Iron Ore Price CRASHES — China Slows — Precious Metals Not So Precious — Corny Prices — Zuby Wisdom

BOOM ON LAKE ZURICH

IRON ORE COLLAPSES

CHINA SLOWS

This year, BOOM has written often about his expectation for falling commodity prices and the expectation of more falls. Recently, BOOM wrote “As China’s economy slows, it will tend to lower global commodity prices — especially in regard to the key commodity inputs into the Chinese economy.”

Since July 16th, the Iron Ore price has fallen from US $ 222 per tonne to just $ 104 per tonne. BOOM’s stance has been vindicated. That is a price CRASH and BOOM suspects that it will continue as the price of Iron Ore falls towards $ 50 per tonne.

The big iron ore producers will be affected significantly by the China slowdown. BHP, RIO and VALE stock prices in New York have already fallen by 26 %, 20 % and 30 % respectively since mid July. There is a term used in financial markets for this situation — “catch the falling knife”. It can be a dangerous game.

Palladium has also fallen — from its peak of $ 280 in early May to $ 180. As with Iron Ore, BOOM expects further falls will happen as the price heads back towards $ 100.

PRECIOUS METALS UNCERTAINTY

So let’s look at other weak commodity prices.

Precious metals prices have been weak over the last 12 months with buyers remaining unenthusiastic. Prices are again under pressure as far as BOOM can see. The US Dollar price of Gold (Continuous Contract) has fallen from $ 2,100 to the current price at $ 1,750. The US Dollar price of Silver (Continuous Contract) has fallen from $ 30 to just above $ 22. That is a 26 % fall annualized. Yikes. To BOOM’s jaundiced eye, these prices continue to look weak and unattractive.

Platinum has joined the party late. It peaked in February at $ 1,350 and is now at $ 930 — a fall of 30 % in 6 months. If that continues, investors will be looking at 60 % losses during 2021 if they bought at the peak mid February price levels. Yikes again.

The current price dynamics of these precious metals do not look strong to BOOM.

Meanwhile, the US Dollar Index has been trading in a strong sideways range over the last 12 months. US Dollar movement is clearly not the cause of these commodity and precious metals price falls.

CORNY PRICES

The price of Corn doubled from August last year at US$ 350 to $ 700 in May this year. A staggering increase indeed and one of the reasons why some people were predicting a CPI inflation outbreak. But since the peak at $ 700 in May, the price has fallen to just $ 500 and it looks friendless at current levels. BOOM is not confident of buyer interest here.

The Agriculture ETF traded in New york with the code DBA has been trying to continue its stellar rise that began in July last year but has been struggling to rise above $ 19.50 fpr the last 5 months. The strong run looks like it is over. BOOM expects the price to fall from here.

OIL PRICES SHOULD JOIN THE PARTY

With key Chinese input commodity prices falling, precious metals prices falling and food input prices falling or reaching overhead resistance, BOOM is now looking for the price of Oil to weaken and begin a descent. West Texas Light Crude is currently trading around $ 72 per barrel (Continuous Contract). BOOM expects a price range of $ 40 – $ 50 by the end of the year. However, the future is unpredictable because anything unexpected can happen. Unexpected events can play havoc with expectations.

As long term readers will know, BOOM has held the view for some time that CPI inflation threats have been exaggerated. BOOM feels that any CPI inflation in the advanced economies this year (and probably all of next year) is going to be transitory. The Fed in Washington DC agrees.

TWENTY OBSERVATIONS ALL OVER THE NET

The UK-based rapper known as Zuby recently listed 20 observations on Twitter, and his list went viral. His real name is Nzube Olisaebuka Udezue. And his specialty seems to be commonsense.

BOOM especially likes this one — “Access to limitless information has not made the average person any wiser.”

QUOTE:

20 Things I’ve Learned (Or Had Confirmed) About Humanity During The “Pandemic”

1. Most people would rather be in the majority, than be right.

2. At least 20% of the population has strong authoritarian tendencies, which will emerge under the right conditions.

3. Fear of death is only rivaled by the fear of social disapproval. The latter could be stronger.

4. Propaganda is just as effective in the modern day as it was 100 years ago. Access to limitless information has not made the average person any wiser.

5. Anything and everything can and will be politicized by the media, government, and those who trust them.

6. Many politicians and large corporations will gladly sacrifice human lives if it is conducive to their political and financial aspirations.

7. Most people believe the government acts in the best interests of the people. Even many who are vocal critics of the government.

8. Once they have made up their mind, most people would rather commit to being wrong, than admit they were wrong.

9. Humans can be trained and conditioned quickly and relatively easily to significantly alter their behaviors — for better or worse.

10. When sufficiently frightened, most people will not only accept authoritarianism, but demand it.

11. People who are dismissed as “conspiracy theorists” are often well researched and simply ahead of the mainstream narrative.

12. Most people value safety and security more than freedom and liberty, even if said “safety” is merely an illusion.

13. Hedonic adaptation occurs in both directions, and once inertia sets in, it is difficult to get people back to “normal.”

14. A significant % of people thoroughly enjoy being subjugated.

15. “The Science” has evolved into a secular pseudo-religion for millions of people in the West. This religion has little to do with science itself.

16. Most people care more about looking like they are doing the right thing, rather than actually doing the right thing.

17. Politics, the media, science, and the healthcare industries are all corrupt, to varying degrees. Scientists and doctors can be bought as easily as politicians.

18. If you make people comfortable enough, they will not revolt. You can keep millions docile as you strip their rights, by giving them money, food, and entertainment.

19. Modern people are overly complacent and lack vigilance when it comes to defending their own freedoms from government overreach.

20. It’s easier to fool a person than to convince them that they have been fooled.” UNQUOTE

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD
THE BOOM BLOG:
https://boomfinanceandeconomics.wordpress.com/

DAILY Twitter:     @BOOMFinance
https://twitter.com/BOOMFinance

==================================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
================================================

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

THE LAST POST by Dr Geert Van Den Bossche — Unprecedented Global Financial Crisis — IMF Boosts Money supply — All About FLOW

GARDENS BY THE BAY

GEERT VAN DEN BOSSCHE — THE LAST POST

He is a super expert in vaccine development. Some QUOTES: —

“… mass vaccination campaigns may have a beneficial short-time effect ….. but will eventually drive the propagation of more infectious variants.”

“A vaccine that only prevents hospitalizations and severe Covid-19 disease is not good enough to be used to combat a pandemic.”

“There should be no doubt that non-transmission-blocking vaccines (i.e., so-called ‘leaky’ or ‘imperfect’ vaccines) CAN NEVER EVER CONTROL A PANDEMIC, even though they may temporarily protect against disease.”

“The mass vaccination hype will undoubtedly enter history as the most reckless experiment in the history of medicine.”

” … mass vaccination campaigns during a pandemic of highly infectious variants fail to control viral transmission.”

“This IRRATIONAL EXPERIMENT will unambiguously highlight the clear-cut limitations of conventional vaccine approaches.”

” … the mass vaccination program is nothing else but a big experiment. For how much longer is the public going to believe the treacherous narrative?”

“Only a mind that has lost its grasp on reality can fail to see how pathetic all this has become …..”

Link: https://www.geertvandenbossche.org/post/the-last-post

His Detailed CV in Vaccinology:

THE IMF BOOSTS SUPPLY of SPECIAL DRAWING RIGHTS

The International Monetary Fund (IMF) is an international financial institution, headquartered in Washington, D.C., consisting of 190 countries working to “foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world”. It was formed in 1944 well before the end of World War Two at the Bretton Woods Conference attended by the alliance of Nations (the “Allies”) opposed to the Axis nations (lead by Nazi Germany, Italy and Japan).

It plays a central role in the management of balance of payments difficulties (trade and capital settlements) and international financial crises. Member countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had a total of SDR 477 billion (about US$667 billion).

IMF funds come from two major sources: quotas and loans. Quotas, which are pooled funds of member nations, generate most of the IMF’s funds. The size of a member nation’s quota (contribution) depends on its economic and financial importance. Nations with greater economic significance have larger quotas — they provide funds to help nations with smaller economies — in essence and ominously, becoming their bankers. The fund quotas are increased periodically as a means of boosting the IMF’s resources in the form of Special Drawing Rights (SDRs).

On 24th August, Ceyla Pazarbasioglu, Director of the Strategy, Policy and Review Department of the IMF made a Podcast to explain the recent release (or “allocation”) of US$ 650 Billion worth of SDR’s from the IMF to its client nations. She explained that there is a current “unprecedented crisis” in the global financial system requiring the allocation of these new SDR’s.

Special Drawing Rights (SDR), established in 1969, are international reserve assets, used as the accounting unit for IMF transactions with its member countries. They can be transferred for use by individual nations into one of five component national currencies.

There are two things to understand here —

1. what is a Reserve Asset?

2. what (exactly) is an SDR?

What is a “reserve asset”?  Answer – in banking terminology, it is a loan from one bank to another. It can be a loan of currencies, commodities (such as gold), or any other financial capital. The loans are made by the IMF to national client central banks. The subsequent funds can then be used to help finance trade settlements, “smooth” foreign exchange fluctuations or can be used to purchase assets. In other words, the IMF will make such loans if there is some international liquidity problem.

