More indicators show growing instability in the global economy, as US economy now appears to be slowing rapidly as well. Jack disassembles US 4th quarter 2015 initial GDP numbers, showing durable goods falling at the fastest rate since 1992, as business spending and inventories and exports continue to pose a problem into 2016. Jack predicts yet another ‘economic relapse’—the fifth in as many years—on the horizon for the US for 2016. Elsewhere, global instability continues to rise: Japan announces surprise negative interest rates, pre-empting Europe’s soon announcement of another QE expansion—which will intensify global currency wars further. China capital flight reaches $1 trillion, and Jack predicts inevitable Yuan devaluation coming. Italian banks in big trouble with more than $350 billion in non-performing bank loans (Europe more than $1.5 trillion). Why economists are confused about the correlation of stock price and oil price collapse occurring now. Jack’s view of unreliability of China stats confirmed by sacking of its statistics director this week, Wan Baoan. Japan stats with resignation of Akira Amani as well. Jack reviews billionaire speculator, George Soros’, predictions at interview at Davos last week, confirming China ‘hard landing’ underway and threat of spreading deflation, which Jack predicted in his book, ‘Systemic Fragility in the Global Economy’.
Jack Rasmus comments on the worried commentary about the global economy today coming out of this week’s World Economic Forum in Davos, Switzerland. The annual meeting of the big capitalists globally is producing a stream of concerned remarks on China, global oil, and drift toward deflation—all topics Rasmus focuses on in the release of his new book, ‘Systemic Fragility in the Global Economy’ , by Clarity Press. (see his blog, jackrasmus.com for sample chapters). Jack then reviews on the show important economic events and news of the past week, including Eurozone Chairman, Mario Draghi’s, pledge to expand QE in March, growing problems in European banks’ loans, capital flight from China and emerging markets, the admitting by the US business press that low oil prices are having no effect on the US economy and early reports that fourth quarter US GDP is coming in at only 0.6% growth according to the Fed and there’s a 50-50 chance of US recession this year.
Jack Rasmus continues analysis of China’s unwinding stock bubble and explains how it is connected to China currency devaluation, slowing real economy, and currency speculators in Hong Kong markets. How currency devaluation exacerbates stock decline and vice versa and how real economic slowing in China, now no more than 5% GDP annual growth, interacts with the other forces. China’s revolving bubbles, from property markets to entrusted loans and WMPS, to stock markets is explained. China’s $1trillion capital flight in 2015 and government policy makers spending of $500 billion to prop up stocks and currencies. How China’s massive credit-debt and liquidity buildup since 2009 is behind it all. And behind that the rise of shadow banks and the new global finance capital elite. Jack concludes with exploration of possible contagion effects from China’s continuing bubble unwind—on US corporate profits, stock investor contagion, on emerging market economies, and the parallel bubble deflation in global oil prices that continues. Jack concludes the global economy is moving faster now toward another financial crisis and global recession, which will be precipitated, he predicts, by China and then centered in emerging market economies. US and other advanced economies are far less prepared or able to contain the next crisis. (For deeper analysis, see Jack’s chapter 6 on China in his new book, ‘Systemic Fragility in the Global Economy’, January 2016, available from his blog at jackrasmus.com and on Amazon.)
Jack Rasmus takes a look at this past week’s major event in the collapse of the China stock market, as well as the resurgence of Neoliberal policies in South America and the US pivot to that continent and destabilization of economies in Venezuela, Brazil and Argentine now underway. What’s behind the most recent stock decline in China? Jack explains its relationship to the slowing real economy there, and the pressure to devalue its currency, the Yuan, that is growing. Devaluation coming in China is reflected in investors attempting to take their money and run, thus the stock decline now underway. China government efforts to slow it via ‘circuit breakers’ is not working as well as before. The real economy-currency-stock nexus will continue. How this all has contagion effects on the rest of the global economy is explained. Jack then looks at the US ‘pivot’ to South America, and specifically how the US destabilizes economies by wrecking its currency. Global oil and commodity crash, slowing China, and US interest rate hikes are all having major negative effects on South American economies. In this scenario, the US is now attempting to exacerbate Venezuela’s currency collapse even further, while attacking it politically and legally. Venezuela is a model of how the US destabilizes a country’s currency and therefore economy, as a prelude to re-establishing more friendly Neoliberal governments and policies.
