BOOM as at 20th December 2020

NEW COVID STRAIN

They told you the virus was not mutating. BOOM told you otherwise months ago and even told you where to check the progress of mutations here — Genomic epidemiology of novel coronavirus – Global subsampling 
Link: https://nextstrain.org/ncov/global

Read about the new strain and the mutations:

New Covid Strain has ‘striking’ amount of mutations: Scientists discover 17 changes on crucial spike protein of evolved virus
https://www.dailymail.co.uk/news/article-9058923/New-Covid-strain-17-mutations-scientist-say.html

TURKEY FOR CHRISTMAS — GOING EAST


Last week, the United States imposed sanctions on its major NATO ally, Turkey. This means that Turkish officials who are involved in weapons acquisitions will face U.S. visa restrictions and will have their financial assets in the U.S. frozen. So, it’s personal.

This all stems from Turkey’s decision to buy the feared S400 missile defense system from Russia. Yes, Turkey is buying weapons from its supposed NATO arch enemy and probably paying for them with Turkish Lira currency.

As BOOM has previously explained, we live in a US Dollar Global Empire which began in 1944 at Bretton Woods. In that system, nations are encouraged to settle international trades with readily available US Dollars that exist outside of the US. Those external US Dollars are abundant, called Eurodollars and they are principally created by tax haven banks when they create loans for non US borrowers. However, in this Empire, nations must principally export goods and services to earn US Dollars. This then allows them to pay for their necessary imports with the global currency. The jargon for this is the “free trade” system. The US is, of course, a great proponent of “free trade” (which is anything but free).

The US is very unhappy about this turn of events in Turkey. They see it simplistically as outright defiance (when it is actually a complex matter). However, they cannot attack Turkey militarily because that would mean the immediate and absolute end of the NATO alliance which is supposed to defend Europe (against Russia). So a stalemate is in place with Turkey defiant of US demands while buying Russian weapons systems.

With this in mind, it is interesting to look at the Turkish economy to see if it is a factor. Its GDP looks healthy with a growth rate of 6.7% year-on-year. This is currently showing a strong rebound after a dramatic collapse early this year due to the Covid phenomenon. Its stockmarket index is rising strongly while its sovereign bonds are sought after by domestic investors. However, foreign investors now hold only 5 % of bonds on issue. This figure was approximately 33 % just 7 years ago (according to the Wall Street Journal). So Turkey must fund its government budget deficit internally.

Luckily (or perhaps due to good management), the Government Budget has a manageable deficit at around 3 % of GDP so bond issuance volumes can be matched by domestic demand. And its overall Total Government Debt to GDP ratio is relatively comfortable at 33 %.

However, its 10 year Bond yield is currently around 13 % and the sovereign bond yield curve is inverted with the one year Bond yield at the higher level of 15.5 %. Inverted yield curves are supposed to indicate stress in a nation’s banking system. That is a worry. And there are further signs of weakness in its domestic economy with the unemployment rate at 13% and rather intractable, being above 10% for the last 4 years.

Externally, Turkey has a trade deficit of around US$ 24 – 30 Billion per year. Its major trading partners for exports according to World Bank WITS data and ranged in size of trade are China, Russia, Germany, India, Italy, Iraq and then the United States. Only 5 % of its exports go to the USA.

So far, so good — the problem comes in regard to its currency. The Turkish Lira is falling steadily and has been in decline since 2013. In fact, it has fallen four fold against the US Dollar since then.

These dynamics are a problem for Turkey. With a trade deficit and Russia, China, Germany, India, Italy and Iraq as its major export destinations heavily outweighing the United States, it is always struggling to earn sufficient US Dollars to settle increased external transactions. The world of international trade is being increasingly dominated by Turkey’s major trading partners so there is a natural tendency towards abandoning settlement in US Dollars. Thus, it is also being forced to look East for weapons to keep its huge military sector well armed and employed. It’s that simple. America’s policies in regard to Turkey appear to be very short sighted and out of sync with the realities of world trade.

These economic dynamics create Geo-political tensions. And the Geo-political tensions create economic consequences.

Turkey’s biggest potential threat here is the possibility of currency collapse. If the people of Turkey lost faith in their currency, then Hyperinflation could break out. But, for this to happen, the people would have to switch to using US Dollars in their everyday purchases and in their purchases of large assets such as houses. BOOM suspects that the Turkish government would be well aware of this risk and they would firmly discourage the use of US Dollars inside Turkey’s borders. That is the correct action to take in such a situation. Any growth in circulation of foreign currencies would be a potential disaster for the nation in the long run.

In BOOM’s opinion, the US  must change its policy stance in regard to Turkey. If it continues to harass Turkey as it has done recently, it will simply drive Turkey more and more into the arms of the Eastern trading nations. Ultimately, Turkey will abandon the NATO alliance when push comes to shove. They are the second largest military power in NATO after the US and they have close connections with Germany. The US is actually on a pathway to destroy NATO as far as BOOM can see. This is an isolationist policy stance. Not a wise course of action.

