BOOM as at 27th December 2020

CHINA MONEY SUPPLY SUPERIOR TO THE US — WHY THE US FAILS TO COMPETE

An insightful BOOM reader made this comment recently about the Chinese economy — “I sometimes think they have their act together better than many think”.

If you look at the growth of bank credit denominated in US Dollars, it reveals why China may have their act together. Total Bank Loans in China have increased 4 fold since 2010  from around US $ 6 Trillion to about $ 26 Trillion. Meanwhile, in the same time period,  total bank loans in the USA have not quite doubled from about US$ 8.6 Trillion to only US$ 15 Trillion.

Bank loans are the principle way that modern economies create fresh new money. When bank loans are paid off, that money dies (or you could say it is destroyed). So capitalist systems must always wait for borrowers to borrow fresh new money into existence and that money creation process must out-compete with bank loan repayments over time. Banks cannot loan new money into existence without a steady supply of new borrowers. That sounds bad enough for a nation’s supply of fresh money but it is actually worse than that in the United States.

Believe it or not, it looks like the Chinese actually understand the critical supply of money to an economy far better than America does.

Not only does the US economy have to always wait for more borrowers to appear and for their commercial banks to remain solvent, the Americans have also fallen in love with bond issuance —  sovereign bond issuance (by governments), corporate bond issuance (by companies) and municipal bond issuance (by local city councils). Bond issuance only recirculates old money as investments; it does not create a fresh supply of new money. BOOM always suggests that readers think carefully about  the dynamics of bond issuance. When a bond is issued, the debt is directly to the investor and the investor provides money that is already in existence (old money). So there is no increase in the supply of new money.

The Chinese know this and, thus, they insist on persistently boosting their money supply via bank loan originations. They do not have a massive bond market.  This is smart money management if bank failures are well managed by the central bank and it yields results in terms of persistent economic growth (and stability). The Chinese total of bonds issued amounts to just US$ 10.3 Trillion (as at end of 2018). The United States, by comparison, has $ 45 Trillion issued ($ 45,000 Billion).

The US Total is made up of $ 16.67 Trillion of Treasury Securities, $ 10.3 Trillion of Mortgage Backed Securities, $ 9.566 Trillion of Corporate Bonds. The remaining $ 7.4 Trillion is comprised of Federal Agency Securities, Asset Backed Securities and Municipal Bonds.

In comparison to the size of the economy as measured in GDP, US Total Bonds Issued are almost double the total GDP of the United States. However, the Chinese Total is only 65 – 70% of the total GDP of China as far as BOOM can ascertain. This reveals a huge difference in how each nation funds its economy.

BOOM’s conclusion is that the US cannot grow its economy anywhere near as fast as China does if it continues to do this. In comparison to China, it is being persistently starved of fresh new money. The quickest way to remedy the situation is simple. The US Government should reduce its bond issuance program and borrow directly from the commercial banking sector.

This fits perfectly with BOOM’s Quantitative Boosting methodology for the creation of non-interest bearing electronic cash. That would boost the US money supply immediately.

If the US wants to reduce its economic decline in relation to China, it should contact BOOM as soon as possible.

Quantitative Boosting — A Short Summary

https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/

CHINA EXPORT GROWTH VERSUS US EXPORT GROWTH

Exports from China jumped 21.1 percent year-on-year to an all-time high of USD 268.07 billion in November 2020, the fastest growth since February 2018 and well above market consensus of a 12 percent increase, as global demand recovered further from the COVID-19 crisis. This is a stunning economic performance.

Since 2000, China’s exports have increased 10 fold from around US $ 25 Billion per month to over $ 250 Billion.

During this same period, United States exports have barely doubled from around US$ 80 Billion per month to $ 180 Billion. This is substantial evidence of relative outperformance by China over 20 years.

