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Tag Archives: Daniel Lacalle
The World Is Drowning In Debt
The World Is Drowning In Debt According to the IMF, global fiscal support in response to the crisis will be more than 9 trillion US dollars, approximately 12% of world GDP. This premature, clearly rushed, probably excessive, and often misguided chain of so-called stimulus plans will distort public finances in a way in which we have not […]
U.S. Depression? The V-Shaped Recovery Fades Away
U.S. Depression? The V-Shaped Recovery Fades Away The recent jobless claims figures show how difficult it will be for the U.S. recovery to be as quick and strong as initially expected. 7.7 million jobs were lost in Hospitality and Leisure in April, 2.5 million in Education and Health, with 2 million in Retail and another 2 million […]
Banks Will Not Bail Out The Economy
Banks Will Not Bail Out The Economy These days, we hear a lot that banks were the problem in the 2008 crisis and now they are the part of the solution. Banking was not the main problem of the 2008 crisis, but one of the symptoms that indicated a more serious disease, the excess risk taken by […]
Destroying the Economy is not a Social Policy
Destroying the Economy is not a Social Policy The economy is the heart of the social body. If we shut down the heart of an organism to safeguard the hands and brain, the body dies. The data on deaths and infected from the Covid-19 coronavirus epidemic is alarming. Let us remember the deceased, the infected […]
Despite Massive QE And Congress Bill, The US Dollar Shortage Intensifies
Despite Massive QE And Congress Bill, The US Dollar Shortage Intensifies How can the Fed launch an “unlimited” monetary stimulus with congress approving a $2 trillion package and the dollar index remain strong? The answer lies in the rising global dollar shortage, and should be a lesson for monetary alchemists around the world. The $2 […]
For An Effective Response To The Upcoming Crisis
For An Effective Response To The Upcoming Crisis Before analyzing the emergency plans that the global economy needs, we must remember that, as in the past, the prudence and responsibility of the civil society and businesses will help us to get out of this crisis. In the face of an unprecedented crisis, we have to be […]
Supply Chain Disruptions Impact on Global Growth
Supply Chain Disruptions Impact on Global Growth In a previous post, we mentioned that stagflation is a risk that central planners are ignoring. However, this risk is not just an isolated challenge focused on economies like Mexico, India or Argentina. Even in countries like Germany and Japan the trend of inflation, particularly in non-replicable goods, […]
Why Sweden Ended Its Negative Interest Rate Experiment
Why Sweden Ended Its Negative Interest Rate Experiment Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists, who start with a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save […]
Negative Rates, The Destruction Of Money. Sweden Ends Its Experiment.
Negative Rates, The Destruction Of Money. Sweden Ends Its Experiment. Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists who start from a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save […]
The Lessons From Japan’s Monetary Experiment
The Lessons From Japan’s Monetary Experiment A recent article in the Financial Times, “Abenomics provides a lesson for the rich world“, mentioned that the experiment started by prime minister Shinzo Abe in the early 2010s should serve as an important warning for rich countries. Unfortunately, the article’s “lessons” were rather disappointing. These were mainly that the central bank can […]
The Next Wave of Debt Monetization Will Also Be A Disaster
The Next Wave of Debt Monetization Will Also Be A Disaster According to the IMF (International Monetary Fund) and the IIF (Institute of International finance) global debt has soared to a new record high. The level of government debt around the world has ballooned since the financial crisis, reaching levels never seen before during peacetime. This has happened in […]
The Repo Market Incident May Be The Tip Of The Iceberg The Federal Reserve has injected $278 billion into the securities repurchase market for the first time. Numerous justifications have been provided to explain why this has happened and, more importantly, why it lasted for various days. The first explanation was quite simplistic: an unexpected tax […]
Why the ECB should raise, not cut rates
Why the ECB should raise, not cut rates Negative rates are likely one of the reasons behind the lacklustre European growth. Negative rates have worked as a tool to transfer wealth from savers to the indebted governments that have abandoned all structural reforms, while these extremely low rates have also perpetuated overcapacity, incentivised the refinancing of […]
Lacalle: A Day Of Reckoning Looms For The Global Economy
Lacalle: A Day Of Reckoning Looms For The Global Economy European and Asian economic data is deteriorating, says economist and author Daniel Lacalle. “I’d call right now the day of reckoning,” Lacalle says, in this video excerpt of our soon-to-be released podcast In The Arena. “The entire message from mainstream consensus is ‘Yes there was a […]