The recent issue of US $ 650 Billion worth of SDR’s was done in order to stimulate more global liquidity to assist in global central bank transactions — presumably because of increased demand or because of a (relative) reduced supply of SDR’s. That may be a good thing in response to an increased demand for trade settlements or a bad thing if reflective of central bank hoarding of SDR’s or an inadequacy of SDR’s in some nations. Take your pick.

It is important to remember, however, that $ 650 Billion is a relatively small amount in terms of global trade settlements which amount to about $ 20 Trillion per year (just for goods). To help with the perspective, $ 20 Trillion is 20,000 Billion.

However, $ 650 Billion is a large amount when compared to the previous balance of SDR’s held by the IMF as it represents almost a doubling of that number. Take your pick. In the Global Financial crisis of 2008/2009, an allocation of just US $ 250 Billion was made to help stabilize the global financial system on that occasion.

Ceyla Pazarbasioglu described this recent “allocation” of SDR’s as “unprecedented” and “the largest allocation ever” in response to the “unprecedented ” global crisis caused by the Covid 19 pandemic. She used the word unprecedented twice in her Podcast. To BOOM that seems significant and possibly unprecedented. She also said that “$ 21 Billion will go to low income countries”. Thus, you can assume that the rest will not.

What is an SDR? — Special drawing rights (SDRs) are foreign exchange reserve assets defined and maintained by the IMF. SDRs are units of account for the IMF, and not a currency per se. They represent a claim to currency held by IMF member countries (and for which they may be exchanged).

Thus, an SDR is a unit of account for the IMF and the world’s central banks. It is made up of five currencies — The value of an SDR is calculated from a weighted basket of major currencies, including the U.S. Dollar 41.73%, the Euro 30.93%, Chinese Yuan 10.92%, Japanese Yen 8.33% and British Pound 8.09%. You can clearly see the dominance of the US Dollar and the Euro (arguably a proxy for the US Dollar).

Interestingly, these relative amounts of currencies that make up an SDR do not reflect the foreign currency holdings of global central banks — US Dollar 58 %, Euro 18.8%, Yen 5.3%, Pound 4.14%, Chinese Yuan 1.89 %.

Clearly, there needs to be much more Chinese Yuan held by central banks to allow more trade settlement in Yuan. That will happen eventually as China progressively settles more trade purchases with Yuan and its currency is correspondingly accepted by other nations. Russia and China are now moving down that pathway more and more as the years go by but other nations will soon be asked to do so as well.

China must move more Yuan offshore slowly but surely to better balance central banks’ foreign exchange reserves. Or find a way to create such funds externally via bank loans created externally and denominated in Yuan. This is the next big monetary trend that must take place progressively over the next 50 – 100 years as the US Dollar loses its dominance and becomes more balanced by Yuan.

THE FINANCIAL CRISIS — ALL ABOUT FLOW

What about the “unprecedented” financial “liquidity” crisis? BOOM has often referred to money as water for a garden. The garden is the real economy of goods and services being transacted daily. If the water flow reduces or stops, then the garden will suffer and may even die.

Paradoxically, the current crisis is not caused by lack of money — there is plenty of money — but it is progressively being trapped and cannot flow. It is trapped in the asset exchange economy where money changes hands infrequently but only from one owner to another when a large pre-existent asset is bought and sold. That money is not in daily circulation. It is not liquid in the real economy. This is all made worse by Asset Price Inflation and the fact that almost all of the money supply in western, “advanced” economies is created as a bank loan collateralized against a pre-existent asset. We need much more money created in a different way. That means more CASH created by the sovereign nations. Yes — despite it being unfashionable, more CASH is the answer to the world’s economic woes.

Currently central banks clearly know this and they are creating more money in Quantitative Easing Programs and injecting it into the real economy but via the asset markets (in purchasing bonds and other financial assets). Stupid. Dumb. The new money needs to find its way into the real economy directly. Physical cash would work but is unwieldy and slow. This is where BOOM’s Quantitative Boosting (QB) solution comes to the rescue — a form of electronic money free of interest costs, in national currency and injected straight into the real economy.

QB Explained

and BOOM’s Perfect Economy

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD
THE BOOM BLOG:
https://boomfinanceandeconomics.wordpress.com/

DAILY Twitter:     @BOOMFinance
https://twitter.com/BOOMFinance

==================================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
================================================

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

CHINA VERSUS RUSSIA

BOOM BOOM VROOM

FOCUS ON CHINA OVER 10 YEARS

The Chinese economy is a mystery to many observers. Many experts continually predict the fall of the Chinese economy. They say it is fragile, that it will collapse due to a heavy burden of debt, that it is too heavily controlled, that it is not open enough, that it “manipulates” its currency.

In 2015, a China “expert” wrote “having been the locomotive for global growth following the financial crisis in 2008, Chinese growth has now slowed and its economy is looking increasingly fragile.” BOOM has lost count of the number of times such sentences have been written by so-called economic experts on the subject of China. Lack of democracy is often referred to as a cause of imminent demise. Other explanations include lack of property rights (especially in intellectual property) and loss of talent to the US. On and on they go, forever predicting the end of the China economic miracle.

And yet, China continues to grow and to provide improved living conditions for its people. Its currency is exactly where it was 10 years ago in relation to the US Dollar. In that same time frame of 10 years, its annual GDP growth has averaged around 7 % p.a. and its GDP per Capita on a Purchasing Power Parity basis (PPP) has doubled — again showing a growth rate of about 7 % p.a. Its annual CPI inflation rate has averaged around 2 %. Its Core inflation rate has averaged 1.5 %. The Minimum Wage has doubled, as has the Average Wage while its unemployment rate has been steady and averaged around 4.5 %.

Exports have doubled in US Dollar terms. Imports have grown but have not doubled, increasing by about 65 %. Tourism revenues have tripled. The Government’s Budget Deficit has averaged around 2 % of GDP. Military expenditures have grown also by 7 % p.a. but are still relatively modest compared to the US. US military spending is estimated to be currently around US $ 750 Billion annually. China’s is estimated to be around US $ 250 Billion.

Business confidence measures are very stable as is capacity utilization. Car production and car registrations are stable. Cement production is stable. Electricity production has doubled. Steel production has doubled.

Consumer Credit has surged fivefold, reflecting a stong growth in consumer confidence. Disposable personal income has doubled. Household debt to GDP has doubled. Gasoline prices have almost halved.

Government Debt to GDP has doubled, again revealing a 7 % p.a. growth rate but is still low by international standards at around 68 % of GDP. Gold Reserves have doubled. Its 10 year government bond yield has averaged around 3.5 % (currently 2.848 % with a positive yield curve right out to the 30 year yield at 3.42 %).

So — it all looks very stable and well managed. Next time you see an article predicting the “imminent collapse of the Chinese economy”, take a deep breath and wonder about the author, not the Chinese economy.

CHINA BOND MARKET

How does China finance its economy? Interestingly, it does so overwhelmingly via new bank loan creation. The annual bank loan growth rate is around 12 % p.a.

The total bond issuance in China is estimated to be around US $ 15 Trillion. The US market is estimated to be US$ 50 Trillion. BOOM regards the Chinese market as not a large domestic bond market in comparison with the US and especially in regard to its population which is around 5 times larger than the US.

Some people point out that China’s bond market is the second largest national bond market on the planet. However, being the world’s second largest market does not make it “large” relative to the US market or its huge population.

China has cleverly avoided bond issuance as a major financing methodology compared to the US, relying instead on the issuance of new bank loans. And that has been a good policy because they seem to appreciate the subtle fact that bond issuance ensures the flow of finance but without any correspondent increase in the supply of new money.

This has become America’s Achilles Heel in regard to financing its economy. The US must wake up to this point. The US economy is being relatively starved of fresh new money via bank loan creation. The size of the US bond market relative to its GDP is the problem. As a result, economic growth is stagnant.

The US bond market is more than twice the size of its GDP. The Chinese bond market is approximately equal to its GDP. Therein lies the problem for the US. They need more fresh new money via well regulated bank loan creation and, especially, via new cash issuance.

They must stop their obsession with bond issuance.

By the way, Japan’s Bond Market is around US$ 13 Trillion (with a population of less than one tenth that of China). The Emerging Markets nations combined actually have a total bond issuance of more than $ 15 Trillion. That is more than Chinese bond issuance.

THE RUSSIAN ECONOMY OVER 10 YEARS

Let’s take a look at the Russian economy. Over the last 10 years, its currency has depreciated steadily in relation to the US Dollar (halved). In that same time frame of 10 years, its annual GDP growth has averaged around 2 – 3 % p.a. over the last 10 years but its GDP per Capita on a Purchasing Power Parity basis (PPP) has barely increased, which means its people have not seen any large improvement in living conditions. Its annual CPI inflation rate has averaged around 6 – 7 %. Its Core inflation rate has also averaged 6 – 7 %. The Minimum Wage has tripled while the Average Wage has doubled. Its unemployment rate has been steady and averaged around 5.5 %.

Exports have halved in US Dollar terms (bear in mind the currency has depeciated by a similar amount). Imports have been relatively stable in US Dollar terms. The Government’s Budget Deficit has averaged around 1.5 % of GDP. Military expenditures have grown marginally from around US$ 50 Billion p.a. to about US$ 65 Billion but are still modest compared to the US and China. As previously noted, US military spending is estimated to be currently around US $ 750 Billion annually while China’s is estimated to be around US $ 250 Billion.

