The Central Bank of the world
June 21, 2024Before your eyes, the most impressive chart of the decade: how employment rebounded spectacularly in the United States after Covid, much faster than in all previous crises. The credit goes entirely to the Fed and its masterful handling.
The untapped potential of our Central Banks
June 19, 2024The USA now spends as much on paying the interest on their debt as on their defense budget! So, we are not the only ones in debt. However, the major difference is that the USA can – through their Central Bank – create money that flows through all sectors of their economy. Result? Growth:…
Two main points, no more !
June 16, 2024Our productivity growth is collapsing: in 25 years, GDP per capita has become 1/3 lower than that of the US. Three-quarters of this gap is explained by lower productivity. The culprit = digitalization, without which the productivity growth of the two blocs would be identical. Another major handicap: 60% of companies suffer significantly from energy…
Cheap drugs, a new calamity for Arab countries
June 2, 2024The Middle East is awash with Captagon. A mixture of amphetamine and caffeine, this drug has become particularly popular in Saudi Arabia and the United Arab Emirates. Workers and partygoers use and abuse it, partly to suppress hunger and partly to stay awake as long as possible. These two countries are facing a true…
The beginning of the end, or the end of the beginning?
May 29, 2024A trade deficit must be offset by financial inflows to maintain a minimum level of equilibrium. The United States runs a significant and constant trade deficit, which they manage to finance through the sale of Treasury bonds, bought by China and other governments/central banks. The deal is as follows and is an integral part of…
Gaza 2035 : a clean slate ?
May 26, 2024Israel and the United States are working on a route that would allow heavy trucks to travel to the United Arab Emirates through Jordan and Saudi Arabia. In parallel, the normalization of relations between these countries will be crowned by a railway project (under study since 2017) linking the Israeli port of Haifa to…
K
May 23, 2024Remember this letter “K” well, a symbol of the massive imbalances that twist our Western societies. There is the tiny minority enjoying an absolutely unprecedented surge in financial markets and private investments, who—indifferent to prices—are thriving economically. They are represented by the rising and triumphant branch of the K. Then there are all the…
Iran: the Hidden Implications of Raïssi’s Death
May 20, 2024In Iran, the powers of the President are minor: he is like an Interior Minister who has no say over national security or ideological direction. Raïsi and Mojtaba Khamenei were openly competing to succeed the Supreme Leader Ali Khamenei, Mojtaba’s father. Raïssi’s death clarifies the situation and puts the Supreme Leader’s son in a…
European disUnion
May 16, 2024Graphs of exports from certain European countries to Kyrgyzstan, which then transfers these goods to Russia. After 13 EU sanctions packages against Russia, this is the reality. Russia’s invasion of Ukraine highlighted the dysfunctions within the EU, whose members engage in unhealthy internal competition. Remember the grand statements about European unity?
Europe, the eternal indecisive
May 10, 2024The interests only on their public debt has cost the United States more than $1 trillion in the past 12 months, and these amounts are condemned to increase due to the maintenance, for some time still, of the current level of interest rates. But it doesn’t matter: they have the King $. While we…
When China Gives in…
May 9, 2024China is on life support: 18 units of credit in China only equate to 1 unit of GDP growth. A cornerstone of household wealth at 65% of their assets, the country’s real estate sector, along with indebted regional governments to the tune of $9 trillion (over half the national GDP), are faltering. Authorities…
Abusive share buybacks
May 7, 2024In 10 years, Apple spent $ 625 billion buying back its own shares. This astronomical sum is equivalent to the market capitalization of the entire major Standard & Poor’s index, which includes 492 companies ! Financial engineering at its most dubious.
Banks : must we regulate the regulator?
May 5, 2024Is it true that the more capital banks have, the more they lend? In many countries with financial giants, debates are intensifying once again, bringing to the forefront the delicate question of the adequate level of capital banks should have. Summoned urgently last year for Credit Suisse, the Swiss government is in the midst of…
China/USA: a separation of bodies
April 26, 2024China’s holdings of U.S. Treasury bonds are at their lowest level in 15 years, while its gold reserves have reached a record high. These are all signals indicating a desire to decouple its economy from that of the United States as quickly as possible.
