Russia’s central bank says a new financial crisis on the scale of the 2008 collapse could happen in less than 18 months if global inflation is not kept in check.
“A surge in public and private sector debt levels during the recovery from the pandemic could cause the global economy to “deteriorate drastically and rapidly” if the US Federal Reserve has to jack up interest rates to quell inflation, the Bank of Russia warned in its annual monetary policy forecast…
“Several large emerging markets have raised interest rates aggressively this year in an attempt to keep rising inflation under control.”
Stagflation Has Arrived [in the US]… Recent data in the inflation and economic surprise indexes indicate that stagflation has arrived.
“With growth trending lower and inflation higher with an increased debt burden and rates near zero, I believe it is secular… “
“My instinct is that without incessant stimulus, prices of all capital goods would collapse.”
Jobs slowdown makes Fed September taper statement unlikely…
“A sharp slowdown in US jobs growth precludes the possibility that the Federal Reserve will announce plans this month to begin scaling back its pandemic-era stimulus, economists say, as the spread of the Delta coronavirus variant muddies the economic outlook.”
‘Silent crisis’ looms as US to end Covid aid for millions of jobless…
“The government-funded programs that increased weekly payments and gave aid to the long-term unemployed and freelancers were credited with keeping the United States from an even worse economic collapse last year.”
The “perfect storm” of problems scuppering UK supply chains will increase prices sharply for households across the country, road haulage and food bosses have warned.
“A paucity of HGV drivers, soaring shipping costs, delays in deliveries from Asia and ongoing Covid related problems have compounded to produce severe shortages of products.”
UK energy bills may rise due to global gas supply crunch.
“The surging price of natural gas could send UK energy bills soaring and force energy-intensive industries to limit production or close down factories altogether.”
Former Italian Prime Minister Mario Monti told CNBC Saturday that he believes the greatest threat to Europe’s economic recovery from the coronavirus pandemic is “stagflation.”
“Monti, now the president of Italy’s Bocconi University, said the “huge mass” of accommodative monetary policy by central banks and fiscal stimulus from governments… “may well fire more inflation.””
ECB Tightening Too Soon Risks ‘Big Mistake,’ EU’s Gentiloni Says…
“With the virus pandemic far from over, policy makers in the euro area and the U.S. are weighing inflation risks against the need to sustain the economic recovery. The ECB is due to make its next policy decision on Thursday.”
Australia must diversify its economy to rely less on China, its largest trading partner, Treasurer Josh Frydenberg said on Monday, as he warned businesses to brace for new tensions with Beijing…
“Australia’s A$2 trillion economy is at risk of entering its second recession in as many years as its largest states are in prolonged Covid-19 lockdowns.”
China’s Slowdown Is Just as Important as the U.S. Jobs Shocker…
“If you can tear yourself away from the disappointing U.S. jobs numbers and what that means for the Federal Reserve’s prospective reduction in stimulus, signals from China offer an equally sobering view of the global recovery.”
China’s souring developer loans raise fear of financial contagion…
“Nonperforming loans to the real estate sector, which has for years been the backbone of growth for the world’s second-largest economy, surged 30% across the five largest banks to 97 billion yuan ($15 billion) in the first six months of the year, according to filings. A similar story is playing out at smaller banks.”
Fear of stagflation increases significantly in Brazil.
“The Central Bank has been revising upward estimates for inflation this year for more than 20 consecutive weeks. While the consensus at the beginning of the year for IPCA was 3.32% in 2021, today, the consensus is 7.27%.”
Latin American countries are worried about inflation: Chile’s central bank became the latest in Latin America to hike interest rates this week, startling markets with a decision to double its overnight rate…
“Mexico, Brazil and Peru have all raised rates in the last few months. And Colombia’s central bankers have also hinted that they may need to begin a tightening policy.
Turkish inflation jumps above policy rate to 19.25%.
“Turkish annual inflation jumped more than expected to 19.25% in August, above the central bank’s policy rate and its highest level in more than two years, according to data released on Friday, maintaining pressure for tight monetary policy.”
ISIS militants kill at least 16 security personnel in northern Iraq…
“The attacks raise questions about the ability of Iraqi forces to maintain security beyond the planned withdrawal of US troops from Iraq by the end of this year [Sounds familiar]. The US has 2,500 troops among the 3,500 members of the international anti-ISIS coalition in Iraq.”
Concerns grow in Libya as armed clashes break out in Tripoli…
“Conflict in Tripoli between the armed groups who vie to control both territory and state institutions would further undermine the prospect of December elections as part of a plan to end a decade of chaos, violence and division.”
Aluminum climbed to the highest in more than a decade as political unrest in Guinea fueled concerns over supply of the raw material needed to make the metal.
“A unit of the military seized power and suspended the constitution, with head of special forces, Colonel Mamady Doumbouya, urging the army to back him.”
Nigeria has fallen from grace; most terrorised nation, poverty capital of the world — Mailafia.
“Former Deputy Governor of Central Bank of Nigeria(CBN), Dr Obadaiah Mailafia has lamented that the country has fallen from grace by being the most terrorised nation and the poverty capital of the world after India and Afghanistan.”
The high cost of living and continued disruption from the Covid-19 pandemic are eroding the incomes of many Kenyans and pushing more households into poverty.
“This is according to the latest survey by research firm GeoPoll that paints a grim picture of the financial hardships majority of Kenyans are experiencing.”
Ethiopia’s Tigray conflict: Thousands reported killed in clashes.
“The rebel forces said on Sunday that they had killed 3,073 “enemy forces”, with 4,473 injured. It comes after the military said it had killed more than 5,600 rebels, without specifying a timeframe… It is hard to verify figures from either side due to a communications blackout in the region.”
Rats, drought and labour shortages eat into global edible oils recovery. The FAO’s global edible oils index is up 91% since last June, and is expected to climb further…
“…producers have been battling a range of impediments, including labour shortages, heatwaves and vermin infestation….“
“…driving collective stocks of the world’s most consumed edible oils – palm, soybean, canola (rapeseed) and sunflowerseed – to their lowest levels in a decade.”
2021 climate disasters foreshadow future challenges for public health.
“Around the world, extreme droughts and heat will push millions toward starvation. Forest fires and rising sea levels will displace entire populations, putting them at higher risk of trauma, infection and food insecurity. Disease-carrying insects will expand their reach. These are not hypothetical risks…”
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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