The US New New-Deal Cocktail: Half-Saltwater/Half-Freshwater, Shake Globally
“The financial system is on the cusp of significant change. Central bank digital currencies (CBDCs) are central to this effort.” (Augustin Carstens)
Summary:
· Non-G7 Risk-Off emerges out of Africa on the Sino-American Cold War front line.
· Non-G7 Risk-Off is causally identified with scarce US Dollar Reserves.
· The fire sale of African Crude, priced in US Dollars, to replenish depleted US Dollar Reserves, is “taking the + out of OPEC+”.
· The “Asian Debt Crisis rinse and repeat” is occurring in the Chinese Shadow Banking sector.
· China’s redirection of US Dollar reserve resources, from Belt and Road to the domestic economy, is an emerging market headwind.
· The BIS positions the BOK’s CBDC project as the response to the “Asian Debt Crisis rinse and repeat” that is currently being responded to with short-selling bans.
· DNB loves Barbarous Relic.
· Strictly Speaking, if US Baby Boomers are the biggest winners, then, Gen-X-to-Z are the biggest losers from economic policymaking.
· The Fed must curate a TikTok account to frame Gen-X-to-Zs’ economic perceptions and behaviour.
· The Boston Fed’s new definition of full employment is a glass half-full of Saltwater School Economics.
· The Boston Fed’s new definition of full employment is fresh because the other half comes from the Supply Side Freshwater School on the shores of Lake Michigan.
· The Boston Fed’s new definition of full employment is Macklem Doctrinaire, and Friend-Shore compliant.
· By the nature of its mix, of Saltwater and Freshwater Economics, the Boston Fed’s new definition of full employment logically implies productive disinflationary US economic growth.
· The Boston Fed’s new definition of full employment suggests that the USA should have a New Deal.
· A US New Deal requires a bigger fiscal deficit.
· A bigger US fiscal deficit requires a bigger Fed balance sheet.
· A bigger Fed balance sheet requires a global financial crisis.
· A global financial crisis requires China and Asia to “rinse and repeat”.
· A global financial crisis is an enabler of the US New Deal, rather than a threat to it, because of the Saltwater demand-side/ Freshwater supply-side US policy mix.
· “Stupid” has morphed, from a political liability to a media fatality which has completely distracted, and diluted, any positive momentum, from the Autumn Statement, in the “Ungoverned Kingdom”(UK).
· The writing is on the “Red Wall”, for “Stupid”, and his party, in the “Ungoverned Kingdom” (UK).
· Capital flow data, and the wars in Ukraine and Gaza, illustrate how the USA has become a global source of scarce/expensive reserve currency.
· The global demand for reserve currency requires the liquidation of US Treasuries at the same time as the Fed is liquidating its balance sheet.
· Global financial instability will prompt the Fed to reverse course and start providing scarce reserve currency more abundantly and cheaply.
(Source, and emphasis: the Author)
· The stronger US Dollar takes the “+” out of OPEC+.
(Source: the Author)
· Thanks to Asian sanctions busters there’s no “+” in OPEC+.
(Source: the Author)
· The USA may be Unfinanceable, off the Fed Balance Sheet, but China has been downgraded, from Un-investable Grade to Un-exitable Grade.
· The process by which US fiscal deficits finance Chinese trade surpluses, which then finance US investment in China, is strategically broken.
· China is highly likely to be the trigger for an “Asian Debt Crisis rinse and repeat”.
(Source: the Author)
· The BIS confirms that digital currency debasement is next on the agenda of developed central banks.
· The Bank of Korea’s digital monetary debasement is everywhere and always a Greenwashing phenomenon.
· South Korea has banned leveraged Non-G7 Risk Off.
· Some EM borrowers are doing so before credit spreads widen further.
(Source: the Author)
· He/She/They Gold has the correct global macro view.
· He/She/They Gold envisions a debased currency polycule that is artificially inseminated by Modern Monetary Monopsony Theory (MMMT).
· MMMT is consistent with a new definition of full employment.
· CBDC is fertile ground for monetary artificial insemination.
(Source: the Author)
(Source: gainesvillecoins)
· Strictly speaking, once again, in history, the US Baby Boomers are the biggest global winners before taxes and death.
(Source: the Author)
· Chairman Powell becomes a Social Media Influencer to frame misperceptions of what “Tighter for Longer” means.
(Source: the Author)
· The global demand for reserve currency requires the liquidation of US Treasuries at the same time as the Fed is liquidating its balance sheet.
· Global financial instability will prompt the Fed to reverse course and start providing scarce reserve currency more abundantly and cheaply.
· The USA may be Unfinanceable, off the Fed Balance Sheet, but China has been downgraded, from Un-investable Grade to Un-exitable Grade.
· The process by which US fiscal deficits finance Chinese trade surpluses, which then finance US investment in China, is strategically broken.
· China is highly likely to be the trigger for an “Asian Debt Crisis rinse and repeat”.
(Source: the Author)