No need for electric shocks to reduce public debt
April 23, 2024See for yourself the impressive improvement in the Debt/GDP ratio of Greece and Portugal! Yes, inflation works very well to lighten the burden of public debts, provided we fix the duration of our loans and do not issue inflation-indexed debt. The deprivations inflicted on our populations are much more a matter of punitive intent than…
The Ravages of Economic Dogmatism
April 20, 2024They have brought Europe to a standstill. The productivity differential is widening further every quarter between us and the United States, who are racing ahead, far ahead of the European Union with their 2.6% growth compared to the pitiful European regression of 1.2%. Mario Draghi warned us a few months ago, stating that…
My 5 Points program for the Swiss National Bank
April 9, 2024April 9, 2024 Dear Federal Councillors, I am a candidate to succeed Mr. Thomas Jordan as the President of the Swiss National Bank, and I have the honor to present in 5 points the reforms that I would like to implement if appointed to this position. I – Expansion of the Executive Board from 3…
For the first time, a candidate for this position dares to dream of an “ethic of responsibility towards the population”
April 9, 2024“With a more independent profile like Michel Santi’s, we start to imagine other possibilities.” Quelle BNS voulons-nous et qui devrait la diriger? L’heure est venue pour la BNS d’en finir avec la gouvernance opaque. Le futur de la BNS doit se conjuguer avec les intérêts des citoyens et des entreprises suisses, estime notre chroniqueuse Myret…
Inflation? What inflation?
April 8, 2024Inflation? What inflation? It was fundamentally influenced by supply-related factors: disruptions in the supply chain, energy, and food. Not by factors related to a surge in demand… precisely because our middle classes and our poor are forced to limit their standard of living due to inadequate policies, and a multitude of asymmetric shocks that have…
Is Europe waging war against its citizens ?
April 6, 20244 years after the Great Recession of 2007-2009, the United States had recovered 4 million jobs. 4 years after the pandemic, they now recover 6 million jobs, thanks to the massive fiscal stimuli implemented by the Biden administration. Europe, for its part, as usual, stagnates, vegetates. Wait: unless it tries to follow the United States,…
Silence is golden
April 2, 2024Gold prices, XAU/JPY. Gold shatters all records, silently. Pay attention as gold is sending us a message.
Should human intelligence be restricted in the interest of humanity ?
March 30, 2024The global low fertility crisis strikes at the heart of scientific and technological progress. Why? It is precisely the places with the highest innovation that are hit hardest. South Korea has both the highest innovation and lowest fertility rates in the world.
Disruption Ahead?
March 26, 2024The port of Baltimore was significant in US vehicle imports. «Predictability: Does the Flap of a Butterfly’s Wings in Brazil Set off a Tornado in Texas?», Edward Lorenz, 1972 Globalization or not globalization? As the Swiss say, you can’t have the butter and the money from the butter…
No more bets ?
