“We Are in a Debt Trap” - Nouriel Roubini on 10 ‘Megathreats’ to Our World and How to Stop Them

Dec 16, 2022 | Nouriel Roubini is an economist, a professor in New York, a global economic consultant and an author who, amongst many distinguishing things, was one of those who foresaw the 2008 credit crunch and financial crisis.

His latest work is called ‘Megathreats’, and it details 10 trends that make it more likely than not that we are heading for a global economic crash of stagnant growth, debt crises and high inflation that will cause decades of dystopian suffering and injustice. No wonder they call him Dr. Doom.

In this episode, Nouriel joins Krishnan to talk about climate change, job-displacing artificial intelligence and our future.

Produced by: Imahn Robertson

Gefährlicher Umgang mit der Inflation: Die Notenbanken verkleinern ihre Zinsschritte und wecken damit unbegründete Hoffnungen

NEUE ZÜRCHER ZEITUNG: In den USA, im Euro-Raum und in der Schweiz haben die Notenbanken allesamt etwas Tempo aus ihrer Politik steigender Zinsen genommen. Die Verlangsamung bedeutet aber nicht, dass die Währungsbehörden das Problem der hohen Inflation bereits unter Kontrolle haben.

Weniger Güter für mehr Geld: Die Inflation macht sich auch beim Einkauf bemerkbar. | Gaetan Bally / Keystone
KOMMENTAR
Zuerst die gute Nachricht: Im laufenden Jahr haben die grossen Zentralbanken endlich den Ernst der Lage erkannt. Sie haben realisiert, dass die lange Zeit totgeglaubte Inflation noch immer quicklebendig ist. Und sie haben auf das Hochschnellen des Preisniveaus mit einer Straffung ihrer zuvor extrem expansiven Geldpolitik reagiert. So auch diese Woche: Nachdem am Mittwoch die amerikanische Notenbank den Leitzins erhöht hatte, doppelten am Donnerstag die Schweizerische Na¬tionalbank (SNB), die Europäische Zentralbank (EZB) und die Bank of England (BoE) nach.

Grosse Unterschiede zwischen den Währungsräumen

Doch so einheitlich die geballte Ladung an Geldpolitik erscheinen mag, so gross bleiben die Unterschiede zwischen den Währungsräumen: Schon ziemlich weit bei der Zinsnormalisierung sind die USA. Dort hat das Fed nach zögerlichem Beginn die Zügel bereits so stark angezogen, dass nun das Tempo leicht gedrosselt wird. So ist der Leitsatz am Mittwoch nach vier Zinsschritten um je 0,75 Prozentpunkte nur noch um 0,50 Prozentpunkte erhöht worden. Dies auch deshalb, weil Amerikas Geldpolitik bereits bremsend auf die Konjunktur zu wirken beginnt. » | Thomas Fuster | Donnerstag, 15. Dezember 2022

Bank of England Raises Interest Rates to 3.5% in Ninth Increase in a Year

THE GUARDIAN: Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

The Bank of England has raised interest rates by 0.5 percentage points to 3.5% in an effort to combat double-digit inflation that has caused a widespread cost of living crisis.

Members of the central bank’s monetary policy committee (MPC) voted to increase the cost of borrowing after the consumer prices index in November showed annual inflation of 10.7%.

A majority of the Bank’s rate-setting committee said the ninth increase in the base rate over the past year was necessary to bring down inflation by 2025 to its 2% target. » | Phillip Inman | Thursday, December 15, 2022

Bank of England Poised to Raise Borrowing Costs to Combat Inflation

THE GUARDIAN: Financial markets expect 0.5 percentage point increase as fears mount that UK is about to enter long recession

The Bank of England is poised to increase the cost of borrowing for households and businesses at its interest meeting today, as fears mount that the UK economy is about to enter a long recession.

Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.

The consumer prices index (CPI) fell back from 11.1% in October to 10.7% last month, according to data released Wednesday, mainly from weaker increases in petrol, clothing and food, but remains well above the BoE’s 2% target.