Jack reviews the state of the US and global economy, focusing on US interest rate hikes by the Federal Reserve and its consequence for the US and global economies. In the review of this week’s economic events, the arrest of Pharma CEO Skrelli, what’s going on with Argentina and the resurgence of Neoliberalism in South America, and the US Congress’s passing of another $650 billion in tax cuts for corporations and the rich are also addressed. Next show: Jack continues review of his latest book, ‘Systemic Fragility in the Global Economy’, now available from his blog, jackrasmus.com, discussing why economists and their theorists continue to get the global economic picture wrong.
Jack takes a look at the key economic developments of the past week, and then provides the first of a several part analysis this month of the global economy explaining why it is becoming more unstable, both financially and economically—i.e. more ‘systemically fragile’. The analysis of the global economy is based on his just released new book, ‘Systemic Fragility in the Global Economy’ by Clarity Press. (see Jack’s blog, jackrasmus.com, where and how to order). Part 1 on today’s show identifies nine major anomalies that have appeared in the global economy today that mainstream economists can’t or don’t answer—which the new book attempts to explain. Jack reviews chapters 1 and 2, on the topic of the ‘dead cat bounce’ temporary recovery that began 2010-2013 in China and emerging market economies, which has been in decline once again since 2014. Stagnation in Europe and Japan, slow growth in the US, and ‘hard landings’ coming in China and emerging markets are now the prospect, after the ‘dead cat’ global economy has had its bounce. The ‘week in review’ commentary on the show addresses the renewed global oil price decline, junk bond fund defaults, China’s Yuan as global currency, Japan’s falsified GDP revisions, Yahoo’s effort to avoid paying $10 billion in US taxes, and the US Senate’s posturing about pharmaceutical drug company price rip-offs.
Listeners interested in enrolling in an online 8-week course starting in January on Jack’s new book, provided by the progressive-left ‘World Institute for Social Change’ (WISC) ‘Z School’, should check out the WISC website at:https://zcomm.org/zschool/moodle/ for more information. Free copies of the first two chapters of the book are available at the site.
Jack Rasmus looks at yesterday’s decision by the European Central Bank to make token changes to its QE policies, Japan’s central bank rumors of more QE, and the US Federal Reserve’s imminent raising of interest rates later this month. Why the ECB did not go ‘all in’ to expand its QE? Reasons: waiting on US Fed to move first, weaken German opposition to a later big QE boost, and ‘holding its powder’ for possible worse deflation and EU economy in 2016. Japan waiting on both US and Europe. Meanwhile, US Fed caves in to political moves by Congress attacking it. Conclusion: more QE in 2016, more currency devaluation, more pain in emerging markets and slowing of US exports and manufacturing, and China need to devaluate further next year. Recent economic news of importance is reviewed: oil price glut to continue despite Vienna OPEC meeting; China’s Yuan approved by IMF as global currency, and Brazil’s economy now tipping over into depression. Jack concludes with latest review of US economic performance: manufacturing and exports contracting, business inventories excess and spending, US residential housing growth now spent and flattening, poor Xmas retail sales emerging, auto sales based on debt reaching peak, savings from gasoline price declines diverting to rents, education and health care price increases, and now service sector growth slowing rapidly. Next Week show theme: ‘Systemic Fragility in the Global Economy, Part 1’, as Jack reviews conclusions of his just published book.