March 25, 2024Since mid-2022, real estate prices in the United States have dropped by an average of 20%, compared to a total of 23% during the cataclysmic subprime crisis. It was 23% at the time from 2007 to 2010, whereas we’re dealing with a 20% decline over 20 months now. This would suggest that the collapse is…
The Year 0 of Germany
March 20, 2024This is striking! The energy crisis of 2022 has been the worst economic crisis in Germany since WWII when looking at the decline of real wages. The increase in the price level is very likely permanent – those with savings have unexpectedly lost some of their purchasing power. The real estate owners (upper middle class)…
World : Life prognosis at stake
March 18, 2024It’s always the same eternal questions that torment us when a bubble bursts and wreaks havoc on human, economic, and ecological fronts: How did we get here? What happened? Our world finds itself today in a critical situation with few historical precedents because we are now all hostages to multiple and repetitive bubbles. There’s the…
The Age of Barbarians
March 15, 2024How can we forget the cult British series from the 60s, The Prisoner, where a terrifying bubble relentlessly pursued the hero played by the charismatic Patrick McGoohan? Our world finds itself in a similar situation because we are now all hostages to bubbles. From the bubble that isolates the rulers, to the bubble of the…
The purpose of money
March 3, 2024The German Finance Minister, Lindner, a great strategist in the eyes of the Almighty, announces the implementation of an austerity plan consisting of reducing public spending by 30 billion in 2025… thus condemning his country and the rest of Europe to assured recession. A recession occurs when a state is suddenly gripped by the desire…
China : the Weakened Dragon
February 18, 2024The 2008 financial crisis marked a decisive turning point in the Chinese economy: adverse effects of which are still being felt today. Fearing contagion that would affect their banking system and the detrimental consequences of a decline in exports due to the slowdown in global demand, Chinese officials believed—following the path laid out by the…
Never underestimate Russia
February 4, 2024“The Ruble has collapsed. The Russian stock market closed due to fears of capital flight. Interest rates have more than doubled. Credit rating agencies have significantly downgraded Russia.” These were essentially the statements made by Antony Blinken, US Secretary of State, echoing the sentiments of Western officials who were counting on “massive and unprecedented consequences”…
Germany holds back Europe
January 21, 2024The most serious economic mistake of Germany in the last 20 years. Celebrated at the time as a victory for fiscal and budgetary discipline, breaking away from the carelessness attributed to the vast majority of European Union members strongly encouraged to follow suit. Engraved in the marble of the Constitution. Today, German politicians no longer…
Javier Milei: Argentina’s Last Chance
January 6, 2024Several countries have decided to stop using their own currency and instead adopt the US dollar as the standard for exchanges. For some poorly managed economies plagued by corruption, abandoning the national currency is often a last resort before total collapse. Westerners often fail to realize the endless complications and hardships caused by a currency…
Good news: the Middle East is aging
November 30, 2023In 2021, researchers Hannes Weber and Richard Cincotta theorized that countries with a median age of 25 or younger among their citizens are more prone to revolutions. Previous studies had already established a correlation between a young demographic and a higher risk of war or political violence. Data from the 1990s revealed that countries where…
The billions of the energy transition and the risks of wastage
November 20, 2023Tough times for those who thought, with naive enthusiasm, that the staggering sums poured by our states to facilitate the carbon transition would all be used wisely. What can now be referred to as green scandals have been occurring for some time, reflecting—or as a consequence of—governments engaging in a real race to spend the…
Compensate the descendants of slaves
November 5, 2023The movement is unstoppable. In the same week, King Charles expresses regrets for the British colonial violence committed in Kenya, and German President Steinmeier apologizes to Tanzania for the atrocities committed by Germans. The question is burning: will European countries now be forced to allocate a portion of their taxpayers’ funds to substantially compensate the…
American Sanctions: A Double-Edged Sword
September 24, 2023Sanctions are a lever frequently employed, certainly because it allows the rulers who use and abuse them to avoid costly armed conflicts. Sanctions represent a kind of “low-cost” warfare. Not quite, in reality, because these retaliatory measures against a state – far from harming its officials – primarily punish the most vulnerable under the yoke…
China: Revolt of the Party’s Elderly Leaders ?
