by John Ward
Promotion based on the old pal’s act rarely solves anything. When disguised as gender-based ability, it is a recipe for global economic doom.
‘….the International Monetary Fund is a diminished force and no longer has the firepower to act as the world’s lender of last resort in an emergency. A surge in offshore dollar lending – increasingly through opaque security markets – has exploded to $18 trillion and has overwhelmed the safety buffers of the existing financial architecture. The concern is that a continued surge in the value of the US dollar – potentially triggered by the coronavirus epidemic, or any other black swan catalyst – could bring this to a head….’
Such is the stark conclusion of fisco-financial commentator Ambrose Evans-Pritchard, having read the paper from a G20 task-force of leading currency experts under the aegis of The Robert Triffin International forum.
Now let’s see….who was on watch at the IMF while this largesse was unravelling, sorry, unfolding?
Why, none other than convicted public funds misuser and former French Finance Minister, Christine Lagarde…..now installed in her role as head of the European Central Bank.
Just to restate the obvious here, Mme Lagarde is a lawyer who has spent much of her life chasing American ambulances. When Dominique Strauss-Kahn was fitted up for a New York hotel rape (having been hot favourite for the IMF job) Our Chrissie snuggled up to Tim Geithner and snatched the prize from DSK’s grip.
This is the flimsy basis upon which advancement occurs in the EU generally, and US foreign policy in particular. (DSK was later cleared of all charges).
So then, what is the nature of the mercantile global hanged-by-the-nexus sentence that Fru-Fru Lagarde the incompetent Pink Panther gendarme has inherited from Mario Draghi? Did the slithery Goldman Sachs crook leave her a legacy, or a mixed crock of alimony and IOU bills?
Well first up, there’s a chronic lack of liquidity. The Repo mess in New York continues to be the tip of this iceberg: last week, on Tuesday, there was $60 billion in loan demand, but the New York Fed provided only $30 billion. On Thursday, it was exactly the same story.
This can only mean one thing– one or more trading houses have a trust issue when it comes to borrowing, because the other sharks don’t trust it or them. In case readers have forgotten, this is how the Lehman brothers became orphans in very short order.
But what – you may justifiably ask – do the Dow, Wall Street and Jamie Dimon have to do with eurozone stuff?
Well, In Germany, Chancellor Merkel’s party (CDU) chief and designated successor AKK (Annegret Kramp-Karrenbauer) resigned yesterday after the “far-right” Alternativ für Deutschland (AfD) dominated election results in Thuringia. As the Unelected State in the US long ago bet the farm on Berlin stability, this leaves many New York banking firms a tad confused on the sky/floor thing.
To make things worse, last Friday’s (7th Feb), flash trade data showed that German exports were up +0.1% in Dec from a prior contraction of -2.2% (revised upwards from -2.3%)…but lower than the expectations of +0.5% growth.
And so we journey full circle to another part of our ever-so-connected dumb-assed world economy – completely in turn disconnected from its alleged bourse capital supplier – which is by another surreal turn completely connected via a central banking system with no relevant idea about whatTF to do next.
I refer of course to the coronavirus epidemic mentioned in the opening paragraph.
“The Chinese economy is starting to reel from the effects of the epidemic, and if this turns into a pandemic then the world economy could be harmed greatly,’ said Joel Naroff of Naroff Economic Advisors.
Exporters and manufacturers who suffered from the U.S. trade war with China had been hoping for a thaw in that wintry negotiation. Those dreams are now all but shattered as China shuts down economic life in the PRC. Don’t see this as handing a Trumpian America the upper hand: on the contrary – like Europe – American output will be hugely damaged by the spare parts and software boards made in China, without which their manic gadgets can’t function.
If I were asked who would be better than Christine Lagarde at the European Central Bank, I have to confess I’d need notice of the question. But those ahead of her in my personal queue would – for starters – include Bernie Madoff, Donald Duck’s dog, Robert Maxwell (dead or alive), Harriet Harman, Hillary Clinton, Joe Biden and George Osborne. That last two of those, it goes without saying, represent the ultimate insult.
You may well ask the point of this post.
It is this: never put selfish élite interest before the fundamental principle of fitness for purpose.
And above all, never let equality of opportunity quotas get in the way of superior ability.
The global reset is now under way. I do not know any more than anyone else where it will lead. The one thing I do know is that your government isn’t going to help you much.