Ovvero: Pararsi un po' il cul* in questo pazzo pazzo mondo di carte filigranate, iperfinanza globalizzata e picco delle risorse

domenica 23 agosto 2015

Martenson: Dare un senso a queste improvvise cadute dei mercati

In Venezuela i tovaglioli costano più delle banconote da 2 Bolivar ormai

Le banche centrali stampano a rullo. Una parte di queste mareggiate di denaro finiscono a gonfiare bolle nei paesi sviluppati, in borsa, nell'immobiliare, nei beni di lusso, ecc. Una parte finisce anche in giro per questo mondo globalizzato a gonfiare bolle nei paesi emergenti, spesso produttori di materie prime ... poi ad un certo punto il flusso si inverte e ...


Sempre unico Chris Martenson nel mettere assieme l'epocale picco delle speculazioni finanziarie, del debito e della moneta con il picco delle risorse. Una visione moderna, globale ed omnicomprensiva la sua che purtroppo è molto poco diffusa. La maggior parte della gente - quasi la totalità quando si va nel settore economico/finanziario - è totalmente cieca di fronte al problema epocale, storico, del picco delle risorse e della finitezza del nostro delicato pianeta. Sarà fra il comico e il tragico vederli nei prossimi decenni darsi le colpe l'un l'altro nell'ostinata ignoranza di cause così macroscopiche. Ma non è questo l'oggetto del post.

Riporto un pezzo di un suo articolo passato anche da quei fondamentalisti (mai come i corrispettivi italiani) dei Tylers, da dove parla di come i problemi iniziano sempre dai bordi, dall'esterno per poi dirigersi sempre più verso l'interno del sistema. A cadere sono prima i trasselli più deboli e periferici e solo per ultimo cadrà l'impero centrale (per citare Asimov).

Peak Prosperity - Making Sense Of The Sudden Market Plunge
by Chris Martenson - Friday, August 21, 2015


From The Outside In

One of our main operating models at Peak Prosperity is that when trouble starts it always begins at the edges and moves from the outside in.

This is true whether you are looking at people in a society (food banks see a spike in demand well before expensive houses decline in price), stocks in a sector (the weakest companies decline first), bonds (junk debt yields spike first), or across the globe where weaker countries get in trouble first.

What we’re seeing today is an especially fast moving set of ‘outside in’ indicators that are cropping up so fast it’s difficult to keep track of them all.  Here are the biggest ones.

Currency Declines

The recent declines in emerging market (EM) currencies is a huge red flag.  

This combined chart of EM foreign exchange shows the escalating declines of late.


Since last Monday, here’s the ugly truth:

Many of these countries have been using precious foreign reserves to try and stem the rapid declines of their currencies, but I fear they will all run out of ammo before the carnage is over.

What’s happening here is the reverse part of the liquidity flood that the western central banks unleashed.  

The virtuous part of this cycle sees investors borrow money cheaply in Europe, the US or Japan, and then park in in EM countries, usually by buying sovereign bonds, or investing in local companies (especially those making a bundle off of the commodity boom that was happening).

So on the virtuous side, a major currency was borrowed, and then used to buy whatever local EM currency was involved (which drove up the value of that currency), and then local assets were bought which either drove up the stock market or drove down bond yields (which move as in inverse to price).

The virtuous part of the cycle is loved by local businesses and politicians. 

Everything works great.  The currency is stable to rising, bond yields are falling, stocks are rising, and everyone is generally happy.

However when the worm turns, and it always does, the back side of this cycle, the vicious part, really hurts and that’s what we’re now seeing.

The investors decide that enough is enough, and so they sell the local bonds and equities they bought, driving both down in price (so falling stock markets and rising yields), and then sell the local currency in exchange for dollars or yen or euros, whichever were borrowed in the first place.

And thus we see falling EM currencies.

To put this in context, many of the above listed currencies are now trading at levels either not seen since the Asian currency crisis of 1997, or at levels never before seen at all.  The poor Mexican peso is one of the involved currencies, which has fallen by 12% just this year, and almost made it to 17 to the dollar early this morning (16.9950).  Battering the peso is also the low price of oil which is absolutely on track to destroy the Mexican federal budget next year.

Stock Market Declines

In concert with the currency unwinds we are seeing deep distress in the peripheral stock markets.  There are now more than 20 that are in ‘bear country’ meaning they’ve suffered declines of 20% or more from their peaks.
Here are a few select ones, with Brazil being in the worst shape:

All of these signs reinforce the idea that the great central back liquidity tsunami has reversed course and is about to create a lot of damage and suck a lot of debris out to sea.

The Commodity Rout

A lot of EM countries are commodity exporters.  They sell their minerals, trees and rocks to the rest of the world, by which we mean to China first and foremost.

Commodities are not just doing badly in terms of price, they are absolutely being crushed, now down some 50% over the past four years.


Commodities tells a number of things besides the extent of EM economic happiness or pain – they tells us whether the world economy is growing or shrinking.  Right now they are saying “shrinking” which is confirmed by all of the recent Chinese import, export and manufacturing data, along with the dismal results coming out of Japan (in recession), Europe and the US. 

Conclusion Part I
As we’ve been warning for a long time, you cannot print your way to prosperity, you can only delay the inevitable by trading time for elevation.   Now, instead of finding ourselves saddled with $155 trillion of global debt as we did in 2008, we’re entering this next crisis with $200 trillion on the books and interest rates already stuck at zero.  We are 30 feet up the ladder instead of 10 and it’s a long way down.
What tools do the central banks really have left to fight the forces of deflation which are now romping across the financial landscape from the outside in?
If the computers hiccup and give us some institution smashing or market busting 8 sigma move what will the authorities do?  Shut down the markets?  It’s a possibility, and one for which you should be prepared.
Where are we headed with all this?  Hopefully not the way of Venezuela which is now so embroiled in a hyperinflationary disaster that stores are stripped clean of basic supplies, social unrest grows, and creative street vendors are now selling empanadas wrapped in 2 bolivar notes because they are, literally, far cheaper than napkins.  Cleaner?  Maybe not so much.  I wouldn’t want to eat off of currency.

But make no mistake, the eventual outcome to all this is captured brilliantly in this quote by Ludwig Von Mises, the Austrian economist:

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
The credit expansion happened between 1980 and 2008, there was a warning shot which was soundly ignored by ignorant central bankers, and now we have more, not less, debt with which to contend.

Venezuela has already entered the ‘total catastrophe’ stage for its currency, but Japan will follow along, as will everyone eventually who lives in a country that finds itself unable to voluntarily abandon the sweet relief of booms enabled by credit creation.

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