September 7, 2023In Beijing, it’s the revolt of the elderly! Those who have led the Communist Party, these former leaders who presided over and orchestrated China’s rise to power until Xi’s accession, are now demanding accountability. It has recently come to light that they gathered in late August in the Hebei Province, specifically in the coastal city…
China: a shadow of itself
August 27, 2023China has become one of the most expensive countries in the world to raise and support a family. The collapse of consumption and overall living standards is wreaking havoc among young Chinese couples, who now have little motivation to start a family. Chinese fertility is declining rapidly despite the pro-natalist policy adopted by the government…
France is angry, France is hungry
July 5, 2023The flour war in 1775 sparked around 300 riots throughout France and was caused by the state’s abolition of price controls on bread, driven by Turgot’s influence. Turgot, who had elevated “laissez-faire” as an economic principle almost akin to divine law or inherent in natural laws, had not at all concerned himself with the rising…
The Strange Defeat
June 26, 2023Clearly, for Russia, it was a chronicle of an announced debacle. They invaded the largest country in Europe with barely 150,000 soldiers, while the USSR mobilized nearly a million men in 1968 to occupy a country (Czechoslovakia) that represented only one-fifth of Ukraine’s territory and a quarter of its population at that time. Stalin would…
Russia at war with OPEC
June 11, 2023It is necessary to conjugate the striking force of OPEC in the past. This group of countries that used to meet in Vienna, deciding unanimously to reduce their production and using their monopoly to drive up oil prices to the detriment of nations and continents eager to consume it, no longer impresses much. How distant…
All hostages to the imminent US default
May 21, 2023Is it time to doubt the American economy, known for its dynamism? Is its financial system still as resilient in the face of challenges? Is its democratic architecture characterized by the famous “checks and balances” still functional? Not a day goes by without a nation outside its bloc announcing a measure, at the very least…
Islamic Finance: Protects Humanity and Preserves its Morals
May 11, 2023The first “Sharia-compliant” obligation dates back to the Ottoman Empire in 1775. In 2004, Germans were the first Europeans to issue a “sukuk,” an Islamic bond that attracted investors from the Gulf, Saudi Arabia, Malaysia, the United States, Japan, and Hong Kong. This instrument was specifically an “ijarah,” a vehicle that aimed to collect rents…
Europe: a sleeping beauty
April 24, 2023How not to be shocked by the near-economic disappearance of Europe? The “acceleration of the European economy” mentioned by Emmanuel Macron in China this April is a tale that no longer comforts or deceives anyone. Readers: your first electric car will most likely be Chinese, as China has now surpassed Germany as the world’s second-largest…
Is there a way towards economic serenity?
March 29, 2023All the economic parishes agree on the fact that too high debts are harmful. However, they diverge when the profile of the debtor is considered because, while the Austrian school is primarily concerned with public debts, the neo-Keynesians attach much more importance to private sector debts. The classics are indeed indifferent to the debts of…
Is our money still safe in a bank?
March 27, 2023In the CS rescue operation, the Confederation, the SNB and the regulator (Finma) took a decision with serious consequences: to sacrifice Tier 1 bonds, nicknamed “CoCo bonds” or “contingent convertible bonds”. These are hybrid securities between capital and debt, of better quality and which take precedence over equities, a sort of first mortgage. The authorities…
CS: the infernal chronology
March 22, 2023Credit Suisse fines by Year: 2022: $700 million 2021: $280 million 2018: $90 million 2017: $5.4 billion 2016: $240 million 2014: $3.7 billion 2012: $120 million 2009: $536 million 2008: $15 million 2003: $275 million 2002: $350 million Credit Suisse has been fined over 50 times for a total of $11.4 billion since…
UBS + CS = ?
March 19, 2023We live in a great time when Credit Suisse is about to be sold to UBS at 1 billion, when its market capitalization exceeded 90 billion in 2007! In 2022 alone, CS’s stock has collapsed by 75%. This is the period of wild sales because 1 billion would be paid by…
Systemic crisis: the fish always rots from the head
March 8, 2023The stars align. The potential for severe turbulence that will affect both the financial system and the budgetary stability of many States has never been so high. There are far too many indicators that warn of extreme fragility because the addition of corporate, household and government debt continues to worsen. While all of…
Strategy of pain
February 26, 2023Eurozone supercore inflation is at 6.0% and is by no means peaking. In Japan, inflation increased by 4.4% in January compared to January 2022: strongest annual inflationary surge since 1981! In the USA, inflation was at 7% for January, and revised upwards for the 4th quarter of 2022. Very disturbing, these figures show that…