Who still trusts China?
October 14, 2024The Financial Times, through the writing of Eleanor Olcott, its China correspondent, is currently at the center of numerous controversies for publishing a chart showing that the number of start-ups in the country plummeted from 51,302 in 2018 to just 1,202 in 2023! Beyond the heated debate among experts contesting the FT’s sources, it…
Great Britain, a Poor Nation
October 7, 2024Great Britain will be outpaced by Poland by the end of this decade. Once the wealthiest country in Europe for a century, Great Britain’s trajectory has been on a downward slope since the end of World War II. Aside from a brief recovery during the 1980s, at the beginning of the Tony Blair era…
Sanctions: The United States’ ‘Low-Cost’ War
September 28, 2024Between diplomacy and war, sanctions have become the centerpiece of the American arsenal, a fundamental lever in the service of U.S. foreign policy. By cutting off access to the Western economy, sanctions dismantle industries, devastate personal fortunes, and disrupt—often exacerbate—the political imbalances of targeted regimes. All without endangering a single American soldier’s life. …
Unfathomable
September 26, 2024The US public debt stands at 35.3 trillion dollars, or 35,300,000,000,000. If interest rates returned to 0, and the debt was repaid at a rate of one million per hour, it would take until the year 6047, or 4,023 years, to pay it off. The magnitudes are staggering: today we talk about trillions, whereas…
China is at war
September 19, 2024This year, it is exporting 6 million cars to around one hundred countries. As the world’s leading vehicle exporter, its average price is $19,000, lower than that of the United States and Europe. Meanwhile, its Western competitors have no strategy, are swimming in confusion, and are overwhelmed by China’s offensive.
Is Russia bankrupt ?
September 14, 2024Russia has raised its key interest rate to 19%. With inflation and an economy at war, a 19% rate would be -and is- a clear sign of failure for any country.
Japanification of China: The Proof
September 14, 2024Following my recent analysis of what I’ve termed the “Japanification of China,” a crucial milestone has just been reached. For the first time in global economic history, the long-term yield of Chinese Treasury bonds has fallen below that of Japan’s. This is a worrying sign for the Chinese economy, as it indicates that…
European divergences
September 11, 2024Germans work one-third less than in 1970 Prosperity in Switzerland is based on hard work. 2112 hours a year and 20 days of vacation a year. Poland is nothing short of economic wonder. Standard of living in Poland overtaking Spain & Italy within just one generation is simply amazing. One of…
Who spend more: Democrats or Republicans?
September 6, 2024Contrary to popular belief that Democrats are spendthrifts, Republicans, who advocate for fiscal discipline, are actually responsible for a federal deficit (relative to GDP) that is 8.5% higher than when the administration is Democratic. Clinton was the last president to consistently generate budget surpluses.
When the United States Awakens…
September 5, 2024Xi has just committed to supporting 33 African countries with $50 billion over the next 3 years. This historic event is noteworthy for its rarity: the American superpower is allowing itself to weaken and remains passive while China is actively strengthening its influence in Africa. China now holds a dominant position on the continent.…
All Quiet on the Eastern Front…
September 2, 2024Germany’s right-wing party AfD is much stronger in East Germany than in West Germany. The AfD’s vote share in the East is one third of all voters. The shock therapy implemented by previous governments does not seem to have worked… A little reminder : https://michelsanti.fr/en/germany/german-prosperity-a-nightmare-for-40-of-its-citizens
Japanification of China
August 29, 2024Extended periods of deflation, economic stagnation, a declining real estate market, financial pressure and stress impacting households, businesses, and the state. All signals suggesting credible parallels between today’s China and Japan in the 1990s. China risks becoming an aging and heavily indebted country before it becomes a wealthy nation. The Japanese population only…
Black Monday: who is to blame ?
August 5, 2024Collapse of the Japanese Stock Market on August 5, 2024: A 12.4% Drop in a Single Session – The Worst Since the Infamous “Black Monday” of 1987! I see multiple reasons for this: Low Liquidity: The traditionally low liquidity in financial markets during the summer months. Weak Governance: The poor governance by Japanese authorities.…
Contextualizing Venezuela
July 30, 2024In 1989, Venezuela had the same GDP per capita as South Korea. Today, it is 8 times lower. We used to serve Caracas with the Concorde. This immense country had a great future: oil, tourism, agriculture… In 1980, the USA had the same GDP per capita as France. Today, it is twice…
The wars of the Middle East
July 24, 2024“Towards the complicated East, I flew with simple ideas”, Charles de Gaulle.
Tribute to Biden
July 22, 2024The combination of his plans—the Inflation Reduction Act, the CHIPS Act, the Infrastructure Bill—and the activism of his central bank has made him the President who has most transformed the US economy since Roosevelt. The United States has experienced an 8.6% GDP growth since 2019, compared to 0.3% for Germany.
Substantial emptiness, radical tolerance
July 15, 2024This phrase from sociologist Ulrich Beck seems perfectly suited to what we are experiencing today. Extremes have become commonplace, even among those once considered reasonable, who now eagerly jump on the bandwagon of excesses. The “extreme center” itself has been extensively theorized. In a world where moderates are disappearing, democratic practice now systematically…
The return of sick man of Europe
July 13, 2024In an environment where the German economy is extraordinarily energy-intensive, while the dogmatic policies of the Greens dramatically penalize all economic actors, company bankruptcies are reaching record and frightening levels in a Germany that is literally on the path to deindustrialization. Merkel will have many accounts to settle with History.
Collapse of inflation in the United States
July 11, 2024We must pay tribute to the brilliance of the Federal Reserve and its Chairman, Powell.
The Moral Duty of France
July 2, 2024Keynesianism is considered an intellectual blight, its followers viewed as members of a sect seeking the confiscation of property by a necessarily sprawling State. This is a regrettable stance because there was a time when society accepted state intervention to regulate the fundamentals—and often the excesses—of economic actors. Do we prefer to sacrifice our…
Tomorrow, we shall be all japanese
June 30, 2024The Yen is plummeting because Japan is forced to maintain very low interest rates to cheaply finance its debt, which amounts to 250% of its GDP. Allowing Japanese rates to rise would trigger a major crisis with global repercussions. Therefore, the substantial loss in Yen’s value is merely a relief valve, the price to…
Live shipwreck
June 28, 2024Graphical representation of the audience’s verdict from yesterday’s Trump vs. Biden debate, showing who sank like a stone. And it comes from the New York Times!
The ECB: Both a Solution and a Problem for European National Policies
June 24, 2024The European Union is repeating the same mistakes the United States made during the Great Depression of the 1920s and 1930s. Europe needs fiscal stimuli and budget deficits. Unemployment and the decline in purchasing power are not the result of “budgetary indiscipline,” but rather stem directly from weak demand. This lesson from the…
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…