Equity 1 Group
Pushing back the frontiers of economic ignorance and restoring sound financial foundations, one family at a time.

Mar
28

Venezuela Freefall: 6,147% annualized inflation in February

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Mar
26

GoldTelegraph  |  Alex Dulce

Worried about higher prices when you go to the supermarket? So are Venezuelans. Consumer prices saw a 6,147 percent annual increase in February. That may be purely theoretical since spiraling inflation has left the country with so few necessities left to buy, desperate Venezuelans are going without food and medicine. What few goods are available are bought on the black market. The average Venezuelan earns a mere dollar or so a month. A bag of rice, if it can be found, costs 8,000 Bolivars, far out of reach of Venezuela’s minimum wage earners.

As opposition economist Angel Alvarado proclaims, “Made in Socialism!” Venezuela’s misery is the result of socialist policies run amok.

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Mar
26

“China has considerably more leverage over the U.S. than Washington politicians care to admit.”

BloombergNews

The trade conflict between China and the U.S. escalated, with Beijing announcing its first retaliation against metals levies hours after President Donald Trump outlined fresh tariffs on $50 billion of Chinese imports and pledged there’s more on the way.

On Friday, China unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by Trump earlier this month. The White House then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear. Though Beijing’s actions so far are seen by analysts as measured, there may be more to come.

Equity indexes from Tokyo to Frankfurt tumbled with European equities falling to the lowest in more than a year. U.S. stock futures dropped, signaling a further retreat for the S&P 500 Index after it fell 2.5 percent, on risks a further escalation in trade tensions will undermine an unusual phase of synchronized global economic growth.

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Mar
26

…they don’t care how much they hurt or how bad the timing might seem to be.

CNBC  |  Bill Gross

Another example of how the Fed has inevitably painted itself into a corner. You can’t engineer the downside out of economic systems. They can’t keep rates low and they can’t afford to raise rates. There is no easy solution anymore because there is no fiscal free lunch. If you want to get super drunk on stimulus today, you can’t do that without paying for it tomorrow.

Unless you’re not willing to feel the requisite pain required to pay for your overindulgence and get back to true equilibrium. In that case, you’re going to have to get drunker still on accommodative policy the next day. Getting perpetually drunker is not the ultimate solution to your problem, and can only end badly, yet this is the central bank long-term course of action.

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Mar
26

They don’t want you to know how ineffective dark money policies have been for real economic growth.

TheDailyReckoning  |  Nomi Prins

It’s like having have the financial world run by childish adults who just won’t stop playing with economic matches until the whole house burns down. During the subprime crisis, everyone at every link in that thoroughly debased chain, from the Wall St. derivative packagers all the way down the Las Vegas cab drivers lying about their income and buying 2-3 new zero-down “investment properties” per year, performed the same ‘reality’ check.

They looked to their left. They looked to their right. Everybody else seemed to be doing it.

It seemed to be working. So they decided it must be okay. And it was, until it suddenly wasn’t, and the entire market collapsed.

World central bankers are Las Vegas cab drivers getting endless liar-loan mortgages, raft upon raft of debt that can never be paid back, but so long as markets will keep buying the delusion and their world cohorts keep toeing the party line, they will not stop until it is too late and the free market, as it always eventually does, imposes its will on human folly.

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Mar
26
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26

Simply put, the world’s central banks are playing a game of monopoly.

TheGoldTelegraph  |  Alex Dulce

The global economy has been living through a period of central bank insanity, thanks to a little-understood expansion strategy known as quantitative easing, which has destroyed main-street and benefitted wall street.

Central Banks over the last decade simply created credit out of thin air. Snap a finger, and credit magically appears. Only central banks can perform this type of credit magic. It’s called printing money and they have gone on the record saying they are magic people.

Increasing the money supply lowers interest rates, which makes it easier for banks to offer loans. Easy loans allow businesses to expand and provides consumers with more credit to buy goods and increase their debt. As a country’s debt increases, its currency eventually debases, and the world is currently at historic global debt levels.

With securities being bought by a currency that is backed by debt rather than actual value, we have recently seen $9.7 trillion in bonds with a negative yield. At maturity, the bond holders will actually lose money, thanks to the global central banks’ strategies. The Federal Reserve has already hinted that negative interest rates will be coming in the next recession.

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