Tagged: Lynette Zang. Michael Snyder
August 31, 2018 at 8:51 pm #8372
Just Before The Crash: The 2 Patterns to look for! By Lynette Zang
September 1, 2018 at 1:13 am #8373
Economic Doom Returns: Emerging Market Currencies Collapse To Record Lows As Global Financial Chaos Accelerates
By Michael Snyder
After a little bit of a lull, the international currency crisis is back with a vengeance. Currencies are collapsing in Argentina, Brazil, India, Turkey and other emerging markets, and central banks are springing into action. It is being hoped that the financial chaos can be confined to emerging markets so that it will not spread to the United States and Europe. But of course the global financial system is more interconnected today than ever before, and a massive wave of debt defaults in emerging markets would inevitably have extremely serious consequences all over the planet. It would be difficult to overstate the potential danger that this new crisis poses for all of us. Emerging market economies went on an unprecedented debt binge over the past decade, and a high percentage of those debts were denominated in U.S. dollars. As emerging market currencies collapse, it is going to become nearly impossible to service any debts denominated in U.S. dollars, and that could ultimately mean absolutely enormous losses for international lenders. Our system tends to do fairly well as long as everybody is paying their debts, but once the dominoes begin to tumble things can get messy really quickly.
Let’s start our roundup today with India. While India is currently not in as bad shape as some of the other emerging markets, the truth is that they could get there pretty rapidly if they keep going down this path.
On Thursday, concerns about rising oil prices drove the Indian rupee to a brand new all-time record low…
The Indian rupee fell to a record low on Thursday morning, following a declining trend all year — which economists attributed to rising oil prices, broader emerging market concerns, and strong month-end dollar demand.
It slid to 70.8100 against the dollar, after a previous new low just a day before at 70.475. That marked a 10.97 percent decline since the start of the year.
But at least India is doing much better than Argentina.
The Argentine peso collapsed to another all-time record low on Thursday, and at this point it has fallen more than 45 percent against the U.S. dollar so far this year…
The Argentine peso crashed to record lows on the news. It saw steep losses in the previous session and collapsed another 15 percent to hit 39 pesos against the U.S. dollar on Thursday morning.
The peso is down more than 45 percent against the greenback this year, exacerbating pre-existing fears over the country’s weakening economy while inflation is running at 25.4 percent this year.
As Wolf Richter has noted, the Argentine peso was worth one U.S. dollar in 2002.
Today, it is worth 2.4 cents.
That is what a collapse looks like.
In an desperate attempt to stop the bleeding, the Argentine central bank raised interest rates to 60 percent…
On Thursday, the central bank said it was increasing the amount of reserves that banks have to hold, in a bid to tighten fiscal policy and shore up the currency. It hiked rates by 15 percentage points to 60 percent from 45 percent and promised not to lower them at least until December.
Yes, I know that looks like a misprint, but it is not.
Interest rates in Argentina have not been raised to 6 percent. They have been raised to 60 percent.
Could you imagine what 60 percent interest rates would do to the U.S. economy?September 5, 2018 at 11:31 am #8403
This is another great youtube by L. Zang. This one is a MUST watch folks! Thanks for posting Tony. I don’t know how much more warning we can be given of what lies just ahead. There is a chorus of wise voices that are outside the box of global “truthspeak” sounding the alarm. Get out of debt, and get your paper money and stocks out of banks and into hard assets that have and will have/hold value in the coming days.September 5, 2018 at 1:22 pm #8406
This is another great youtube by L. Zang. This one is a MUST watch folks! Thanks for posting Tony. I don’t know how much more warning we can be given of what lies just ahead. There is a chorus of wise voices that are outside the box of global “truthspeak” sounding the alarm. Get out of debt, and get your paper money and stocks out of banks and into hard assets that have and will have/hold value in the coming days.
Thanks Vlad. Actually I interviewed Lynette Zag today and I hope to have that show out by tomorrow morning. It’s jammed full of useful information!
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