Dr. Jack Rasmus looks in depth at Chapters 27-28 of the TPP and how they set up a new global corporate government. Why the TPP violates Article III of the US Constitution and how its signing on October 4 in Atlanta represents the ‘founding convention’ of a new form of global corporate government. Jack explains the new ‘legislative-executive’ body of the TPP ‘Commission’ and the new tribunal courts system and the danger they represent to existing representative government in the US and the 12 member countries. Jack critiques the claim of TPP supporters that it is a ‘living agreement’, asking if this means every time the TPP is changed as new countries join will the TPP have to be ‘ratified’ each time? If not, then corporations and bureaucrats running the Commission and Courts will change the TPP as they like. Other chapters are reviewed on trade in goods, investment, intellectual property, financial services, labor and environment. Jack challenges Obama’s claim that 18,000 tariff cuts will mean more exports and jobs for US workers, noting TPP provides no control over currency devaluations which will more than offset tariff reductions. TPP is about ensuring money and investment flows by US banks, IT, and services companies without limit. It protects big Pharma companies and removes opposition to US produced GMO products by big US Agribusiness. TPP means: more profit and sales for them and fewer jobs, lower wages, and destruction of representative Democracy for the rest.
Jack announces a new format for future shows: The first half of the show will identify critical global and US economic developments of the preceding week, followed by comments on the economic proposals and programs of US presidential candidates. The second half of the show will focus on interviews or presentations on a major feature of the US or global economy. Next week’s feature: ‘Why the Global Economy is Slowing and why the IMF, World Bank, and Central Banks Keep Under-Forecasting the Trend’.
Jack Rasmus undertakes the first of a two part deep examination of the terms and conditions of the actual TPP agreement recently concluded. The origins and true functions of free trade agreements is explained, beginning with the 1944 Bretton Woods international monetary system, the IMF, and World Bank established by the US, the role of trade in US global dominance to the 1970s, the restructuring of trade and money flows in the 1970s, and the advent of Neoliberalism in the 1980s under Reagan and Thatcher. How free trade became the international lynchpin of US neoliberal policies, beginning in the 1980s and expanding ever since under both Democrat and Republican administrations. Obama as the biggest advocate of Free Trade thus far is explained. Jack then begins a section by section analysis of the 30 chapters of the TPP, with an overview of provisions associated with ‘goods’ trade, investment, financial services, intellectual property and Pharmaceuticals, and the Disputes Settlement/Corporate Global Courts system section that will undermine domestic democracy and sovereignty and lead to a new drive for global corporate supra-political institutions. In Part 2 next week, further details of the 30 chapters, and reactions by labor, environmental advocates, food safety groups, and others will be reviewed—as well as reports by organizers of the Nov. 18 national US protests against the TPP.
Jack Rasmus looks beneath the surface of today’s announced preliminary figures for third quarter 2015 GDP, which slowed sharply at 1.5% from the previous quarter’s 3.9% official growth rate. Jack predicts the US economy is headed, once again, in early 2016 for another ‘relapse’ with US GDP collapsing to zero or near zero growth—for the fifth time of a single quarter collapse since 2011. The US economy is on a ‘stop-go’ trajectory of periodic single quarter ‘relapses’ followed by short, shallow recoveries. Jack notes a similar process globally has been occurring in Europe and Japan, where ‘recessions’ instead of ‘relapses’ occur. 3rd Quarter US data show problems in business spending on inventories, business structures and equipment investment. Problems in US manufacturing and exports continue and will worsen, he argues, and housing growth will remain tepid based on high end residences and apartments. Jack challenges claims by media and economists that US consumer spending will continue to prop up the US economy, citing recent negative wage growth, deflating prices, and rising household debt. Look for 4th quarter growth no better than third, then a ‘relapse’ in 2016 as the likely trajectory. In the second half of the show, Rasmus discusses how US multinational corporations like Apple, Google, Starbucks and others manipulate global tax loopholes, how Wall St. manipulates the pharmaceutical companies, and how US consumers pay for pharma-bank profits and multinational corps taxes. Why politicians in office, and running, will do nothing about it—and pass even more tax cuts for US corporations after 2016 elections.