Business confidence measures are moribund as is capacity utilization. Car production has fallen marginally. Total vehicle sales have fallen by about 20 % in total. Cement production is stable. Steel production has increased by about 20 % in total annual production, revealing poor growth in industrialization and construction.

Consumer Credit has surged fourfold but consumer confidence has fallen significantly. Household debt to GDP has doubled. Gasoline prices have fallen by 40 %.

Government Debt to GDP has doubled, revealing a 7 % p.a. growth rate but it is still very low by international standards at around only 18 % of GDP. Its 10 year government bond yield has averaged around 8.5 % and is currently 7.03 % — reflecting the weakness of the currency over time.

COMPARISON

If you compare the Chinese economy and the Russian economy over the last decade, it is clear that the management of the Chinese economy is far superior to that of the Russians. Russian living conditions are not rising anywhere near as fast as those of the Chinese people. China has the advantage of a large manufacturing sector while Russia has abundant energy and commodities. Both nations should work together more closely to take advantage of their respective economic strengths. But that is easier said than done. Perhaps the Belt and Road strategy being adopted by China as it moves its industrial focus more towards the west geographically will benefit Russia over the next decade. However, Russia must grasp this opportunity or else it may find increased prosperity for its people to be an illusive goal.

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD
THE BOOM BLOG:
https://boomfinanceandeconomics.wordpress.com/

DAILY Twitter:     @BOOMFinance
https://twitter.com/BOOMFinance

==================================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
================================================

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

China Total Social Financing Declines — The Lumber Crash — TIMBERRR (!) — US Consumer Confidence Crashing — US DEFICIT Over $ 3 Trillion — The Vaccines Have a Problem

BOOM ON THE BAY

CHINA TOTAL SOCIAL FINANCING

Over the years, BOOM has often referred to the higher level of sophistication in macro money management in China compared to western “advanced” economies. Loans from Banks and loans from Shadow Banks in China are in close synchronicity over the years — one rises while the other falls and vice versa. It is like a well choreographed dance. This allows for a dual money supply system. When the central bank wants commercial bank loan growth to fall, it allows riskier shadow loans to rise and vice versa. This is extremely clever way to manage the money supply to the real economy, smoothing out the ups and downs and creating a reliable stability of money stock and money supply. China does not have a large domestic bond market. Thus capital does not get caught up in the round robin of funding governmental, municipal and corporate bond issuance.

These dynamics give China a huge advantage over the “advanced” economies such as the US. What they do is only possible in a centrally controlled economy. BOOM is not a proponent of that but , in the West, the economies are almost totally exposed to the swings and roundabouts of fresh new money supply generated by new bank loans. Thus, in the so-called “advanced” economies, we are always exposed to the need for emergence of new borrowers in the private sector to keep our money stock from falling as old bank loans are paid off. This is why we are so dependent upon interest rate settings from the central banks which set the short term interest rates while leaving the 10 – 30 year rates to the market. There is an endless uncertainty about what the central banks will or won’t do. And this drives fear which is the arch enemy of a stable economy.

In China, stability is the goal and, thus, households and businesses can rely on a steady money stock situation (and growth) from year to year.

BOOM wrote about stability in the money stock last week in regard to the 1950’s and 1960’s when the West had no choice but to rely on the supply and circulation of large quantities of physical cash. Because cash is non-interest bearing and can be issued by the Treasury directly into the real economy, it can have a soothing effect on the swings and roundabouts of money supply. We need to learn that lesson again in the advanced economies.

At present in China, the money supply from the Shadow Bankimg system is in decline since late 2020. In that same time frame, the money supply from the official, commercial Banking system is rising but, notably, it is not rising as fast as the shadow supply is falling. Thus, this will, inevitably, cause a relative slowing in the real economy. And that is exactly what we are seeing. The China Economic Activity Index has fallen from above 55 in October 2020 to 52.4 in July this year.

As China’s economy slows, it will tend to lower global commodity prices — especially in regard to the key commodity inputs into the Chinese economy. The recent falls in Iron Ore prices are indicative of that. The Chinese economy is now the engine of global growth so we will see a knock-on effect globally.

THE LUMBER CRASH — TIMBER (!)

The price of Lumber in the US has fallen dramatically since its peak on May 10th. The Continuous Futures Contract has fallen from around $ 1700 on that date to just $ 500. It is now back inside its trading range over the last 5 years.

Prices for Iron ore, wheat, corn, palladium and copper have all stalled or peaked around May 10th. The price of oil has been more resilient but BOOM expects it to weaken in the near future. The outlier at present is Natural Gas. Its Futures prices continue to rise. However, BOOM expects that to end soon. Some brave souls will try to pick the top and buy Puts to ride the roller coaster down.

Commodities are simply returning to Earth after a bizarre surge towards heaven. China will not pay higher prices and will certainly not pay absurd prices for its key inputs.

US CONSUMER CONFIDENCE CRASHING

Meanwhile, US Consumer Confidence as measured by the University of Michigan has crashed to its lowest point in 10 years. The chart looks terrible. Take note.

US DEFICIT OVER $ 3 TRILLION

Also meanwhile, the US Congressional Budget Office says the Federal Budget Deficit for the 2021 budget year, which ends in September, will exceed $ 3 TRILLION. That is the gap between Taxation Revenue and Government Expenditure. The US economy is effectively being kept alive with this deficit spending which is supposedly a “temporary” measure.

THE VACCINES HAVE A PROBLEM

The wheels are rapidly falling off the “vaccines are our salvation, our ticket to freedom” argument that is being pushed so forcefully by many governments and mainstream media in many nations. There is the smell of desperation now wafting around the world as the truth is slowly but surely emerging. The idea that economic recovery will follow mass vaccination appears to be deeply flawed.

It is becoming clear that the Covid vaccines are “leaky”. They do not stop the vaccinated from acquiring the virus (in particular, the now dominant Delta variant) and they do not stop them transmitting the virus. A leaky vaccine is one that lacks sterilizing immunity. It may prevent severe infection and perhaps death, but it does not stop infection and colonization by the virus. In this situation, the vaccinated become carriers, unaware of it and therefore, they can easily spread it to others. This also makes the virus more likely to become endemic. In other words, the vaccines mean that elimination is a false goal.

The famous French vaccinologist, Professor Christian Perronne recently said “Vaccinated people are at risk of the new variants. In transmission, it’s been proven now in several countries that vaccinated people should be put in quarantine and isolated from society. Unvaccinated people are not dangerous; vaccinated people are dangerous to others.

Also, the vaccinated are now sometimes falling seriously ill with the Delta Variant and ending up in hospital. Luckily, deaths are not usually as common as with the Alpha variant. But that is not guaranteed. Israel is the test case where 80 % of the adult population over 20 years of age are vaccinated. Right now, 80 – 95% of new cases there are fully vaccinated (depending upon age bracket). Daily new case numbers have surged to 10,000 per day which is the same level as Israel experienced in its first two waves in September 2020 and January 2021. Worryingly, deaths per day numbers attributed to Covid are also presently rising towards the levels seen in those first two waves.

In Iceland, the most heavily vaccinated nation, the new cases of Delta variant are emerging at rates higher than the two first waves. So the extensive vaccination programs there have clearly failed to stop the virus. More and more, it is looking like the vaccinated are (possibly) driving the emergence of the Delta variant.

Thankfully, total death numbers from all causes in Israel are still in the normal range — so there is still no Pandemic of Excess Death occurring.

The word “pandemic” has been massively abused over the last 18 months by health authorities, governments and the mainstream media. It has been used to instil fear and panic with the aim being control — total control.

A PrePrint study published on August 10th in the prestigious medical journal, The Lancet, has shown that 69 healthcare workers in a large infectious diseases hospital tested positive for SARS-CoV-2. All recovered uneventfully. They were all infected with the Delta variant, and tests were …. “suggestive of ongoing transmission between the workers. Viral loads of breakthrough Delta variant infection cases were 251 times higher than those of cases infected with old strains detected between March-April 2020“.

The study involved a small group of workers so this is a very early report and should not be relied upon. A larger study involving up to a thousand health workers would be much more meaningful statistically.

The conclusion of the study was: “Breakthrough Delta variant infections are associated with high viral loads, prolonged PCR positivity, and low levels of vaccine-induced neutralizing antibodies, explaining the transmission between the vaccinated people.”

Please note that these preprints are early stage research papers that have not been peer-reviewed. The findings should not be used for clinical or public health decision making and should not be presented to a lay audience without highlighting that they are preliminary and have not been peer-reviewed.

The Preprint is available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3897733

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD
THE BOOM BLOG:
https://boomfinanceandeconomics.wordpress.com/

DAILY Twitter:     @BOOMFinance
https://twitter.com/BOOMFinance

==================================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
================================================

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

Central Bank Digital Currencies — Electronic Cash — BOOM’s Quantitative Boosting Solution — Stunning Covid Article

BOOM FINANCE AND ECONOMICS

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BOOM seeks out the very best information from authoritative sources and strives for consistency in its quality and trustworthiness. In evidence of this, BOOM has developed a loyal readership which includes many of the world’s most senior economists, central bankers, fund managers and academics. We strive to always have good relationships with our readers. If you want a real edge in understanding the complex world of finance and economics, subscribe to BOOM as a Follower on LinkedIn or as a Subscriber (Free) to the BOOM Newspaper at http://boomfinanceandeconomics.com/#/

THIS WEEK’S EDITORIAL

CENTRAL BANK DIGITAL CURRENCIES

ELECTRONIC CASH

The major central banks of the advanced economies have been making waves by occasionally talking about CBDC’s — Central Bank Digital Currencies. The subject stirs great suspicion and consternation amongst people who are concerned about central bank power. They are fearful that the central banking system will thus be able to track all transactions and exert social control systems over them. They seem to overlook the fact that the commercial banking system already has that power.

