Two Great Threats Plus Another — China Stocks Falling — Back at the Casino — A Different Hyperinflation — Covid Vaccine Halted in 10 Nations — Urgent Open Letter from Doctors and Scientists

TWO GREAT THREATS

There are now two great threats to the global economy which must be looked at very seriously. They are rising interest rates and uncertainty about Covid vaccine safety and effectiveness. A third great threat comes in the financial sector — it is the rise and rise of Bitcoin — more on that later.

Last Friday, the US bond market ended the week with a decisive fall in prices along the sovereign yield curve and in all other market segments. Sovereign bonds fell in price decisively after rising earlier in the week. Investment grade corporate bonds, junk bonds and inflation protected bonds all suffered price falls.

When bond prices fall, the banking sector benefits from consequent rises in interest rates but everyone else will suffer if this continues. The 10 year bond yield is now above 1.6 % and rising. It has tripled since August last year. Mortgage rates will soon rise if this trend continues.

Vaccine uncertainty was highlighted at the end of the week by the suspension of the Astra Zeneca Covid vaccine in 10 nations, mostly in Europe, where there are now serious concerns about safety regarding blood clotting problems. A more detailed report concerning the risks of DIC from the new genetic material based vaccines is discussed below. Read on. DIC is a fearful medical condition called disseminated intravascular coagulation.

CHINA STOCK MARKET FALLING

Another concern lately regards the Chinese stock markets which have been falling since 18th February. Both the Shanghai Composite and the Shenzhen market have fallen by 10 % and 15 % respectively since then to their March lows. On Tuesday, there were rumors that the Chinese government tried to arrest the slide but the markets ended sharply lower yet again on the day.

This is all happening while recent data releases on Chinese exports and imports were excellent. Imports to China jumped 22.2% Year on Year in January-February 2021 combined. Exports from China surged 60.6 percent YoY in January-February 2021 combined. That would suggest that the Chinese economy is functioning at near full capacity. So what else is happening?

In the last week, the US Dollar has suddenly appreciated sharply against the Chinese Yuan. This may indicate that US investors are selling Chinese stocks. If so, it is a major financial event taking place. But it is too early to tell if such a market dynamic is occurring.

The US Dollar Index is measured against a basket of other major currencies and it has also risen sharply over the last 2 weeks. This could be responsible for any recent weakening in foreign stock markets, with US selling being a dominant factor. But, again, it is just too early to tell if this represents a decisive change in global capital flows or not.

BOOM’s two prime economic indicators for the Chinese economy are diverging at present. One is continuing to rise strongly while the other has been flat for almost 6 months. This is odd because they usually move together in the same direction with one confirming the other.

BACK AT THE CASINO

Tuesday was also a memorable day on the casino stock markets in the United States. Just for one day, the rotation to solid sectors such as energy, banks, property and so-called value companies suddenly fell out of favor while “investors” roared back into the Tech sector. Tesla went up by almost 20 % — in a single day. An extraordinary performance and yet it was only the 17th Top Gainer for the day. Rather pedestrian.

16 other stocks rose by more. The top stock, Canaan Inc, (CAN) rose by 50 % . Canaan is a provider of semiconductor solutions. They produce custom designed integrated circuit microprocessors for supercomputing hardware.

From their website — “Canaan is renowned for having invented the world’s first ASIC-powered bitcoin mining machine in 2013, radically catalyzing the growth of a computationally-advanced bitcoin mining sector. Today, Canaan continues to be the second largest designer and manufacturer of bitcoin mining machines globally.

The second best performer on the day was Riot Blockchain Inc.

From their website — “Riot Blockchain focuses on bitcoin mining, supporting the bitcoin blockchain by participating in Bitcoin’s consensus system through proof-of-work mining, racing to find the next block and building upon the chain. We aim to be one of the largest and lowest-cost producers of bitcoin in North America.”

When you’re printing private money (binary code in a packet), you need the very best equipment (!).

Print, print, print ……….. BBBRRRrrrrrrrrrrrrrrrrrrrr ……… digital assets are being created instantly out of thin air by supercomputers using only electricity. The “Bitcoin Miners” then print and sell, print and sell those digital assets, instantly converting them into US Dollar proxies (called stable coins), as fast as possible. Money for jam.

A DIFFERENT HYPERINFLATION

So the question is this — when is US Treasury Secretary Janet Yellen Gonna Yell?

