World risks collapse of everything: climate shocks such as record high temperatures and a “new normal” of wildfires, floods and droughts, are not only damaging the natural environment, said UN chief António Guterres, but also threatening political, economic and social stability. “
““The science is clear: we need to limit the global temperature increase to 1.5 degrees by the end of the century,” the Secretary-General said.”
Federal Reserve Chair Jerome Powell, pushing back on suggestions that loose monetary policy risked unleashing inflation and financial risks in what may be an emerging economic boom, said the central bank would keep its attention focused on getting Americans back to work as a vaccine-related recovery proceeds…“
“…Powell did not talk about the risks of rising bond yields or a possible spike in inflation, but of the roughly 10 million jobs still missing compared to a year ago, and the need for the U.S. central bank’s policy to stay wide open until that is fixed.”
US Consumer Demand Snaps Back. Factories Can’t Keep Up:“
“Without restaurants to visit and trips to take, Americans bought out stocks of cars, appliances, furniture and power tools. Manufacturers have been trying to catch up ever since. Nearly a year since initial coronavirus lockdowns in the U.S., barbells, kitchen mixers, mattresses and webcams are still hard to find.
“A global shortage of semiconductors has forced many car makers to cut production in recent weeks.”
European producers are passing increased enter prices on to their prospects, sending eurozone inflation to its highest level for nearly a year as shortages of supplies and hovering delivery prices disrupt supply chains.“
“Efforts to cushion rising prices are pushed by the sentiment that supply chain bottlenecks are unlikely to ease within the brief time period, based on business and delivery executives. More costly manufactured goods are in turn fuelling expectations of an extra surge in inflation, which Germany’s central financial institution is already warning will attain its highest degree since the 2008 monetary disaster by the end of this year.”
Thousands of European manufacturers have been hit by a surge in the price of polymer resins used to make plastic, which has risen to six-year highs because of strong demand and a slump in supplies.“
“If prices remain elevated, extra costs may be passed to supermarkets, other retailers and consumers as margins of companies that convert plastic resins into a variety of household and industrial products suffer.”
UK Car-makers are “paddling furiously below the water” to maintain their supply chains, an industry leader has warned.“
“Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, told MPs that the movement of parts has been “difficult” since the end of the Brexit transition period.”
China will put greater pressure on its regions to boost grain yields and step up support for its domestic seed industry as it strengthens its focus on food security after the COVID-19 pandemic [and last year’s floods, I’m sure], a key policy document issued late on Sunday showed.“
“The annual rural policy blueprint, known as the “No 1 document”, placed greater emphasis on food security than in prior years, calling for all provinces to improve grain yields during the 2021-2025 period.”
The leaders of the OPEC+ alliance, Saudi Arabia and Russia, are reportedly once again at odds over oil supply management ahead of another crucial meeting of the group next week.“
“OPEC’s top producer and de facto leader Saudi Arabia would likely prefer the March 3-4 meetings to decide that the OPEC+ coalition holds production flat in April… However, the key Saudi partner in the deal, Russia, will likely be pushing for further easing of the production cuts.”
High global oil prices may trigger Pakistan’s economic crisis: “
“As international oil prices rise rapidly, Pakistan needs to gear up to face the economic challenges that it would trigger. This spike in the global oil prices is likely to result in a surge in inflation, a high import bill and an enlarged fiscal deficit.”
The World Bank threatened Tuesday to suspend financing for coronavirus vaccines in Lebanon as it investigated suspected favoritism amid accusations that lawmakers were inoculated in parliament without prior approval.“
“A top Lebanese official supervising the vaccine rollout called it “outrageous” and threatened to step down amid an outcry on social media by Lebanese deeply mistrustful of their notoriously corrupt politicians.”
Lebanon’s cash for power generation may run out at the end of March: Lebanon, which is grappling with a deep financial crisis triggered by a mountain of debt, already lacks power generation capacity, so homes and businesses face power cuts for several hours each day…“
““We are headed towards a difficult situation, if there is no fuel there will be no electricity,” Raymond Ghajar told Reuters.”
Commodities Hit Highest Since 2013 Amid Inflation Concern: Commodities rose to their highest in almost eight years amid booming investor appetite for everything from oil to corn.“
“Hedge funds have piled into what’s become the biggest bullish wager on the asset class in at least a decade, a collective bet that government stimulus plus near-zero interest rates will fuel demand, generate inflation and further weaken the U.S. dollar as the economy rebounds from the pandemic.”
we humans, and hence the tinkerers in DC, have fallen in love with overspending, fiat currency printing, and zero interest rates. We are about to unleash the largest stimulus in history into the strongest recovery in history [this is the sharpest snapback, rather than the strongest recovery in history IMO but the point stands]. “…
“What could possibly go wrong Dr. Frankenstein?“
The US economy is literally on perpetual life support. Recent events show too clearly that unless fiscal and monetary stimulus continues, the economy will fail and, by extension, the stock market.“
“However, the Fed currently has no choice. Such is the consequence, and problem, of getting caught in a “liquidity trap.”
“What the average person fails to understand is that the next “financial crisis” will not just be a stock market crash, a housing bust, or a collapse in bond prices.
“It could be the simultaneous implosion of all three.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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