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Alternative Visions – Credit Crisis: The Next ‘Shoe to Drop’? + My Fiscal Stimulus Proposals

Today’s show focuses on the growing ‘dash for cash’ (aka liquidity crisis) underway by businesses and investors, as they anticipate falling revenues, profits, and cash needed to service (i.e. pay principal & interest charges) their $10T run up in corporate debt (bonds, loans, etc.) over the past decade. Rasmus explains how the $5T in junk bond & BBB corporate debt is especially at risk. Initial likely crisis in oil-energy junk bonds as global oil prices plummet into the $20-$30 range. How falling financial asset markets and prices are becoming synchronized globally, how the real (non-financial) global economy is falling into recession everywhere, and how the two sectors—financial markets and real economy—exacerbate each other’s downward trend. Credit crunch and crisis are the mechanism and nexus for transmitting the mutual downturns of financial & real sectors. Rasmus explains what’s going on in the credit markets and why the Fed is pumping $1.5T in just three days into just the Repo market in the US. A general liquidity crisis has emerged now.  Dr. Rasmus then reviews the measures proposed by Trump and the Democrats in the House. The show concludes with Dr. Rasmus reviewing his own just published fiscal stimulus measures (also available today on his blog, jackrasmus.com, and on the Counterpunch blog, and soon elsewhere). For a similar discussion, listen to Dr. Rasmus’s interview with Vermont ‘Equal Time Radio’ host, L. Traven, this past Wednesday at http://equaltimeradio.com/2020/financial-crash-underway-prelude-to-deep-recession.

 

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