The adversarial nature of US foreign policy needs to be moderated and quickly. A foreign policy that isolates a nation from its allies is counter-productive to say the least.

THE ZERO COVID FANTASY — INFANTILISM AND MAGICAL THINKING — MEDICAL FASCISM

There is a growing idea, especially in Australia and New Zealand that the disease Covid 19 and its cause, the SARS-CoV2 virus, can be eliminated. These are island nations, separated by oceans from the 7.5 Billion people who inhabit Earth. Perhaps that distance allows more magical thinking.

The concept of viral elimination feeds into the secondary idea that “everyone should therefore be vaccinated, forcibly if necessary” and further preposterous concepts such as “no jab, no job”.  After all, if your goal is total elimination, then total vaccination makes sense and so does total tyranny. Delusion breeds delusion.

Australian journalists, mainly from the left side of the political spectrum, are writing stories demanding that virus elimination is achievable and a valid goal. They also state that only fanatics are opposed to such views. They want employers to force their employees to be vaccinated. And many politicians, again mainly from the left, are blindly following. They wish to join with their political enemies, the Big Pharma Corporations, in a forced biological subjugation of the people. Notably, there is little discussion of the risks of vaccination, the possible long term effects, the costs, whether the threat is sufficient to warrant such action or any assessment of the differences between the various vaccine candidates. The claims by the Big Pharma companies of the vaccines being “95% effective” are simply accepted without question. This is medical fascism.

These journalists have no medical experience. They have essentially no knowledge of how viral infections exist and spread, no sense of the well known epidemiological dynamics of novel infections. They are simply expressing infantile desires. They just want The Big Bad Virus gone — so they can “return to a normal life”.  Take it away, Daddy ……… please.

This is magical thinking — a modern disease. It is driven by the philosophy that nothing bad should happen to anyone and that heaven can be achieved on Earth if enough laws and regulations can be passed by governments.

In New Zealand this year, only 25 deaths have been associated with a positive PCR Test for Covid. In Australia, 908 deaths. However, on average, about 440 Australians die every day from all other causes. That’s 13,333 per month and 160,000 per year. But the panic, the fear, the hysteria, the lockdowns, the vicious police actions, the headlines, the endless talk shows, the medical fascism are all derived from only 908 of those deaths. That is just 0.5 % of the total. And most of those died principally from other serious, pre-existing co-morbid diseases

The other deaths due to heart attacks, strokes, bacterial pneumonia, influenza, kidney failure, heart failure, leukaemia, parkinson’s disease, motor neuron disease, emphysema, physical assault, suicide and motor vehicle accidents are of no consequence to the journalists and politicians who demand compulsory vaccinations for Covid. They have no knowledge of them. They cannot generate headlines and demands from them. They cannot signal their virtue through them. They cannot advance their career by writing about them or talking about them.

In regard to causes of death, Covid is very different. It is seen as an opportunity. An opportunity to make demands. An opportunity to blame some political opponent. An opportunity to oppress others and even harm them. An opportunity to advance careers. These magical thinkers are thinking only of themselves. They express concern but that concern is only for themselves.

Beware moral outrage. Beware modern fascism. Beware the death of free speech. Beware the death of civil societies. Beware the fearful mis-information that pours out of the mainstream media. Beware the brown shirts and the storm troopers — they come next. Then the concentration camps will be built for rebels. And then come the gas chambers.

THE GLOBAL POWER ELITE

Peter Phillips is professor of political sociology at Sonoma State University, director of Project Censored and president of Media Freedom Foundation. In his new book “Giants: The Global Power Elite” he explains that 80 % of the people on Earth live on less than $ 10 per day. That’s 6 Billion people. And half of those live on less than $ 2.50 per day. That’s 3 Billion people. The bottom Billion live on less than $ 1.25 per day.

Think about that the next time you order a coffee. Disproportionate fear of Covid 19 is not a concern for most people on this planet. They are much more worried about their next meal or putting a roof over their head.

An interview with Peter Phillips:  https://www.youtube.com/watch?v=ZUGh1Su7-ok

PROFESSOR OF PATHOLOGY DR JOHN LEE

John Andre Lee (born 1961) is a retired English pathologist who was formerly clinical professor of pathology at Hull York Medical School and consultant histopathologist at Rotherham General Hospital, later becoming the Rotherham NHS Foundation Trust’s Director of Cancer Services. Lee gained a BSc and a PhD in physiology at University College London, and then a medical degree subsequently specialising in pathology.

Here he is talking about Covid 19, asking for a rational debate. 

Link:https://www.youtube.com/watch?v=9ug9RoFbtrg&feature=emb_logo

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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.

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EMAIL: gerry {at} boomfinanceandeconomics.com

Return to the BOOM Main Website –  BOOM Finance and Economics at  http://boomfinanceandeconomics.com/

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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 Indexhttp://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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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.

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MOLS Denmark

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