealth, with incomes in the top 0.1 percent bracket. The source of this vast wealth was a political machine that might well be dubbed “Clinton, Inc.” This consists essentially of a seedy money-laundering operation to ensure big business support for the Clintons’ political ambitions as well as their personal fortunes."
*
"The tax overhaul would mean an unprecedented windfall for
the super-rich, on top of the fact
that virtually all income gains during the period of the supposed
recovery from the financial crash of 2008 have gone to the top 1 percent
income bracket."
*
Graph from the Economic Policy Institute
Decades of decaying capitalism have led to this accelerating
divide. While the rich accumulate wealth with no restriction, workers’ wages
and benefits have been under increasing attack. In 1979, 90 percent of the
population took in 70 percent of the nation’s income. But, by 2017, that fell
to only 61 percent.
*
Millionaires projected to own 46
percent of global private wealth by 2019
While the wealth of the rich is growing at a
breakneck pace, there is a stratification of growth within the super wealthy,
skewed towards the very top.
At the
end of 2014, millionaire households owned about 41 percent of global private wealth,
according to BCG. This means that collectively these 17 million households
owned roughly $67.24 trillion in liquid assets, or about $4 million per
household.
By Gabriel Black
*
The massive increase in the value of
the stock market, which only a small segment of the population
participates in, means that the top 10 percent of the population controls
73 percent of all wealth in the United States. Just three
men—Jeff Bezos, Warren Buffet and Bill Gates—had more wealth than the
bottom half of America combined last year.
America
Created Just 20,000 Jobs in February...and those all went to foreign
born!
Exclusive–Mo Brooks:
‘Masters of the Universe’ Want More Immigration to ‘Decrease Incomes of
Americans’
*
Consequently,
the pumping of ultra-cheap money into the financial system,
fueling speculation and parasitism, together with ever-widening
social inequality, is not a temporary measure but must be made permanent.
*
The
declining living standards of the working class are feeding directly into
the retail apocalypse and mass layoffs of retail workers will
only exacerbate the issue.
Workers’ wages have seen little to no
growth in the last four decades, and any economic growth experienced
since 2008 has gone to
*
“US household net worth sees biggest fall since crisis”
*
“Trump Touts Legal Immigration System for
‘Our Corporations’ at Expense of
American Workers “– JOHN BINDER
Trump’s shift from a
wage-boosting legal immigration system to one that benefits corporations and
their shareholders coincides with recent big business lobby influence over his
White House, at the behest of advisers Jared Kushner and Brooke Rollins.
*
“Trump Abandons ‘America First’ Reforms: ‘We
Need’ More Immigration to Grow Business Profits” JOHN BINDER
*
Additionally, Koch spokespeople at the donors’ conference said the
network has its sights set on pushing amnesty for millions of illegal aliens
this year.
Despite a booming economy, many U.S. households are still just
holding on
https://mexicanoccupation.blogspot.com/2019/05/the-recovery-that-never-happened-except.html
"One of the
premier institutions of big business, JP Morgan Chase, issued
an internal report on the eve of the 10th anniversary of the 2008
crash, which warned that another “great liquidity crisis”
was possible, and that a government bailout on the scale of that
effected by Bush and Obama will produce social unrest, “in light of
the potential impact of central bank actions in driving
inequality between asset owners and labor."
“Our entire crony capitalist system, Democrat and Republican
alike, has become a kleptocracy approaching par with third-world
hell-holes. This is the way a great country is raided by its elite.”
---- Karen McQuillan THEAMERICAN THINKER.com
“Behind
the ostensible government sits enthroned an invisible government owing no
allegiance and acknowledging no responsibility to the people. To destroy this
invisible government, to befoul the unholy alliance between corrupt business
and corrupt politics is the first task of the statesmanship of today.” THEODORE
ROOSEVELT
Jim Carrey: America ‘Doomed’ If We Don’t Regulate Capitalism"
The American phenomenon of record stock values fueling an ever greater concentration of wealth at the very top of society, while the economy is starved of productive investment, the social infrastructure crumbles, and working class living standards are driven down by entrenched unemployment, wage-cutting and government austerity policies, is part of a broader global process."
The father
of US Treasury Secretary Steven Mnuchin just completed the most
expensive purchase of a living artist’s work in US history, spending
over $91 million on a three-foot-tall metallic sculpture. Ken Griffin,
the founder of hedge fund Citadel, recently dropped $238 million on a
penthouse in New York City, the most expensive US home ever purchased.
And Amazon’s Jeff Bezos, the world’s richest man, has invested $42
million in a 10,000-year clock.