Of course, these discussions are actually misleading from both sides. Why? Because national currencies are already digital and have been for many decades. And central banks do not issue currencies — they borrow or loan funds denominated in their respective national currencies based upon ledger entries with their client commercial banks and their client governments. Or they buy and sell assets with their client commercial banks and their client governments. Sometimes, they are the lender of last resort and sometimes they are the borrower of last resort — but all of their direct actions are ledger based in the arena of banking and government where they are dealing in so-called “Reserve Assets” and “Reserve Liabilities”. The ledger entries are of course denominated in the national currency as a matter of convention. A global digital currency already exists which is used to settle most international transactions. It is called the US Dollar.

An individual or a corporation, in most nations, cannot hold an account with a central bank. Central banks do not trade with the real economy. Most of their actions are aimed at either boosting liquidity (money flow) or restricting it in the banking sector. The aim of such actions is to slow or speed the real economy via either restricting credit demand or boosting it in response to the threat (or otherwise) of CPI inflation. Sometimes, they are busy protecting their client commercial banks when they get into trouble with poor loan books and increased loan defaults. They can arrange for increased liquidity to these banks for a while but if a bank’s loan book is beyond repair, then they can arrange their rescue via a takeover from another larger bank. Total bank failures are now a rare event as the central banks come to the rescue and cover up the situation — preferably before anyone in the general public becomes aware of what is happening.

Central banks also attend to the demand and supply of their national currency in the global foreign exchange markets. Again, they do this by buying and selling assets denominated in national currencies or by buying and selling foreign exchange derivatives.

So — back to CBDC’s — central bank digital currencies. These are essentially efforts by central banks to create electronic forms of non-interest bearing cash. BOOM thinks that is a worthwhile cause but BOOM also thinks that the very nature of central bank activities precludes this from occurring (hopefully).

Sovereign governments issue cash which is non-interest bearing money. But the other glory of cash is that no borrower is required for its issuance. It can be created by the sovereign or the state as and when required. And it can be recalled from the banking system as and when required.

Currently in the most advanced economies, the money stock (money in existence) is in the form of credit money (bank loan created) and cash. Credit money is 98 % of the money stock and Cash is 2 %. This is a ridiculous situation. In the post World War Two era from 1945 to 1965, the cash component was far, far greater. This allowed vast quantities of cash to circulate in the real economy. And that money had no interest cost attached to it. Thus, it was used for the settlement of many, many transactions. During those “golden years” the average citizen and average family was not as enslaved by debt as they are today.

In the US, for example, the CPI inflation rate from 1955 – 1970 averaged about 1 – 2 % annually. It was incredibly stable. In August 1971, the US President Nixon released the Dollar from the Gold price and allowed it to “float”. The US commercial banks were finally allowed to create credit in response to demand for loans not linked to a static price of Gold. And Credit Money as a percentage of the total money stock began to rise and rise. As a result, the volume and circulation of cash began to fall in relative terms. Credit cards also contributed to this. The era of Credit Money had begun in earnest.

Initially, the CPI inflation rate in the US fell. But by early 1972, it started to rise to a peak of 12 % p.a. in 1975. It then fell again but started rising again in 1977. And it rose to a peak of 15 % annualized in 1981. That was the peak of CPI inflation in the US. It fell sharply after that because the central bank raised the overnight interest rate to 20 %. That is called the Federal Funds rate for money loaned to banks overnight.

Since then we have never come close to such high CPI inflation rates and overnight rates. CPI inflation was tamed. Credit Money Madness had been unleashed.

However, the era of “golden prosperity” was long forgotten. The huge contribution of interest free cash to social cohesion and financial stability was also forgotten. The mad rush to bank created credit money had begun and there appeared to be no turning back. Banks led the charge, of course, because they could see great profit opportunities in the expansion of their loan books as they rode the demographic wave of the Baby Boomers into the future.

This all worked (reasonably) well until 2008 when the Global Financial Crisis occurred due to an apparently sudden severe loss of confidence between banks and the failure of some major banks in the US, especially some of the Primary Dealer Banks which were supposedly the strongest commecial banks of all. The sudden dramatic failure of Lehmann Brothers bank was the event that sent shock waves around the world. Bear Sterns bank and stock brokerage also failed. Suddenly, the US central bank looked vulnerable and arguably incompetent. They had failed to see what was coming and had failed to repair it ……. or perhaps they had engineered it? Nobody knows for sure.

Since 2008, the advanced economies have been struggling to grow essentially because of a relative decline in willing borrowers and credit money growth. Central banks have tried to create CPI inflation without much success. Government taxation revenues have been adversely affected and budget deficits have inevitably grown because taxation revenues could not match government expenditure programs. Central banks have come to the rescue with their Quantitative Easing Programs providing huge amounts of funds in return for government issued bonds. The governments have dutifully spent this central bank money and held their economies from collapse.

This has led to some “stability” in the financial system since 2009 and in economic growth trajectories. But this has all been mediated via the asset markets — especially the bond markets. And that “stability” has been won at the cost of Asset Price Inflation. That asset price inflation has led to huge social inequalities and the accumulatuion of wealth into fewer and fewer hands.

It is now time to return to the 1950’s and the 1960’s. We need MUCH MORE CASH to be circulated through our real economies. The central banks seem to understand this (especially in China) and they are taking steps to remedy the situation. BOOM has been strongly suggesting this for some years now. But a return to physical cash in large volumes is impractical. Hence the talk of central bank electronic cash — CBDC’s (central bank digital currencies).

This is fraught with difficulty. As I have pointed out, central banks are actually not in a position to issue large amounts of Cash to the real economy. So the move towards CBDC’s appears to be a pipe dream.

BOOM’s QUANTITATIVE BOOSTING SOLUTION

BOOM’s solution is called Quantitative Boosting QB (as opposed to Quantitative Easing, QE) and it is actually rather simple. It does not require the issuance of any “new” currency. It uses the national currency and the ledgers in existence of the commercial banks, the central banks and the Treasury department of governments.

A Tripartite Pre-Agreement is required between those three parties where they agree to expand all of their balance sheets in the creation of increased Reserve Assets at the Commercial Banks in loans to the Central Bank. The resultant funds are then loaned to the Treasury (that loan becomes a Reserve Asset of the central bank). The funds are then spent by the Treasury into the real economy and they (inevitably) end up as Deposits in the Commercial Banks. Thus, the funds are created by the Commercial Banks, loaned to the central bank and then subsequently loaned to the Treasury. Then they are returned to the Commercial Banks in the form of Deposits. It is effectively a Closed Loop system.

The other essential element of Quantitative Boosting in the Tripartite Pre-Agreement is the agreement to not charge interest on the loans from the commercial banks and the loans from the central bank. Such Pre-Agreement can also include an agreement to forgive the capital payment at loan maturity or to transfer the loan period to Perpetuity.

The only foreseeable problem with QB is that the money created this way cannot be destroyed and must be permanent in nature. Bank loans, by contrast, usually destroy money as they are paid off. And Cash is destroyed as it is recalled and re-issued. The permanence of such interest free money, however, should not be a problem as long as it does not generate out-of-control CPI inflation. The interest free money created under QB will continue to circulate in the real economy, providing much needed stability and utility.

Social cohesion should eventually occur as the society uses the interest free electronic cash over and over again. Its volume in the money stock relative to Credit Money could theoretically rise to 50%.

STUNNING COVID ARTICLE

Last week an interview with Professor Christian Perronne was published. He is arguably France’s most highly rated expert in viral diseases and vaccines. The interview is stunning in its clarity and in its messages. BOOM recommends it highly. The transcript of the interview is available at the link. He states that current government Covid policies are stupid and unethical.

He also says  “Vaccinated people are at risk of the new variants. In transmission, it’s been proven now in several countries that vaccinated people should be put in quarantine and isolated from society.

Unvaccinated people are not dangerous; vaccinated people are dangerous to others. That’s been proven in Israel now, where I’m in contact with many physicians. They’re having big problems in Israel now: severe cases in hospitals are among vaccinated people.”

“….. lockdown was completely useless

PCR tests are much more amplified, and so we have many, many false positive results.”

And finally  “….. we cannot reach herd immunity through vaccination.”

Link: https://www.ukcolumn.org/video/frances-long-time-vaccine-policy-chief-covid-policy-is-completely-stupid-and-unethical

==============================================================

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD
THE BOOM BLOG:
https://boomfinanceandeconomics.wordpress.com/

DAILY Twitter:     @BOOMFinance
https://twitter.com/BOOMFinance

==================================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
================================================

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

Hyperinflation — Halt Mass Vaccination — Israel Covid Crisis — Crypto Crime Again

BOOM FINANCE AND ECONOMICS

Testimonials:

“Reading BOOM is the best 10 minutes I spend every week. It keeps me informed, being full of true information, and keeps me motivated”  — Peter Underwood – ‘Austrian Peter’ — UK Correspondent for The Burning Platform
  

BOOM seeks out the very best information from authoritative sources and strives for consistency in its quality and trustworthiness. In evidence of this, BOOM has developed a loyal readership which includes many of the world’s most senior economists, central bankers, fund managers and academics. We strive to always have good relationships with our readers. If you want a real edge in understanding the complex world of finance and economics, subscribe to BOOM as a Follower on LinkedIn or as a Subscriber (Free) to the BOOM Newspaper at http://boomfinanceandeconomics.com/#/

THIS WEEK’S EDITORIAL


HYPERINFLATION IN LEBANON

Yet another Hyperinflation event is underway. This time the target nation is Lebanon. As in all Hyperinflation events, it is not really about rising prices. It is about currency collapse or, perhaps it is more accurately described as currency confidence collapse — CCC.

