Markets, Money and More........!!!!

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DV52

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Maybe it's time for global markets (read "us-all") to start paying-back the world's fiscal policy response to the COVID-19 crisis - which has been the largest and fastest spending-spree in peacetime?

 
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Uwe

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Conclusion
The COVID-19 pandemic caused the largest fall in economic activity since at least the Second World War.]
Horsefeathers.

Government and media over-reaction caused this, not the virus itself.

Maybe it's time for global markets (read "us-all") to start paying-back the world's fiscal policy response to the COVID-19 crisis - which has been the largest and fastest spending-spree in peacetime?
Yeah, good luck with that. Most western governments were over-burdened with debt before the Covid panic to the point that it would never be possible to pay off, or even substantially reduce that debt. Every year, they consistently spent more than they took in as taxes, and their central banks were happy to oblige this spending by accepting government IOUs in exchange for newly "printed" money. The system had already painted itself into a corner, where any substantial increase in interest rates would utterly destroy government budgets (not to mention many highly-leveraged corporations).

I've said it for over 10 years: This will not end well, and the problem is several times bigger now. I don't know when it will end, but there will be a lot of pain when it does.

-Uwe-
 
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JMR

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arghh f*&k the government ( of Romania at least). We are a population of 19.29 millions and yet Romanian govt purchased/ordered 120 million doses. And here comes the Romanian Prime Minister on 14.01.2021 and says ( in so many words: We did not acquired 120 millions doses yet BUT we've ordered 120 millions doses for years to come and WE DO NOT KNOW THE FINAL PRICE OF THE ENTIRE 120 MILLION DOSES !!!

Translated text from Romanian to English and original link:
https://www.agerpres.ro/politica/20...vid-sunt-comanda-pentru-mai-multi-ani--747828

* The prime minister added that the total price of the doses will be known when Romania will have to pay them.
"We'll see what the final bill is when we pay them. We've sold a lot of them, the price has dropped to some of them. So there's no fixed cost at first. First, the order is placed and then we have the bill ", Florin Cîţu explained. AGERPRES / (A, AS - author: Daniel Florea, editor: Cătălin Alexandru, online editor: Gabriela Badea) "

Say what motherf&&^&???
 
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Uwe

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We are a population of 19.29 millions and yet Romanian govt purchased/ordered 120 million doses.
So six doses for every man, woman, and child in the country? :eek:

-Uwe-
 
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JMR

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if your math is right , yes. Man.... i think that is the biggest scam since Madoff ! How can you order 120 million doses and not know what you'll pay for it ? I am thinking that my government is not that stupid but they had to align to the EU directive of buying and being indebted to God knows who !
At just 15 dollars a pop the total price is 1.8E9 US dollars.. . My phone calculator does not show an amount that my mind will understand ! Is that trillions or am i stupid ? And i am assuming just 15 dollars here...might be 1 dollar a dose? Might be 30 dollars a dose ? Anything in between and it's still in the millions and hundreds of millions debt forever :eek:
 
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Uwe

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i think that is the biggest scam since Madoff !
Madoff was a piker. Look at what the banks took from (future) taxpayers in 2008-2009.

This time, it appears to be the pharma industry's turn to extort us all.

At just 15 dollars a pop the total price is 1.8E9 US dollars.. . My phone calculator does not show an amount that my mind will understand ! Is that trillions or am i stupid ?
1.8 Billion. E3 is 1000. E6 is a million. E9 is a billion. E12 is a trillion.

And yeah, $15 per dose is likely in the ballpark for what Pfizer or Moderna would charge the government of a not quite "rich" country.

-Uwe-
 
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JMR

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1.8 fu&%ng billion of dollars !! It's not an extremely high price for a country with a shitty 242 billion us dollars GDP but it's a LOT ..is that nearly 4 % ? I would've loved it if they invested that money in roads man, we are the laughing stock of Europe when it comes to roads. But no ! Let's invest in covid shots... Someone is making a lot of money and it's not me ,my people or my country .:cry: I weep for the future of my children !
 
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dieseldub

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Speaking of markets in general, before the rather large slide of the last couple weeks, I had been messing around in Tradingview's charts with specific stocks and indicators.

Here is a photo of the S&P 500. Each 'candle' representing one month's worth of price movement (min, max, open and close and price direction can all be viewed at a glance with 'candles').

In it, you can see the DOTCOM bubble pop, took over 2 years to find bottom from the peak. Then the 2008 mess. The much quicker COVID crash and a near parabolic rise up since:

index.php


What happens when you take into account the S&P's price action for the total money supply? SPX/USM2:

index.php


We have printed an awful lot of money since March 2020....

You can see the date snapshot at the header of each image. This was just before Christmas, so you're not seeing the more recent slide (although to be fair, the current slide is not anywhere near as massive as the biggest sell-offs seen here--at least not YET...).
 
