And So It Goes…#767


The European Union project was long ago confined to the garbage dump of history,because of the toxic and ultimately fatal consequences of trying to impose a single currency across 28 disparate nation states and their economies. Folie de Grandeur reached its zenith with the insanest of insane supranational superstates, the never to be realised Union of Europe. All the actually rational doyens of Global finance and financial markets,economics experts and commentators of renown and impartial sobriety have long since acknowledged all this and have written and continue to expound on these,for them,gravest of all matters. Ambrose Evans-Pritchard amongst them. The useful idiots who pretend to understand such matters ( the elected,expenses-fiddling mediocrities and media studies graduates that constitute the major parliamentary parties ) really have no grasp as to the terrifying beauty that is the logic and order let alone the purpose of the Capitalist system.Go on,wave placards at it demanding some negligible socio-economic reform;ooh scary ! And the hypocrites and dilletantes who postulate ahistorical attributes to the pawns in the transnational migration process and fail to understand that immigration is merely a function of global monopoly capitalism and nothing more. Capitalism ends and the existence of its Ruling Elites – which cannot exist outside of capitalist relations of production- ends when the process that has devoured all previous empires finishes devouring the present calamitous Order. Nothing whatsoever to do with contending variants of specious and speculative notions of morality or fairness or justice or what colour wallpaper we’re having after the next non-revolution.

“..it increases the pain for the eurozone and Japan as their currencies rocket. The world is in effect playing a high-stakes game of pass the parcel, with over-indebted countries desperately trying to export their deflationary problems to others..”

Schadenfreude doesn’t get much better than this.

 

Ambrose Evans-Pritchard
3 MAY 2016 • 7:39PM
The US dollar has plunged to a 16-month low in the latest wild move for the global financial system, tightening the currency noose on the eurozone and Japan as they struggle to break out of a debt-deflation trap.

The closely-watched dollar index fell below 92 for the first time since January 2015, catapulting gold through $1300 an ounce in early trading and setting off steep falls on stock markets in Asia and Europe.

The latest data from the US Commodity Futures Trading Commission shows that speculative traders have switched to a net “short” position on the dollar.

This is a massive shift in sentiment since the end of last year when investors were betting heavily that the US Federal Reserve was on track for a series of rate rises, which would draw a flood of capital into dollar assets.

Markets have now largely discounted a rate rise in June, and are pricing in just a 68pc likelihood of any increases this year.
The dollar slide has been a lifeline for foreign borrowers with $11 trillion (£7.5 trillion) of debt in US currency, notably companies in China, Brazil, Russia, South Africa, and Turkey that feasted on cheap US liquidity when the Fed spigot was open, and were then caught in a horrible squeeze when the Fed turned to tap off again and the dollar surged in 2014 and 2015.
But it increases the pain for the eurozone and Japan as their currencies rocket. The world is in effect playing a high-stakes game of pass the parcel, with over-indebted countries desperately trying to export their deflationary problems to others by nudging down exchange rates.

The Japanese yen appreciated to 105.60, the strongest since September 2014 ,the wild moves over recent weeks have blown apart the Japan’s reflation strategy. Analysts from Nomura said Abenomics is now “dead in the water”.

The eurozone is also in jeopardy. Nice.

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