“Here are four reasons the West is headed for a ‘very drastic crisis,’ according to a veteran economist… Patrick Artus, a senior economics adviser at French bank Natixis and a professor at the Paris School of Economics… says a crisis is “inevitable.”
“[Sovereign] “Borrower solvency cannot be ensured if debt-to-income ratios increase continuously,” he says…
“The money supply also is at records. “The money supply cannot be increased continuously relative to income, as soon or later demand for money, which is linked to savings and income, can no longer increase,” said Artus…
““Rising relative asset prices cannot be extrapolated: If they become too high, the savings of asset buyers will no longer suffice to buy then, leading inevitably to a downward correction in prices,” he says…”
“America stockpiles: Supermarkets buy up to 25% more supplies as they predict inflation will soar and cost of essentials like bacon and milk rising by up to 14%…
“At SpartanNash in Michigan, the retailer has bought up around 20 to 25 percent more than normal including frozen meat.”
“The UK’s leading banks are bolstering their debt collection teams as the first repayments of emergency Covid loans fall due.
“Britain’s four largest banks have hired over 750 workers in their debt collection units in an effort to manage a wave of potential defaults.”
https://www.cityam.com/uk-banks-bolster-debt-collection-teams-ahead-of-first-covid-loan-repayments/
“Japanese shares fall as Tokyo declares state of emergency ahead of Olympics…
“Japanese shares fell on Thursday, as the country’s plan to reintroduce a state of emergency to contain a resurgence of COVID-19 infections stoked worries about an economic slowdown.”
“China Hints at Reserve Ratio Cut to Help Bolster Economy.
“China’s State Council signaled the central bank could make more liquidity available to banks in order to boost lending to businesses, including by cutting the amount of money they have to keep in reserve. Bond yields fell.”
“China’s central bank is ‘quite worried’ about global risks from some digital currencies.
“China’s central bank is “quite worried” about risks to the global financial system from privately developed digital currencies, particularly so-called global stablecoins.”
“A serious crisis may be looming as an increasing number of Nigerian youths take to the wide-swing digital currency investment, notwithstanding a financial regulatory restriction the Central Bank of Nigeria (CBN) imposed in February…
“Nigeria sits on the top sub-Saharan African market in terms of growth and volume of investment. Its investment in LocalBitcoins and Paxful in the past year alone stands toweringly at $398.5 million.”
https://guardian.ng/news/nigeria/national/despite-crash-crypto-surge-threatens-financial-system/
“Ghana opposition supporters march against killings, lawlessness.
“Hundreds of opposition supporters marched through the streets of Ghana’s capital Accra demonstrating against what they described as rising insecurity and lawlessness since President Nana Akufo-Addo came to power in 2017.”
“The Army in Swaziland (eSwatini) has taken full charge after mass prodemocracy protests left many people dead, according to a Human Rights Watch official.
“Dewa Mavhinga, director for Southern Africa, added reports received by the organisation were that the Army were on a ‘killing spree’.”
https://allafrica.com/stories/202107060687.html
“Suspects killed and arrested after Haitian president assassinated.
“Police in Haiti said they shot dead four people they suspected of assassinating president Jovenel Moïse and arrested two others after a day of firefights and heightened tension in Port-au-Prince.”
https://www.ft.com/content/781475e8-caf6-45a2-960c-102efefc27eb
“‘I just need my son’: the people who disappeared amid Colombia’s protests.
“Since protesters first took to the streets of Colombia’s cities in late April, hundreds of people have been reported missing… The disappearances have evoked memories of some of the darkest days of the country’s civil war…”
https://www.theguardian.com/global-development/2021/jul/07/colombia-protests-missing-people
“World Food Programme starts distributing food in crisis-hit Venezuela.
“The U.N. World Food Programme (WFP) said on Wednesday it had begun distributing school meals to children in Venezuela, where some 7 million people require humanitarian assistance after years of economic collapse in the once-prosperous OPEC nation.”
“Myanmar turmoil deepens as clashes spread…
“Five months after the military ousted elected civilian leader Aung San Suu Kyi, Depayin’s descent into bloodshed echoed that in other towns where conflicts have flared anew in a country that already had some two dozen ethnic armed groups.”
https://www.reuters.com/world/asia-pacific/myanmar-turmoil-deepens-clashes-spread-2021-07-07/
“Lebanon caretaker premier pleads for aid as crisis worsens.
“Lebanon’s caretaker prime minister is appealing to the international community to save his country from “death and demise” as multiple crises push it dangerously close to total collapse.”
“Iranians chant ‘Death to Khamenei’ during mass protests over power blackouts blamed on heatwave and cryptocurrency mining farms…
“Outgoing president Hassan Rouhani apologised to Iranians on Tuesday over the massive power outages which have come amid a heatwave, with temperatures reaching 50 degrees celsius.”
“Basra protests erupt as power cuts hit scorching Iraq.
“Fears of violent demonstrations across Iraq’s southern cities rise as cuts deprive thousands of power to run hospitals, businesses and homes.”
“What will life be like after Covid-19? History does not paint a pretty post-pandemic picture… History shows that social unrest follows pandemics… [unfortunately a lot of social unrest also *preceded* this one.]
“This is according to Schroders Asset Management, which on Wednesday hosted a webinar on the long-term impact of Covid-19.”
“‘It’s like Whack-a-Mole’: tractors and trucks chief bemoans supply shortages…
“Manufacturers had to spend more money to source materials last month, with the Institute for Supply Management’s prices paid index, which tracks what manufacturers pay for inputs, jumping to 92.1 in June compared with 88.0 in May, its highest level since the 1970s.”
https://www.ft.com/content/eb9c2e10-760b-4379-8fe0-d1144295c39a
“Chip crisis deepens with Daimler, Jaguar warning of lost sales.
“Daimler AG and Jaguar Land Rover became the latest carmakers to warn of crimped sales as a result of the global semiconductor shortage, with the latter flagging deliveries in the second quarter will be 50 per cent worse than initially thought.”
https://www.bnnbloomberg.ca/global-chip-crisis-worsens-with-jaguar-warning-50-sales-slump-1.1625719
“Covid-19 has destroyed 22 million jobs in advanced countries, says OECD… Job retention schemes have saved some 21 million jobs, but rich countries face the threat of rising long-term unemployment rates.” [Can’t imagine that will help the unrest situation.]
“Credit Markets May Not Be So Forgiving Post-Pandemic…
“Rock-bottom interest rates, a reopening economy and yield-starved investors mean all but the most-troubled businesses have managed to borrow their way out of trouble. Credit markets may not be so friendly if the projections underlying that borrowing prove too rosy once post-Covid results come out…”
“Is the IMF repeating its mistakes from the global financial crisis?
“…as the Federal Reserve continues to inflate a global “everything” asset and credit market bubble, the IMF risks repeating its 2008 error. By so doing, it is failing to fulfil its mandate of promoting global economic prosperity.”
“Central banks must change course to avoid possible financial crisis… [good luck with that – do you prefer a rock or a hard place?]
“Monetary policy was already at an impasse before Covid-19 struck. The system had been swamped with liquidity through the highly accommodative monetary stance of the past decade. This has pushed global debt to 355% of world gross domestic product, a record for peace time.
“Huge leverage has weakened the financial system and endangered stability.”
https://www.omfif.org/2021/07/central-banks-must-change-course-to-avoid-possible-financial-crisis/
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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