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vreihen

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hmm.......... what are you guys doing up there in the land of the freeFALL??:D

Fixed that for you!

I'm afraid to even look at my retirement portfolio after the stock market freefalls this week..... :cry:
 
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Uwe

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what are you guys doing up there in the land of the free??:D
Creating lots of new money without a corresponding increase in economic activity. The effect of doing that is entirely predictable.

-Uwe-
 
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vreihen

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Creating lots of new money without a corresponding increase in economic activity. The effect of doing that is entirely predictable.

Yesterday's fun was apparently a result of the Federal Reserve raising interest rates by 0.5%. They couldn't keep giving away money forever.

FWIW, I just looked and cried. My retirement account is down 7.8% for May so far..... :eek:
 
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DV52

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@DrPeter: Interesting (and worrying) App - thanks for posting.

However, whilst the ever climbing counters in your links are disturbingly hypnotic, the more daunting aspect of the world-debt-clock is the beguiling question - who holds the debt? Of course, under the fractional reserve banking system that most (all?) countries use - the answer is sadly, "us" (even for World Bank/IMF loans)!

I've never understood the logic of the reserve bank's practice: if anyone of us as private citizens print money that is not underpinned by actual value (measured anyway you want - increased GDP, say), we have the effect of devaluing everyone else's money in the community and we are thrown into prison.

BUT, if the Reserve Bank does exactly the same (with exactly the same impact on the worth of the community's money), not only is it NOT a criminal act - but we are all compelled to pay interest on the new notes through taxes which in part pays for Government bonds!! What a scam!!

Don
 
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Uwe

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who holds the debt?
A good bit of it is on the balance sheets of the central banks; they buy it with freshly created (out of thin air) "money". That debt is an asset on their balance sheet, and the money they created to buy it is a liability on their balance sheet. This maintains the illusion that the money hasn't outright been printed. Indeed, money is no longer printed, it is borrowed/lent into existence.

Prior to 2008, the US Federal Reserve's balance sheet was always under $1T. During the recession of 2008-2009, it more than doubled to slightly over $2T. Subsequent "quantitative easing" operations doubled it again to over $4T by 2015. It then remained steady and actually began a slight to just under $4T during 2018-2019. Then in 2020 it shot up vertically to around $7T, and is now just about $9T.

FR-Balance-Sheet.png

I don't have data for other countries' central bank balance sheets handy, but I'm confident you would find similar patterns from many of them.

Now imagine what interest rates would be like if the US government had to borrow that money from the private sector rather than having a handy central bank to create it...

-Uwe-
 
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DV52

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Hi,

@DV52, You may want to read..... But do not look for this book in any school library, as you will not find it!

www.amazon.com.au/dp/B00NXCYBK2


drpeter
@DrPeter : Arrhhh.......... yes, the intriguing story of the inchoate (look it up) days of your Fed Bank and the struggle between America's then Jeffersonian Banking system and the centralized system that the rest of the world used (still uses)!!

Of course, I'm a foreigner - but it seems to me that the essential premise of this story has permeated every major decision that America has ever made throughout its relatively short history - and ostensibly the same question continues to rage in your country in the 21st century; it's the perennial Yankee question about what is the appropriate size (and therefore "reach") of your centralized Government versus how much power should remain in State control in earlier times, or in the people's control in latter years?

But thanks for the suggestion - from the short audio book sample that I listened-to, it seems to be a good read (albeit, liberally laced with flowery prose).

Don

PS: hmm........ I need to find $43.21 USD to purchase the book - now, how many zeros is that in AUD? :D
 
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Stormy1

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Creating lots of new money without a corresponding increase in economic activity. The effect of doing that is entirely predictable.

-Uwe-
Bring back tying cash to gold. Should never ever have been allowed to happen. Tricky US govt waited until all those that opposed this move, or at least the majority of them left the house and then took the vote. How the hell did we (Western world) allow this and the transfer of Federal Reserve/Banks to private enterprise where greed runs rampant? I reckon some elected official made a motza in a secret deal that they have managed to bury. Guess we will never know the whole truth of the matter.
Can we turn back time? Then we could stop the rot we never saw coming!
 
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Crasher

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Abandoning the Gold standard was a huge mistake and then our Chancellor of the Exchequer, one Gordon (is a moron) Brown sold all our Gold reserves just as it hit its lowest price in decades! What a complete tosser!
 
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dieseldub

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Welp... interest rates are ratcheting up and the beatings in the market have continued from the January slide. Looking pretty ugly out there. Interestingly, the Fed balance sheet has actually come down ever so slightly from end of January numbers.

But, clearly, the removal of liquidity has a lot to do with why the market keeps sliding the way it is. Things could get ugly for anyone still holding stock that was purchased since the COVID crash.
 
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