20 MINUTES OF CLARITY ON COVID VACCINE — THE BIGGEST EXPERIMENT EVER DONE

Sucharit Bhakdi has published 300+ scientific articles on Immunology, Bacteriology, Virology and Parisitology. He was a professor at the University of Mainz, Germany, where from 1991 to 2012 he was head of the Institute of Medical Microbiology and Hygiene. He was Editor in Chief of Medical Microbiology and Immunology from 1990 to 2012.

He fears that the Covid Vaccines represent the biggest experiment ever done on human beings. Everyone should watch this interview.

Link:  https://thehighwire.com/videos/the-biggest-experiment-ever-done/

Yesterday, a Boston doctor nearly died from a severe allergic reaction.

https://www.msn.com/en-us/health/medical/boston-doctor-was-scared-to-death-by-allergic-reaction-to-moderna-covid-vaccine/ar-BB1cfkVg

https://www.msn.com/en-ca/health/medical/e2-80-98scared-to-death-e2-80-99-boston-doctor-suffers-severe-allergic-reaction-after-moderna-vaccine/ar-BB1cfw9f

OVERDOSE DEATHS OUTWEIGH COVID IN US AND CANADA

There has been a 40% increase in deaths from drug overdose in the United States in 2020 compared to 2019. This suggests that many Americans can no longer bear life in the USA as their hope for the future fades and as they succumb to addictions. Opioid addiction is the major cause of these suicides.

In San Francisco, overdose deaths have far exceeded deaths from Coronavirus. A total of 621 people have died of drug overdoses in the city this year, compared to 173 deaths from COVID-19.  The number of overdose deaths could have been much higher if Narcan hadn’t been used more than 3,000 times from January to November to reverse overdoses.

https://www.msn.com/en-us/news/crime/overdose-deaths-far-outpace-coronavirus-fatalities-in-san-francisco-as-lockdowns-continue/ar-BB1c5lS4

VACCINE REACTIONS — ALMOST 3 %

According to a report published by the US Center for Disease Control (the CDC), within days after the launch of Pfizer-BioNTech-messenger RNA vaccine,  it has been reported that 2.79% were “unable to perform normal daily activities, unable to work or required care from doctor or health care professional”.

There were also 6 cases of severe, life threatening allergic reactions called anaphylaxis in both the UK and the US. Read about it here —

https://www.zerohedge.com/covid-19/cdc-issues-new-guidelines-launches-probe-after-1000s-negatively-affected-following-covid

CDC ADMITS FALSE POSITIVE TESTS ARE A PROBLEM

The CDC has finally admitted that False Positive results are a significant problem for Covid PCR Tests, especially if the number of amplification cycles is excessive and especially if specimen type, clinical observations, patient history, and epidemiological information are not taken into consideration. They also are now advising that the number of amplification cycles be recorded on each test result. They advise that the Ct value must be in the report to the requesting healthcare provider.   (Ct value = high cycle threshold (Ct) value).

The CDC advises that faulty technique may lead to a specimen with a high cycle threshold (Ct) value result being mistakenly interpreted as a positive result. Other experts have claimed that somewhere between 40 – 90 % of PCR Positive Tests could be false. Dr Mike Yeadon, in particular, has tried to make this an issue but governments and the mainstream media simply ignore this, constantly referring to positive tests as positive “cases”.

https://www.who.int/news/item/14-12-2020-who-information-notice-for-ivd-users

LOCKDOWNS MAY NOT WORK

The link below shows a long list of studies that conclude that lockdowns don’t work in controlling Covid 19. Next week, we will have the final numbers for total deaths per year per nation (from all causes). BOOM suspects that the numbers will not exceed previous year totals or will be very similar. And, if so, this will indicate that  there is no pandemic of excess deaths due to Covid 19.

That leaves us with a very big Hypothetical:

If severe public health measures aren’t effective in controlling Covid 19 and many positive PCR tests are false positives and total death numbers from all causes are lower than previous years numbers where does that leave us? Goverenments will have a lot of questions to answer and the mainstream media will have to turn off their Panic and Fear campaigns.