A Hyperdeflation in one currency always occurs in tandem with the hyperinflation in the national currency. So Hyper-Deflations and Hyper-Inflations go hand in hand.

During Hyperinflation events, the people abandon their local, national currency due to lack of confidence in both the economic future of their nation and their political class. They switch to any readily available alternative currency. So such an alternative currency must already be in circulation as a pre-requisite condition.

And that alternative currency must be generally accepted by the bulk of the people as settlement of daily transactions, especially after confidence collapses. The US Dollar is usually the candidate available to swap into because it is in circulation in many nations and is tolerated (amazingly) by many national governments — presumably due to corruption of the political class at the highest levels. Such events are impossible in nations which control their borders well and who strictly ban the use of alternative currencies.

Some will say — “this is due to excessive money printing”. But that cannot be right. The pre-condition of an alternative currency must always be fulfilled. Let’s look at the world’s champion money printer — Japan – where only the Yen is tolerated.

Their central bank Balance Sheet has increased 7 fold over the last 20 years. Their M1 Money Supply, their M2 Money Supply and M3 have only doubled. Their total of Loans to the Private Sector has only increased by 25 % since 2005 — in 15 years. Their annual growth in bank loans has been moribund.

Thus, you can see that their money supply growth has pretty much come from their central bank over that period and not from commercial bank loan creation or from cash issuance. And, notably, there has been no CPI inflation over the last 20 years with the inflation rate averaging ZERO. There has been no currency collapse either with the Yen averaging around 110 to the US Dollar.

Of course, many Yen have been destroyed in that period with bank loans being paid off. And the population has progressively aged as well while their total GDP has not grown much at all in transaction volumes. All of those circumstances will create dis-inflation (falling CPI inflation rates) or deflation (negative CPI inflation rates).

From this comparison, we can see that money supply, money destruction, demographics and confidence are a complex mix. Sustained high CPI inflation cannot be easily constructed purely by “money printing” and cannot easily morph into a hyperinflation event. A corruptible and/or incompetent political class which tolerates alternative currencies to circulate is perhaps the most essential element.

The dominance of the circulating US Dollar over the national currency is illustrated in this passage from a recent DW article. That dominance is destroying the economy and the nation.

QUOTE: “People who have access to US dollars, either from the outside or from the inside through the black market, are able to live a lifestyle beyond their original means,” Bassel Salloukh, a political scientist at the Lebanese American University in Beirut, told DW.”

“However, few people have access to “fresh cash,” or money that hasn’t been invested before, and in Lebanon’s particular case, it also means the transfer of US dollars from abroad. For example, those who rent apartments. The currency is in such high demand that most property owners demand rent in dollars — and that’s forcing many tenants to move out.” UNQUOTE

Source: https://www.dw.com/en/lebanon-dollars-shield-some-from-hyperinflation-crisis/a-58843383

HALT THE MASS VACCINATION PROGRAM

Geert Van Den Bossche is a Vaccinologist — an expert in the world of vaccines and vaccine Development. He has been Head of the German Vaccine Development Office at the German Centre for Infection Research (DZIF) and also Senior Program Officer, Global Health, Vaccine Discovery at the Bill & Melinda Gates Foundation (BMGF). He was also Director, Research Program Leader and Head of Adjuvants for Novartis Vaccines & Diagnostics. And Head of Adjuvant Technologies and Alternative Deliveries, R&D at GlaxoSmithKline Biologicals.

He states that “Mass infection prevention and mass vaccination with leaky Covid-19 vaccines in the midst of the pandemic can only breed highly infectious variants“.

In his latest article, also published on his website, he says “This first critical step can only be achieved by calling an immediate halt to the mass vaccination program and replacing it by widespread use of antiviral chemoprophylactics while dedicating massive public health resources to scaling early multidrug treaments of Covid-19 disease.”

And “the ongoing universal mass vaccination program will soon promote dominant propagation of highly infectious, neutralization escape mutants (i.e., so-called ‘S Ab-resistant variants’), naturally acquired, or vaccinal neutralizing Abs, will, indeed, no longer offer any protection to immunized individuals whereas high infectious pressure will continue to suppress the innate immune defense system of the nonvaccinated. “

There can be no doubt that resistance to vaccinal Abs will be the endpoint of any mass vaccination program that uses modern vaccines during a pandemic of an acute self-limiting viral disease caused by a highly mutable virus. Contrary to live vaccines, vaccines produced by modern vaccine technologies fail to induce sterilizing immunity.

Abs is short hand for Anti-bodies. Vaccinal Abs means antibodies produced by such vaccines.

Those are chilling statements to anyone closely following the huge campaigns by the mainstream media and many governments to lockdown populations and insist upon mass vaccinations with the new technology mRNA Covid vaccines (never before used on humans) and the Viral Vector alternatives.

This article was published by him just last week.

Link: https://www.geertvandenbossche.org/post/c-19-pandemia-quo-vadis-homo-sapiens

and https://www.geertvandenbossche.org/

ISRAEL MUST OPEN MORE HOSPITALS

Despite being the most fully vaccinated nation of size on Earth, Israel is now seeing a worrying surge in Covid Cases. The nation has seen new case numbers skyrocketing in recent weeks from a few dozen a day to over 6,000 last Monday with another 5,755 diagnosed on Tuesday. New case numbers are already at half the levels that were seen in the first and second waves that occurred in September 2020 and in early 2021. Remember that in Septermber 2020, there were ZERO vaccinated.

Israel is about to embark on an urgent effort to expand hospital capacity after being presented with numbers showing that hospitalizations from new Covid Cases are likely to quadruple by mid-September.

It has been reported that they are hiring 100 more doctors, 500 nurses and 200 paramedical and support staff every 10 days to cope with the disease Tsunami coming their way. The new technology vaccines and their mass vaccination campaigns have clearly not provided the protection that was expected. BOOM is not surprised as the Absolute Risk Reduction provided by these vaccines is only in the range 0.7 % – 1.3 %.

Link –https://www.timesofisrael.com/health-officials-predict-thousands-of-seriously-ill-covid-patients-within-month/

From BOOM’s editorial dated 21st March this year —

On 26th February, the peer reviewed medical journal, Medicina, published an article by Dr Ronald Brown from the University of Waterloo, Canada. Dr Brown’s paper, titled “Outcome reporting bias in COVID-19 vaccine clinical trials” is also listed in the U.S. National Library of Medicine of the National Institutes of Health.

Unreported absolute risk reduction measures of 0.7% and 1.1% for the Pfzier/BioNTech and Moderna vaccines, respectively, are very much lower than the reported relative risk reduction measures. Reporting absolute risk reduction measures is essential to prevent outcome reporting bias in evaluation of COVID-19 vaccine efficacy.”

Dr Brown’s conclusion should rattle the entire planet —

Such examples of outcome reporting bias mislead and distort the public’s interpretation of COVID-19 mRNA vaccine efficacy and violate the ethical and legal obligations of informed consent.”

Source Links: https://www.mdpi.com/1648-9144/57/3/199 and https://pubmed.ncbi.nlm.nih.gov/33652582/

CRYPTO CRIME REPORT

More crime was reported in the world of Crypto during the week with a $ 600 Million heist.

Ho Hum — just another day in the Wild Wild West of Crypto.

The size of the theft was comparable to the $530 million in digital coins stolen from Tokyo-based exchange Coincheck in 2018. The Mt. Gox exchange, also based in Tokyo, collapsed in 2014 after losing half a billion dollars in bitcoin.”

Link: https://www.reuters.com/technology/defi-platform-poly-network-reports-hacking-loses-estimated-600-million-2021-08-11/

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)
THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

Prof. Werner brilliantly explains how the banking system and financial sector really work. – YouTube


How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

Covid Vaccines May not be Safe OR Effective — Swedish Economy Robust — Gold and Silver Under Pressure

THE COVID VACCINES MAY NOT BE SAFE OR EFFECTIVE

The current dominant narrative that “the vaccines will save us … and the economy will therefore recover” is an assumption. If it is true, then the economic future may well be bright. But if it is false, then the economic future will have to be re-assessed. False assumptions result in false conclusions.

BOOM has been a fan of Gail Tverberg and her Blog “Our Finite World” for many years. She has a strong following because she consistently writes excellent articles on economics and energy. But this week she has produced a review of the so-called Covid “vaccines”. Her article is called “Covid Vaccines Don’t Really Work as Hoped”. It is one of her finest efforts.