To BOOM this looks like a brewing hyperinflation event (of asset prices in the US) caused by the production of a digital asset with no fundamental value that can be converted immediately into US Dollars. Those dollars circulate principally in the US asset markets. Surely this threatens the conventional supply of fresh national fiat currency from the US banking sector? If so, the US financial sector and the real economy are under grave threat from within.

Hyperinflation events in history usually begin (and end) when currency alternatives are freely available to consumers in the real economy to buy goods and services. One currency rises while the other currency falls. This situation, however, is a little different but similar. Here is a digital asset being produced by private entities with super computers that can boost the money supply endlessly. They are operating in the asset economy, not the real economy. Such a dynamic may be driving US asset prices relentlessly higher.

BOOM thinks the global institutions of finance, especially in the US, have no real grasp on the threat this represents to their continued existence. They have never seen an asset price hyperinflation event. Hint — they should check out Venezuela where the stock market has risen from 82,706 points in January 2020 to 2,645,284 now. They are risking societal and economic collapse in the United States by ignoring the immediacy of the threat. And the phenomenon persists for 24 hours a day, 7 days a week. It never sleeps. Bitcoin hit $ 60,000 over the weekend.

ASTRA ZENECA VACCINE HALTED IN 10 NATIONS

Denmark, Iceland and Norway have suspended the use of the Oxford-Astra Zeneca Covid-19 vaccine while the European Union’s medicines regulator investigates whether the shot could be linked to a number of reports of blood clots.

Other nations taking similar actions include Lithuania, Estonia, Latvia, Luxembourg, Romania, Austria and Thailand. This amounts to 10 nations in total.

Other governments are declaring the vaccine “safe and effective” in mass advertising campaigns aimed at introducing the new vaccine technologies on a large scale. More and more people are choosing to no longer believe them.

URGENT OPEN LETTER FROM DOCTORS AND SCIENTISTS DATED 28TH FEBRUARY

BOOM readers must read this letter which was sent to the European Medicines Agency on 28th February. It was also sent to Ursula Von Der Leyen, President of the European Commission and to Charles Michel, President of the Council of Europe.

Link: https://doctors4covidethics.medium.com/urgent-open-letter-from-doctors-and-scientists-to-the-european-medicines-agency-regarding-covid-19-f6e17c311595

FOR THE URGENT PERSONAL ATTENTION OF: EMER COOKE, EXECUTIVE DIRECTOR OF THE EUROPEAN MEDICINES AGENCY

QUOTE: “As physicians and scientists, we are supportive in principle of the use of new medical interventions which are appropriately developed and deployed, having obtained informed consent from the patient. This stance encompasses vaccines in the same way as therapeutics.

We note that a wide range of side effects is being reported following vaccination of previously healthy younger individuals with the gene-based COVID-19 vaccines. Moreover, there have been numerous media reports from around the world of care homes being struck by COVID-19 within days of vaccination of residents. While we recognize that these occurrences might, every one of them, have been unfortunate coincidences, we are concerned that there has been and there continues to be inadequate scrutiny of the possible causes of illness or death under these circumstances, and especially so in the absence of post-mortems examinations.

In particular, we question whether cardinal issues regarding the safety of the vaccines were adequately addressed prior to their approval by the European Medicines Agency (EMA).

As a matter of great urgency, we herewith request that the EMA provide us with responses to the following issues:”
UNQUOTE

The letter then lists a number of concerns about the risks of disseminated intravascular coagulation (DIC) in people receiving the genetic material based vaccines. DIC is a fearful medical condition. Here is a final paragraph

QUOTE : “There are serious concerns, including but not confined to those outlined above, that the approval of the COVID-19 vaccines by the EMA was premature and reckless, and that the administration of the vaccines constituted and still does constitute “human experimentation”, which was and still is in violation of the Nuremberg Code.” UNQUOTE

The leading signatories included Professsor Sucharit Bhakdi MD, Professor Emeritus of Medical Microbiology and Immunology, Former Chair, Institute of Medical Microbiology and Hygiene, Johannes Gutenberg University of Mainz (Medical Doctor and Scientist) and Dr Michael Yeadon, former Vice President & Chief Scientific Officer Allergy & Respiratory, Pfizer Global R&D.

ERROR CORRECTION

Last week BOOM mentioned “the ETF for the Dow Index, FDN” — it should have read “the ETF for the Dow Internet Index, FDN”. BOOM apologizes for the error. However, it does not alter the thrust of the matter then under discussion.

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

EMAIL: gerry {at} 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 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.

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MOLS Denmark


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