Decades of
decaying capitalism have led to this accelerating divide. While the rich
accumulate wealth with no restriction, workers’ wages and benefits have been
under increasing attack. In 1979, 90 percent of the population took in 70
percent of the nation’s income. But, by 2017, that fell to only 61 percent.
"This is
how they will destroy America from within. The leftist
billionaires who orchestrate these plans are wealthy. Those tasked
with representing us in Congress will never be exposed to the
cost of the invasion of millions of migrants. They have nothing
but contempt for those of us who must endure the consequences of our
communities being intruded upon by gang members, drug dealers and
human traffickers. These people have no intention
of becoming Americans; like the Democrats who welcome them, they have
contempt for us." PATRICIA McCARTHY
In 2014
the Russell Sage Foundation found that between 2003 and 2013, the median
household net worth of those in the United States fell from $87,992 to
$56,335—a drop of 36 percent. While the rich also saw their wealth drop during
the recession, they are more than making that money back.
Between
2009 and 2012, 95 percent of all the income gains in the US went to the top 1
percent. This is the most distorted post-recession income gain on record.
OBAMA: SERVANT OF THE 1%
Richest one percent controls
nearly half of global wealth
The richest one percent of the world’s population now controls
48.2 percent of global wealth, up from 46 percent last year.
The report found that the growth of global inequality has accelerated
sharply since the 2008 financial crisis, as the values of financial assets have
soared while wages have stagnated and declined.
THE WALL STREET BOUGHT AND OWNED DEMOCRAT PARTY
SERVING BANKSTERS, BILLIONAIRES and INVADING ILLEGALS
“Our entire crony capitalist system, Democrat and Republican
alike, has become a kleptocracy approaching par with third-world
hell-holes. This is the way a great country is raided by its elite.”
----Karen McQuillan AMERICAN THINKER
THE CRONY CLASS:
Income inequality grows FOUR TIMES FASTER under
Obama-Biden and their bankster regime than Bush.
“By the time of Bill Clinton’s election
in 1992, the Democratic Party had completely repudiated its association with
the reforms of the New Deal and Great Society periods. Clinton gutted welfare
programs to provide an ample supply of cheap labor for the rich (WHICH NOW
MEANS OPEN BORDERS AND NO E-VERIFY!), including a growing layer of black
capitalists, and passed the 1994 Federal Crime Bill, with its notorious “three
strikes” provision that has helped create the largest prison population in the
world.”
“Our entire crony capitalist system, Democrat and Republican
alike, has become a kleptocracy approaching par with third-world
hell-holes. This is the way a great country is raided by its elite.”
----Karen McQuillan AMERICAN THINKER
///
(THERE'S A REASON WHY GEORGE S OROS RUNS OBAMA'S BID FOR A
THIRD TERM FOR LIFE).
THE REAL ECONOMY:
US “retail apocalypse” expected to exceed annual high with more
than 1,100 store closures announced in one day.
*
*
The declining living standards of the working class are
feeding directly into the retail apocalypse and mass layoffs of retail workers
will only exacerbate the issue. Workers’ wages have seen little to no growth in
the last four decades, and any economic growth experienced since 2008 has gone
to the wealthiest of the wealthy.
Why do all global billionaires
want wider open borders, amnesty and no E-VERIFY?
AMERICA: THE ECONOMY IS RIGGED
BY COGRESS SO THE RICH BECOME SUPER RICH.
The American middle class gets the tax bills
for Wall Street’s crimes and bottomeless bailouts!
Wealth
concentration increases in US.
*
*
The latest research on wealth inequality by University of
California economics professor Gabriel Zucman underscores one of the key social
and economic trends since the global financial crisis of 2008. Those at the
very top of society, who benefited directly from the orgy of speculation that
led to the crash, have seen their wealth accumulate at an even faster rate,
while the mass of the population has suffered a major decline.
*
The past 40 years have seen the consolidation of a plutocratic
elite, which has subordinated every aspect of American society to a single
goal: amassing ever more colossal amounts of personal wealth. The top one
percent have captured all of the increase in national income
over the past two decades, and all of the increase in national
wealth since the 2008 crash.
*
“Our
entire crony capitalist system, Democrat and Republican alike, has become
a kleptocracy approaching par with third-world hell-holes. This
is the way a great country is raided by its elite.” ---- Karen
McQuillan AMERICAN THINKER
BILLIONAIRE BETO “BETOMATIC” O’ROURKE
PROCLAIMS AMNESTY FOR 40 MILLION INVADING “UNREGISTERED” DEMOCRAT VOTING
ILLEGALS.
No word on America’s homeless, housing or
jobs crisis for Legals!
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