Jeremy Hunt has indicated he will welcome a tough stance on rates by officials at Threadneedle Street after he said bringing down inflation was his main mission. » | Phillip Inman | Wednesday, December 14, 2022

FTX Boss Sam Bankman-Fried Charged with Defrauding Investors by US - BBC News

Dec 13, 2022 | Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, has been charged with defrauding investors of billions of dollars by the US Securities and Exchange Commission (SEC). The SEC said Mr Bankman-Fried, who was arrested in the Bahamas on Monday, had “built a house of cards on a foundation of deception”. It is alleged Mr Bankman-Fried used FTX customers’ funds for his privately-held crypto hedge fund, Alameda Research LLC. A court filing shows FTX owed its 50 largest creditors almost $3.1bn.

Cuba: High Prices, Lines and Shortages | DW Documentary

Oct 22, 2022 | In Cuba, the socialist project begun by revolutionary hero and former president Fidel Castro is teetering on the verge of failure. The nation is sinking deeper into crisis, with many people’s daily lives marred by shortages of food, medicine and electricity.

Cuba has been subject to sanctions for decades. Despite recent attempts at reform, the country is increasingly isolated and economically dependent. A currency reform enacted in 2021 is also causing major problems, with inflation soaring and prices skyrocketing. Food is scarce, and lines in front of the few state-run stores are getting longer and longer.

Poverty is on the rise. Even the famous ingenuity of the Cuban people is reaching its limits as they try to cope with the day-to-day effects of the crisis. Images of bygone revolutionaries are fading in the streets the capital, Havana, and all over the island. Official voices continue to broadcast the state’s ideology, but ordinary people are losing hope that things will improve.

Jeremy Hunt Sets Out Sweeping Reforms to Financial Sector

THE GUARDIAN: Chancellor says plans will ensure City ‘benefits from dynamic, proportionate regulation’

The chancellor has announced plans to reform and repeal a number of City regulations, including rules originally meant to protect the UK from another financial crisis, in order to “unlock” investment and “turbocharge” growth across the UK.

Jeremy Hunt’s package of more than 30 reforms was announced as he travelled to Edinburgh to meet a group of chief executives from banks and insurers, who the government hopes will be in a stronger position to grow and compete with international peers as a result of the deregulation drive.

The package, known as the “Edinburgh reforms”, is wide-ranging, spanning from plans to consult on a new central bank digital currency to changing tax rules for investment trusts involved in real estate, and reforming rules around short selling – where investors bet that the price of an asset will drop.

The government said it also plans to trial a new trading venue that would operate intermittently but allow companies to raise money from investors before officially floating shares on the public market. » | Kalyeena Makortoff, Banking correspondent | Friday, December 9, 2022

Daniel Lacalle: Money Collapse and the Global Slowdown

Dec 7, 2022

For Daniel Lacalle’s website, click here.

City Faces Fresh Post-Brexit Blow as EU Moves to Restrict Certain Trades

THE GUARDIAN: Battle focuses on what EU sees as bloc’s over-reliance on London’s clearing houses handling euro-denominated derivatives

The City of London faces another post-Brexit blow to its dominance after the EU moved to require firms to settle more financial-risk reducing trades within the bloc.

The plan centres on trades in securities known as derivatives, and on financial market clearing houses, the intermediaries that enable the transfer of funds to sellers and financial products to buyers. Handling trillions of transactions each year, they are deemed an essential part of financial market plumbing that reduces risk.

Since Britain voted to leave the EU in 2016, the subject has become a battleground, as Brussels seeks to end what it sees as an over-reliance of European firms on London for euro-denominated derivatives trades. » | Jennifer Rankin in Brussels | Wednesday, December 7, 2022

Germany to Smooth Entry for Foreign Skilled Workers | DW Business

Dec 2, 2022 | The German government is drafting new plans to smooth the entry process for foreign skilled workers. It's a move that companies say is long overdue: The country's aging workforce is a growing liability, while positions in IT and software development are notoriously hard to fill. More companies are now looking abroad for help.

Brexit Added Nearly £6bn to UK Food Bills in Two Years, Research Finds

THE GUARDIAN: Cost of food imported from EU rose because of extra red tape, with poorest most affected

Brexit added almost £6bn to UK food bills in the two years to the end of 2021, affecting poorest households the most, research has found.

The cost of food imported from the EU shot up because of extra red tape, adding £210 to the average household food bills over 2020 and 2021, London School of Economics (LSE) researchers discovered.

As low-income families spend a greater share of their income on food, the impact of Brexit on their purchases was disproportionately greater, they said. » | Lisa O'Carroll, Brexit correspondent | Thursday, Dece,mer 1, 2022