These injectables are much loved by politicians even though they are clearly far from ideal products. Along with the mainstream media, they continue to promote them ceaselessly by repeatedly calling them “safe and effective”. This statment is never qualified which implies that the products are 100 % safe and 100 % effective. However, many experts believe them to be far from safe and not very effective. In the clinical trials conducted in late 2020, for example, they produced absolute risk reductions of only 0.84 % – 1.3%. That means that they are hardly worth considering as society-wide preventive strategies against Covid 19. Relative risk reductions are used (frequently) to describe their effectiveness as “95%” but this is a mis-leading and fraudulent statement.

The truth concerning Covid vaccine effectiveness is being revealed in Israel, the most fully vaccinated nation of size. A BOOM correspondent described the situation beautifully — “the wheels are coming off in Israel, the most vaccinated country on Earth”.

He was referring to a statement by Dr Kobi Haviv, the director of the Herzog Hospital in Jerusalem. Herzog is the third largest hospital in the city. It specializes in care for the elderly. Dr Haviv stated that:

“95% of the severe patients are vaccinated

85-90% of the hospitalizations are in Fully vaccinated people

We are opening more and more COVID wards

The effectiveness of the vaccine is waning/fading out”

His statement deals with the lack of effectiveness that is becoming rapidly apparent in his hospital after only 6 months in a nation where the majority of adults have been vaccinated with the Pfizer jab.

In fact, in the general Israeli community, government stats reveal that 80 – 90 % of new Covid cases have also been fully vaccinated.

He did not comment on the lack of safety which is revealed in the Adverse Events Reports coming in to official government statistics from the US, Europe and the UK.

As of July 21st, the Total Deaths following Vaccination reported by families in those regions amount to 34,052. Total Vaccine Injuries Reported amount to almost 5.5 Million.

According to many studies, these numbers generated by self reporting systems probably represent somewhere between 1 – 10 % of the actual total. So we could be looking at 340,000 deaths or, worst case, perhaps 3.4 Million deaths. The worst case scenario for injuries could be 500 Million. These are staggering numbers to contemplate, especially if these products are not as effective as promoted.

If the vaccines are not effective after just 6 months and if their adverse event rate is being under-reported, then we have a two fold problem, both of which will make the economic future worse, not better. We could well be faced with more resistant variants of the virus combined with a large number of citizens incapacitated by death and chronic illness.

If, as some say, both the virus and the vaccines are effectively Bio-weapons delivering pathogenic Spike Proteins and Spike Protein fragments, then they are certainly the most effective Bio-weapons imaginable with the potential of damaging economies on a grand scale, not just once but permanently. The result could be a Tsunami of death and disease overwhelming hospitals and their medical staff simultaneously. The military forces could also become incapacitated and unable to effectively defend their respective nations.

So the possibility of the vaccines not being safe and not being effective must be seriously considered.

Read Gail’s article — here is the Link:

https://ourfiniteworld.com/2021/08/05/covid-19-vaccines-dont-really-work-as-hoped/

SWEDISH ECONOMY ROBUST

Ever since the Covid 19 phenomenon began, one nation has chosen common sense as the best policy setting. That nation is Sweden. They have not had strict lockdowns, mandated masks or rigid social distancing. They have tried to get on with life using the best judgement of their people. This is the opposite approach taken by many other advanced economies where Totalitarian “solutions” have been adopted.

So what has happened to the Swedish economy? Measured in GDP numbers, it has barely been affected over the time period. The moderate economic recession of 2020 has been completely reversed in 2021. In fact, its economy has now resumed economic growth. The economy is now bigger than its pre-pandemic size.

Its annual CPI inflation rate is low around 1.3 %. However, its unemployment rate is around 10 %. The good news is that business confidence is surging higher to record levels and consumer confidence is strong. Its stock market is roaring higher.

And what about the “horrible pandemic”, the “killer virus”, the “delta strain”? The Daily Death rate attributed to Covid is now close to Zero.

GOLD AND SILVER UNDER PRESSURE

On Friday, the US Dollar prices of Gold and Silver got hammered. Gold dropped 2.5 % on the day and Silver dropped 3.35 %. Over the last 12 months, Gold is clearly in a downtrend channel and Silver is trapped in a trading range with recent weakness suggesting the beginning of a downtrend. Platinum has been falling since March and fell ominously by 7.7 % on Friday.

It seems that investors cannot find any strong reason to buy these precious metals in present circumstances. Asset Price inflation is probably the strongest deterrent. Real estate and stocks are the place to be. Even Bonds are doing well lately, rising steadily in price since March.

Over the last 12 months the US Dollar index has effectively traded in a sideways range. So the weakness in precious metals prices cannot be explained by a stronger Dollar.

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://


How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

GLOBAL ECONOMIC REVIEW — COVID OUTBREAK IN VACCINATED INDIVIDUALS — CHANGES TO CDC PCR TEST FOR SARS-CoV2 to DIFFERENTIATE BETWEEN SARS-CoV2 and INFLUENZA VIRUSES

BOOM FINANCE AND ECONOMICS

Testimonials:

“Reading BOOM is the best 10 minutes I spend every week. It keeps me informed, being full of true information, and keeps me motivated”  — Peter Underwood – ‘Austrian Peter’ — UK Correspondent for The Burning Platform
  

BOOM seeks out the very best information from authoritative sources and strives for consistency in its quality and trustworthiness. In evidence of this, BOOM has developed a loyal readership which includes many of the world’s most senior economists, central bankers, fund managers and academics. We strive to always have good relationships with our readers. If you want a real edge in understanding the complex world of finance and economics, subscribe to BOOM as a Follower on LinkedIn or as a Subscriber (Free) to the BOOM Newspaper at http://boomfinanceandeconomics.com/#/

THIS WEEK’S EDITORIAL

GLOBAL ECONOMIC REVIEW

The Covid 19 epidemic continues to have a huge economic impact during the first half of 2021. Economic recovery after the global recession of 2020 has generally been swift but the unknown now is whether or not that recovery will be sustained, leading to continued economic growth.

Globally, there is poor economic growth, static or falling CPI inflation (dis-inflation), outright deflation, poor wages growth and poor credit demand in the advanced economies ever since the Global Financial Crisis in 2008.

During the last 12 months, global central banks in the advanced economies have continued to expand the money supply with Quantitative Easing Programs buying large amounts of Federal Government Bonds and allowing the financing of record government budget deficits. The aim is to increase CPI inflation rates and to stimulate the real economy. This is being achieved to different degrees in different nations.

The US Federal Reserve’s balance sheet has doubled in size since the pandemic began, and has now swelled by 800 per cent since 2007.

The Gross Domestic Product (GDP) in the United States expanded by just 0.4 % in the first quarter of 2021 over the same quarter of the previous year.

The US economy shrank by an annualized 31.7 percent in the second quarter of 2020. This was a huge shock to the largest national economy on the planet. Total US GDP has now been static for three consecutive years. The US economy is estimated as being approximately 18.5 % of Global GDP.

The Eurozone economy has suffered 5 consecutive quarters of contracting annualized GDP. Their GDP annual growth numbers for those 5 quarters have been – 3.3 %, – 14.6 %, – 4.1 %, – 4.7 % and – 1.3 %. Total GDP in US Dollar terms in the Eurozone has fallen for 4 consecutive years.

Total GDP in US Dollar terms in the UK has fallen for 14 years since a peak in 2007. It is more than 10 % below its all time peak that occurred in 2007 — 14 years ago. Consumer spending has fallen by almost 15 % since its peak in late 2019. Meanwhile Household debt compared to GDP has surged from 85 % to 90 %. Households are increasing their debt loads while the economy as a whole is in a long term decline. Government Spending to GDP has exploded from around 40 % to 52 % since 2019, a massive increase. And that spending has been financed largely by the central bank.

Japan’s economy, in US Dollar terms, peaked in 2012 and has since fallen by 16 %. Their Gross Domestic Product (GDP) Annualized Growth Rate has been negative on a Quarterly basis for 6 consecutive quarters.

US Dollar Index: A possible criticism of this analysis is that these comparisons sometimes use US Dollar Terms. However, a review of the US Dollar Index over the long term reveals that the US Dollar has not appreciated or depreciated against a basket of currencies since 2010. There have been ups and downs but the US Dollar Index is currently around the exact same levels that it was in 2007 — 14 years ago.

The U.S. Dollar Index (USDX, DXY, DX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. The Index goes up when the U.S. dollar gains “strength” (value) when compared to other currencies.

The index is designed, maintained, and published by ICE (Intercontinental Exchange, Inc.), with the name “U.S. Dollar Index” a registered trademark.

It is a weighted geometric mean of the dollar’s value relative to following select currencies:

Euro (EUR), 57.6% weight

Japanese yen (JPY) 13.6% weight

Pound sterling (GBP), 11.9% weight

Canadian dollar (CAD), 9.1% weight

Swedish krona (SEK), 4.2% weight

Swiss franc (CHF) 3.6% weight

FOCUS ON AUSTRALIA

The Australian economy advanced 1.8% QoQ in the three months to March 2021, after an upwardly revised 3.2% growth in the previous Quarter. This was the third straight Quarter on Quarter expansion, amid continued monetary and fiscal stimulus. However, looked at in annualized growth rates, the Australian economy has expanded by just 1.1 % in the first quarter of 2021. And that poor result followed three consecutive quarters of negative annualized GDP Growth of – 6.2 %, – 3.7 % and – 1%.

This has been the first official recession in Australia since the early 1990’s (where two consecutive quarters show a negative number).

