Credit Crunch Time, For The Three Kingdoms

“I guess it shows the economy is very bad to cut it by that much, assuming that they are not just playing politics.” (Donald J. Trump)

Sep 28, 2024

(Source: NewScientist, editing by the Author)

Summary:

· Having baled on Don Keir “Inner Temple’s” Jibbers, Andrew “The Governor” Bailey should, now, be tightening, against them, according to the September Key Signals monthly UK indicator.

· Chancellor Reeves signals that the UK fiscal rules will be bent.

· Presumably, Andrew “The Governor” Bailey will let Sterling do the tightening; until it crashes the UK economy, at which point, he will, then, let it do the easing.

· The effective loss of control of Sterling will oblige the UK to seek help from the IMF.

· The IMF will opine that the bent fiscal rules are broken.

· EU Mercantilism/Protectionism and the coming levels of Sterling volatility vitiate strongly against the UK’s Re-join riff.

· The insolvent PBOC has triggered a Credit Crunch, by, simultaneously, Quantitatively Tightening reserves, while cutting bank lending margins, at a time when the economy is contracting.

· The PCPC is de facto nationalizing the banking system; by injecting Tier 1 capital, of its own, to replace withdrawn central bank reserves.

· In survival mode, Xi Jinping has become the Last Emperor; who cannot fund foreign adventure along his Belt and Road.

· “US Swing Producer Status”, plus Chinese economic weakness, has finally impacted long-term inflation expectations.

· The black cloud, beyond “US Swing Producer Status”, has a Lithium lining.

Extracts

(Source: Bloomberg, caption, and editing by the Author)

(Source:politicsUK, caption by the Author)

(Source: KeySignals, caption by Sir Alex Ferguson)

· Andrew “The Governor” Bailey bales on Don Keir “Inner Temple’s” Jibbers.
(Source: the Author, September 21^st 2024)

·       The rapacious, and capricious, Public Sector will undermine the “Concierge”; and divert him towards the IMF.
·       The “Masters of the Asset Class Universe”, have tumbled, and are evading Don Keir “Inner Temple’s” next caper.
·       The “Masters of the Asset Class Universe’s” evasion is the Bank of England’s balance sheet diversion.
·       The Bank of England’s diversion will be the IMF’s invasion.
(Source: the Author, September 7^th 2024)

(Source: tradingeconomics, caption by the Author)

· Public opinion about the “Ungoverned Kingdom” (UK) re-joining the EU is at fantasy levels, wildly, divergent from the current “pre-ERM Exit” levels of economic optimism and Sterling.
(Source: the Author, September 7^th 2024)

(Source: Bloomberg, caption by the Author)

(Source: Bloomberg, editing by the Author)

·       “Grim (Reaper) Labour’s Cheka” confiscates pensioners’ wealth to transfer to public sector foot soldiers.
·       “Grim (Reaper) Labour’s Cheka” confiscates pensioners’ wealth to fund public sector capital investment.
·       The “Grim Reever” does not understand that you cannot confiscate an actuarial deficit by pretending it is hypothecated national wealth.
·       When the “Grim Reever” realizes she cannot confiscate a deficit, she will oblige the Bank of England to monetize it.
(Source: the Author, August 17^th 2024)

(Source: bambooinnovator, question by the Author)

·       The USA has been afforded Swing Producer status, hence, the opportunity to influence short-term inflation expectations in addition to even greater influence over long-term inflation expectations.
·       America now has the opportunity to exert greater influence on long-term inflation expectations, and energy security, on China’s front doorstep, in Asian Friend-Shoring supply chains.
·       China is “exporting deflation and détente” by playing OPEC “frienemies” off against each other, and Russia, over market share of its petroleum imports.
(Source: the Author, April 8^th 2023)

The Key Signals Report

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