Central banks do not manage risk, they disguise it. You know you live in a bubble when a small bounce in sovereign bond yields generates an immediate panic reaction from central banks trying to prevent those yields from rising further. It is particularly more evident when the alleged soar in yields comes after years of artificially depressing them with negative rates and asset purchases.Continue reading Yield Curve Control: Bubbles And Stagnation
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Monetary policy has gone from being a tool to help states make structural reforms to become an excuse not to carry them out.
Continue reading Inflation Is Back. Protect Yourself
The constant financing of deficits in countries that perpetuate structural imbalances has not only not helped to strengthen growth, since the Eurozone and the United States already suffered downgrades of estimates before the Covid-19 crisis, but is also driving inflation higher.
The United States election campaign is focused primarily on how much will the next president spend and the measures to combat coronavirus. Both issues should point to one conclusion: Unlike what candidate Biden wants to do, the next United States president should not copy the European Union.
As we face a second wave of coronavirus outbreak in Europe, we know that the March measures and aggressive lockdowns were a grave mistake.
The European economy is on the verge of a double-dip recession, the unemployment rate is at 8.1% compared to 7.8% in the United States but the European Union still has around 10 million furloughed jobs. Real unemployment, if we use the same calculation as in the United States, is closer to 11%.Continue reading United States Elections: The Risk of Copying Europe