However, the Australian economy has not grown in size for almost 10 years if measured in US Dollars. This is a major concern. Until the Covid epidemic hit, the Australian government was attempting to limit its spending in order to achieve a Budget Surplus. Since the epidemic hit, that unwise policy has been abandoned and the budget has blown out to a significant Deficit. However, Australia can easily cope with such an increase as its government’s bonds are keenly sought after on international bond markets.

Australia is now clawing its way out of the official recession of 2020 — the first for 28 years. Government Expenditure has increased markedly.

The Annual Inflation Rate has turned positive (barely) after being negative in the second quarter of 2020 and the Consumer Price Index in Australia has gone back into positive growth.

The Reserve Bank of Australia has lowered official interest rates to a record low level of 0.1 %. This is 40 % lower than it was 12 months ago.

Data Reference: http://www.tradingeconomics.com/australia/indicators

COVID OUTBREAK IN VACCINATED INDIVIDUALS74% occurred in fully vaccinated persons.

Outbreak of SARS-CoV-2 Infections, Including COVID-19 Vaccine Breakthrough Infections. Massachusetts, USA. CDC Press Release July 30TH 2021

“In July 2021, following multiple large public events in a Barnstable County, Massachusetts, town, 469 COVID-19 cases were identified among Massachusetts residents who had traveled to the town during July 3–17; 346 (74%) occurred in fully vaccinated persons. Testing identified the Delta variant in 90% of specimens from 133 patients. Cycle threshold values were similar among specimens from patients who were fully vaccinated and those who were not.”

CHANGES TO CDC PCR TEST FOR SARS-CoV2 to DIFFERENTIATE BETWEEN SARS-CoV2 and INFLUENZA VIRUSES

Level: Laboratory Alert —- 21st July 2021

United States Center for Disease Control and Prevention

After December 31, 2021, CDC will withdraw the request to the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA) of the CDC 2019-Novel Coronavirus (2019-nCoV) Real-Time RT-PCR Diagnostic Panel, the assay first introduced in February 2020 for detection of SARS-CoV-2 only. CDC is providing this advance notice for clinical laboratories to have adequate time to select and implement one of the many FDA-authorized alternatives.

In preparation for this change, CDC recommends clinical laboratories and testing sites that have been using the CDC 2019-nCoV RT-PCR assay select and begin their transition to another FDA-authorized COVID-19 test. CDC encourages laboratories to consider adoption of a multiplexed method that can facilitate detection and differentiation of SARS-CoV-2 and influenza viruses.

75 % OF INDIANS OVER 45 YEARS AGE IMMUNE TO COVID 19

A TRIUMPH OF NATURAL IMMUNITY

In India, 36,227 people have been checked for SARS-CoV2 Antibodies in 21 States. The Indian Council of Medical Research conducted the studies.

They found that over 77 % of people over 45 years age had Antibodies.

From 18 – 44 years age, 66.7 % had Antibodies.

From 10 – 17 years, 61.6 % had Antibodies.

85.2 percent of the surveyed healthcare workers had antibodies.

India, home to 1.3 billion people, has only vaccinated about eight percent of eligible adults.

Link: https://timesofindia.indiatimes.com/india/67-6-population-above-6-yrs-found-to-have-covid-antibodies-in-4th-national-serosurvey-lok-sabha-told/articleshow/84673504.cms

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

=============================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark


Bitcoin Falls through US$ 30,000 — Arms Not for Dollars — Masks May Lead to Illness and Death — In Israel the Fully Vaccinated are Contracting Covid and Dying

BITCOIN CRACKS THROUGH US$ 30,000

As BOOM predicted some weeks ago, the price of Bitcoin dropped below $ 30,000 last week. On Tuesday, it traded at US$ 29,393 for a short time. It has rebounded since then as the True Believers see this as a buying opportunity. Others are not so sure. BOOM expects the $ 30,000 support level to be challenged again in the near future

ARMS NOT FOR DOLLARS

BOOM has previously written about the global trade in weapons in exchange for US Dollars.

On 18th November 2018 the BOOM Editorial said –“What traded goods are best suited as US exports? The answer is weapons. If you are a purchaser nation, then the weapons you buy are probably obsolete almost as soon as they are delivered, they can be easily destroyed (thus needing to be replaced), they have no real useful purpose (unless a war is engaged) and they do not contribute to your economy in any productive way. A purchaser nation must acquire US Dollars either in loans (US Dollar denominated debt) or in other trade settlements to build their reserve of US Dollars. Then they must ship those US Dollars over to the US manufacturers as payment. This is akin to being trapped in a spider’s web.”

According to the Russian news service, RT News, Russia is no longer accepting US Dollars as payment for its weapons exports. Russia’s state arms exporter Rosoboronexport signed 13 contracts totaling $1.2 billion in value last week at the MAKS 2021 international air show. Russia’s state defense conglomerate Rostec also signed 230 billion rubles ($3.1 billion) worth of contracts for the supply of 161 aircraft.  But few US Dollars changed hands. The MAKS International Aviation and Space Salon is an international air show held in July every second year in Zhukovsky, southeast of Moscow. The show was first held in 1992. Over 63,000 people have attended already last week prior to the weekend crowd.

The list of Rosoboronexport deals includes orders for the Sukhoi Su-30 fighter jet, the Mi-35M and Mi-17B5 helicopters, Protivnik-GE radars, Verba surface-to-air missile (SAM) MANPADS and a variety of modern air defense weapons and armored vehicles.

The US dollar’s share in Russia’s military contracts with other countries is approaching zero, according to the country’s main defense contractor Rosoboronexport.

“Most of Rosoboronexport’s contracts are currently concluded in rubles or in the national currencies of partner countries. The share of dollars in our contracts is steadily approaching zero,” the company’s CEO Alexander Mikheyev said.

“Russia has been deliberately abandoning the dollar in payments for its export arms contracts, which, for the past few years, have brought the country about $15 billion annually in US dollar equivalent”.

This follows a broader trend towards de-dollarizing the Russian economy, with the country’s Central Bank and National Wealth Fund recently cutting use of the greenback in their transactions to zero.

Of course, a better world may be achievable if nations spent $ Billions on peace initiatives and cooperation efforts. But that is perhaps too radical a pathway for most politicians.

MASKS MAY LEAD TO ILLNESS AND EVEN DEATH

The staff at a major Pathology firm in BOOM’s city are being forced to wear an N95 mask for 8 hours a day while at work. This can lead to Hypercapnia, a condition where Carbon Dioxide in the blood rises to dangerous levels because the mask wearer is re-breathing. BOOM checked the mask box Warnings — the staff were shocked to read these. They had never thought to check the box for instructions.

N95 Mask — Healthcare Particulate Respirator

WARNINGS

⦁ The mask does not eliminate the risk of contracting any disease or infection.

⦁ Improper use may lead to illness and even death.

⦁ Use this product immediately after the package is opened.

⦁ DO NOT sleep while wearing the mask.

⦁ Avoid hand contact within the interior part of the mask.

⦁ DO NOT use masks if they expired.

⦁ For one-time use only. Dispose the mask according to regulations.

⦁ DO NOT use if the package is damaged.

MEANWHILE IN ISRAEL

FULLY VACCINATED ARE CONTRACTING COVID 19 AND DYING

The Israeli Prime Minister, Naftali Bennett, said last week ““We do not know exactly to what degree the vaccine helps, but it is significantly less” .

At the moment, around 60% of the patients in serious condition with Covid 19 in Israel have been vaccinated. According to Hebrew University researchers, around 90% of newly infected people over the age of 50 are fully vaccinated.

So it looks like the vaccine is nowhere near as effective as has been promised in the mainstream media and by the politicians in almost every nation.

BOOM has seen Israeli data that shows 80 – 90 % of new Covid Cases in that nation are Fully Vaccinated. Other recent Israeli data reveal that 8 out of 10 deaths from Covid last week were also Fully Vaccinated.

To BOOM, none of this is a surprise as the clinical trials in late 2020 revealed clearly that the Absolute Risk Reduction generated by the vaccines was of the order 0.7 % – 1.0 % (not “95%”). That result is representative of very poor protection. So vacinees appear to be taking large risks of adverse events while receiving very little protective effect.

The “95% effective” pronouncement loved by politicians is a Relative Risk Reduction calculation, designed to mislead.

Israel is the most vaccinated sizable nation on Earth so these results are very concerning. The endless reliance on vaccine programs rather than early treatment regimes seems seriously mis-guided and perhaps deliberate. Could the aim be maximum damage? Is it more about political control than anything else?

AMERICA FRONTLINE DOCTORS LAUNCH LEGAL CASE

PLAINTIFFS MOTION FOR PRELIMINARY INJUNCTION

America’s Frontline Doctors, as Plaintives, have launched a legal challenge in the District Court of Northern Alabama against Xavier Becerra, the Secretary of the U.S. Department of Health and Human Services et al (the Defendants).

QUOTE: “Accordingly, and for all of the foregoing reasons, Plaintiffs move under Rule 65, Fed.R.Civ.P., for a preliminary injunction against Defendants enjoining them from continuing to authorize the emergency use of the so-called “Pfizer-BioNTech COVID-19 Vaccine,” “Moderna COVID-19 Vaccine” and the “Johnson & Johnson (Janssen) COVID-19 Vaccine” pursuant to their respective EUAs, and from granting full FDA approval of the Vaccines:

(i) for the under-18 age category;

(ii) for those, regardless of age, who have been infected with SARS-CoV-2 prior to vaccination; and

(iii) until such time as the Defendants have complied with their obligation to create and maintain the requisite “conditions of authorization” under Section 546 of the Food, Drugs and Cosmetics Act, 21 U.S.C. § 360bbb–

Case 2:21-cv-00702-CLM Document 15 Filed 07/19/21 Page 65 of 67 -66-

3(e),

thereby enabling Vaccine candidates to give truly voluntary, informed consent.