When will governments admit that these issues need broad discussion with the medical profession, not just with their carefully selected government appointed public health “advisers” who seem always drawn to dramatic, tyrannical, authoritarian “solutions”?  And when will the emphasis turn towards using effective treatments for those who are actually sick rather than using preventive measures on the whole population?

Link: https://www.aier.org/article/lockdowns-do-not-control-the-coronavirus-the-evidence/

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HUGE NUMBERS OF DOCTORS ASK FOR REASSESSMENT OF CORONA MEASURES

Globally, we are seeing a massive campaign of disinformation concerning Covid 19 in the main stream media. While a great number of doctors are presenting different views, unprecedented censorship by the media prevents them from making the news bulletins and headlines. Their opinions are effectively banned.

Information from different thinking experts and professionals can currently be found almost exclusively through targeted searches on the internet or alternative news sources, but not in the mainstream media. Start with THE OPEN LETTER from Doctors in Belgium  —

THE OPEN LETTER
https://docs4opendebate.be/en/open-letter/

SIGNATORIES
https://docs4opendebate.be/en/signatories/

GREAT BARRINGTON DECLARATION

Signatures:     39,544 Doctors    13,083 Medical & Public Health Scientists   
“Current lockdown policies are producing devastating effects on short and long-term public health.”

https://gbdeclaration.org/
Current Signature Count: https://gbdeclaration.org/view-signatures/

Germany

An international group of doctors has launched an extra-parliamentary inquiry into the “exaggerated and oppressive corona measures”, with a view to questioning politicians and scientists around the world.
https://acu2020.org/english-versions/

International
The initiative by Luc Montagnier, Nobel Prize winner in medicine, and Robert F. Kennedy, lawyer, among others, addresses the many inconsistencies surrounding corona policy and is addressed to the presidents of the WHO, the European Commission and the European Parliament.
https://www.internationalfreechoice.com/

United States

In the US, a group of clinician doctors, who see patients on a daily basis, united under the banner “America’s Frontline Doctors” and gave a press conference which has now been watched millions of times.
https://americasfrontlinedoctorsummit.com/

The Netherlands

In the Netherlands, doctors have come together and drafted an open letter addressed to colleagues and the government pleading for proportional measures. This letter aims to stimulate an open and frank debate on how to tackle the Covid-19 outbreak and was signed by more than 2,755 doctors.
https://opendebat.info/

An open, sharp-worded letter, was written by doctors and mental health care providers, that has been signed by more than 2500 healthcare professionals.
https://brandbriefggz.nl/

Spain

A public press conference of “Doctors for Truth” in Madrid, was attended by 400 doctors and scientists under the slogan “A world dictatorship with a sanitary excuse”. “Covid-19 is a false pandemic created for political purposes”. Doctors agree that:
Coronavirus victims did not outnumber last year’s seasonal flu deaths.
Figures were exaggerated by altering medical protocols.
The confinement of the healthy and the forced use of masks have no scientific basis.
The disease known as Covid-19 does not have a single infectious pattern, but a combination of them.
https://niburu.co/gezondheid/15385-artsen-komen-massaal-met-coronawaarheid-naar-buiten

Belgium

A Belgian initiative, which has already been signed by more than 1,500 doctors and health professionals (23rd September 2020)

http://omgekeerdelockdown.simplesite.com/?fbclid=IwAR2bJAAShAlIidjnRQPyVSoZbk1Uj-FTHAthL77hKX_Oo8aMLN3V6DdwAac

An open letter on the initiative of a group of doctors from the Cliniques Universitaires St-Luc, UCLouvain. 13,583 have signed already.

https://belgiumbeyondcovid.be/

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:
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EMAIL: gerry {at} boomfinanceandeconomics.com
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https://boomfinanceandeconomics.wordpress.com/

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

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MOLS Denmark

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