Dated: July 19, 2021.” UNQUOTE

LINK: https://img1.wsimg.com/blobby/go/3c6a0774-cfad-46fa-aa97-af5aa5e74f00/M%20for%20PI%20file%20stamped.pdf

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

=============================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

==============================================================

MOLS Denmark

$ 4 TRILLION CRASH IN TOURISM — NZ ENDS QE — A GRANDMOTHER SPEAKS — TWENTY OBSERVATIONS ALL OVER THE NET

BOOM FINANCE AND ECONOMICS

$ 4 TRILLION CRASH


It has been estimated that the collapse in global tourism from the Covid panic and fear has already cost tourist businesses over US $ 2.4 Trillion in lost revenue. This may grow to over $ 4 Trillion by the end of 2021. Many developing nations have been adversely affected as they have large and (previously) growing tourism sectors.
The worst estimate that BOOM has seen involves a 75 % drop off in tourist arrivals. Currently available data shows a 73 % decline in international tourist arrivals during 2020. Any rebound will be slow.
This is just one industry affected adversely by the Covid panic. Total global GDP is estimated to be around $ 85 Trillion. Total losses in global GDP could be in the range 5 – 10 %. One estimate seen by BOOM amounted to $ 15.6 Trillion. If so, that would approach a loss of 10 % annually for 2020 and 2021.
Covid represents a dramatic loss of economic activity and most of that will be felt in the poorer nations. Unemployment and starvation will be the result.


NZ ENDS QE


The central bank of New Zealand has ended its Quantitative Easing program of asset purchases. There are some economists who think that overnight interest rates, set by the Bank of New Zealand, will inevitably rise and perhaps very soon. BOOM is not inclined to agree.

The central bank of Australia has reduced its QE program marginally. Again, there are some economists who think that this reduction in bond purchases is the beginning of inevitable further reductions. Again BOOM is not inclined to agree.


And the central bank of Canada has reduced its bond purchase program. Some people are predicting that they will end their QE program by the end of this year. BOOM does not agree.


All of these central bank actions and all of these predictions about the future hinge on one thing — the arrival of persistent CPI inflation along with persistent economic growth beyond the end of 2021.  BOOM has stated clearly that this is not likely and that current CPI surges are “transitory”.  That is because the major critical input into advanced economies in regard to CPI inflation is wages growth. In economies where services are 70 – 80% of GDP, this is the key to generating CPI inflation. And, if wages do not grow significantly, then the pre-condition is not fulfilled.


Now, let’s look at why there has been enthusiasm for the argument that CPI inflation is breaking out. That enthusiasm is largely based upon commodity price rises. Let’s look at what is happening in that sphere of CPI influence. The topical price of Lumber in the US, for example, has collapsed by almost 70 % since May 10th.  It is almost back to the price levels where it started its meteoric rise 12 months ago. US prices for Corn and Wheat also peaked on or about May 10th. The ETF traded in New York for Base Metals (DBB) also peaked then and so did the price for Copper. The one essential commodity price that has continued to rise over the last 3 months has been the price of oil. But that has recently hit a pocket of resistance and has fallen almost 10 % in the last 2 weeks.


Consumer sentiment in the US collapsed by 30 % in early 2020. That was a staggering drop. It has since recovered half of that fall but lately it seems to be falling again. If that trend in consumer sentiment continues to fall, then BOOM’s expectations of flat to lower GDP growth and lower CPI numbers will be re-enforced.

The US Bond markets are still in full agreement with BOOM. Bond prices continue to rise in all major sectors. Thus, low (and lower) interest rates seem to be here to stay for the foreseeable future.


A GRANDMOTHER SPEAKS

Republished with permission from BIZNEWS  https://www.biznews.com/


Berendien Lubbe, Emeritus Professor at the University of Pretoria and Grandmother recently wrote this in regard to Covid 19 as reported on BizNews


Ms Lubbe writes: “I am a seventy-year-old grandmother, so yes, I am in the high-risk group. Over the last year or so, I have listened to a select number of politicians, scientists and medical doctors. I have been exposed to the eloquent views, hysteria and patronising utterances of these experts as well as the authoritarian voices of the Command Council. As each COVID-wave comes and goes, I have been told what to do, when to do it and the deadly consequences of not following the rules. I have been told my grandchildren should not hug me because they can kill me; my grandchildren have been told the same. Every day the main media has bombarded me with the same voices and the same messages. If I don’t behave, if my grandchildren don’t behave, I will die, or worse yet, I will personally be responsible for killing my neighbours. I may have already unwittingly done so because, for all I know, I may have already had COVID. I have certainly had a range of symptoms over the last year that ticks all the boxes. I did not test, so I don’t know. I may contract COVID tomorrow and die, I don’t know, but then again, I may die of cancer or a heart attack, I may die in a car accident or a violent crime; I just don’t know.


What I do know is that my freedoms and choices have been taken away by people with whom I do not necessarily agree or even find particularly pure of motive. I want to hear views from all sides, I want discussion and debate in the main media and then I want to make my own choices. I have come to realise that debate has been stifled and that anyone holding a different view on any issue relating to COVID, be it medical, economic or social, have been silenced. The main media has taken it upon themselves to define what false news is, and debate has become the sacrificial lamb at the altar of a pre-determined COVID-agenda. Anyone wishing to enter into the debate is lumped together with some crackpot conspiracy theorist. I read voraciously, and I try to understand different views. I am not awestruck by people in authority, and I am not convinced of something simply because someone else says so, even if they are so-called experts. I believe in critical thinking. So why are we being told what to do by the same people who stifle all debate? Where is the discussion? I don’t particularly appreciate being told what to do simply because others who ostensibly know better are telling me.


“I have become more and more convinced that the reigning COVID scientists, politicians, doctors and media are each, for their own particular reason, on a mission to eradicate COVID at the expense of all else. COVID determines every move we make. I don’t think scientists and doctors have ever before had such extraordinary power over entire nations, and to “save lives”, they are now dictating public policy. Politicians are curtailing our freedoms because they have the ideal opportunity to do so. Humankind has been placed at the altar of COVID to serve these interests. Reputations are at stake here. We must endure every other illness as long as we don’t get COVID; we must lose our jobs, see our families suffer and our children fearful as long as we don’t get COVID. We must stifle independent thought and follow the rules just so that we don’t get COVID. We should stop questioning the lockdown measures because the reigning scientists, the politicians, the doctors know best. If we do, we risk being ridiculed, insulted and labelled conspiracy theorists.

“I have been fearful many times; I don’t want to get COVID, I don’t want my family, friends or neighbours to get COVID, but then again, I don’t want to get cancer, die in a car accident or be murdered. What I do want is my freedom to choose what I want to do in an imperfect world where dangers lurk and people die. My children and grandchildren’s future depend on it.”


TWENTY OBSERVATIONS ALL OVER THE NET


The UK-based rapper known as Zuby recently listed 20 observations on Twitter, and his list went viral. It has been re-published all over the Internet.

20 Things I’ve Learned (Or Had Confirmed) About Humanity During The “Pandemic”


1. Most people would rather be in the majority, than be right.
2. At least 20% of the population has strong authoritarian tendencies, which will emerge under the right conditions.
3. Fear of death is only rivaled by the fear of social disapproval. The latter could be stronger.
4. Propaganda is just as effective in the modern day as it was 100 years ago. Access to limitless information has not made the average person any wiser.
5. Anything and everything can and will be politicized by the media, government, and those who trust them.
6. Many politicians and large corporations will gladly sacrifice human lives if it is conducive to their political and financial aspirations.
7. Most people believe the government acts in the best interests of the people. Even many who are vocal critics of the government.
8. Once they have made up their mind, most people would rather to commit to being wrong, than admit they were wrong.
9. Humans can be trained and conditioned quickly and relatively easily to significantly alter their behaviors — for better or worse.
10. When sufficiently frightened, most people will not only accept authoritarianism, but demand it.
11. People who are dismissed as “conspiracy theorists” are often well researched and simply ahead of the mainstream narrative.
12. Most people value safety and security more than freedom and liberty, even if said “safety” is merely an illusion.
13. Hedonic adaptation occurs in both directions, and once inertia sets in, it is difficult to get people back to “normal.”
14. A significant % of people thoroughly enjoy being subjugated.
15. “The Science” has evolved into a secular pseudo-religion for millions of people in the West. This religion has little to do with science itself.
16. Most people care more about looking like they are doing the right thing, rather than actually doing the right thing.
17. Politics, the media, science, and the healthcare industries are all corrupt, to varying degrees. Scientists and doctors can be bought as easily as politicians.
18. If you make people comfortable enough, they will not revolt. You can keep millions docile as you strip their rights, by giving them money, food, and entertainment.
19. Modern people are overly complacent and lack vigilance when it comes to defending their own freedoms from government overreach.
20. It’s easier to fool a person than to convince them that they have been fooled.”

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

=============================================

HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

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