A Submerging Global Economy

By Egon von Greyerz – Re-Blogged From Gold Eagle

Many emerging markets are now turning to submerging markets as country after country is experiencing falling economies, currencies and stock markets.

The currency is often the best indication of a country’s economic health. Just look at these six currencies submerging into obscurity:

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Argentina Currency Crisis Pain Is Spreading

By Bloomberg – Re-Blogged From Newsmax

Tommy Samson is explaining why he’s been forced to scale back business amid Argentina’s financial-market rout. His Buenos Aires firm imports surgical equipment such as sutures for stitching wounds, paying in foreign currency. Then he sells them to local customers in pesos.

The last link in that chain is breaking down — because Argentina’s currency is in freefall. It’s lost half its value this year, and some 20 percent this week alone. The slump threatens to spread havoc through the $640 billion economy, rupturing supply chains for businesses and straining the finances of households.

And it’s casting a shadow over President Mauricio Macri’s prospects of winning re-election next year. Even Argentina’s most market-friendly leader in more than a decade has struggled to restore investor confidence.

Image: Argentina Currency Crisis Pain Is Spreading
(Dreamstime/Siempreverde22)

“There’s no clear price reference after the peso plunge.”

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China May Have to Resume US Soybean Purchases in Weeks

By Thomson Reuters – Re-Blogged From Newsmax

China may have to start buying U.S. soybeans again in coming weeks despite the trade war between the two countries as other regions cannot supply enough soybeans to meet China’s needs, Hamburg-based oilseeds analysts Oil World said on Tuesday.

In July, China imposed import tariffs on a list of U.S. goods, including soybeans, as part of the trade dispute with the United States. China is the world’s largest soybean importer and has been seeking alternative supplies, especially in South America, where supplies available for export are down.

2018 Third-Quarter Forecast

Re-Blogged From Stratfor

Table of Contents

(ALY SONG-POL/JOHANNES EISELE/HULTON ARCHIVE/MLADEN ANTONOV/TIMOTHY A. CLARY/ABID KATIB/KATJA BUCHHOLZ/DAVID MCNEW/ATTA KENARE/FOverview

China Remains in the U.S. Crosshairs. The United States will impose tariffs, sanctions and blocks on investment and research in a bid to frustrate China’s development of strategic technologies. China not only has the tools to manage the economic blow, but will also accelerate efforts to lessen its reliance on foreign-sourced technological components.

Trade Battles Fall Short of a Full-Fledged War. Trade frictions will remain high this quarter as the White House continues on an economic warpath in the name of national security. U.S. tariffs will invite countermeasures from trading partners targeting U.S. agricultural and industrial goods. As Congress attempts to reclaim trade authority, the White House will refrain from escalating these trade battles into an all-out trade war.

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Why Argentina’s Leader Is in for a Tough 2019

Re-Blogged From Stratfor

Highlights

  • Argentina’s request for a standby loan from the International Monetary Fund will force the country to carry out tighter fiscal measures, such as reducing the transfer of funds to the provinces.
  • As a result of his decision to negotiate a deal with the IMF, President Mauricio Macri will have a more difficult time gaining congressional support for economic and labor reforms.
  • Although divisions persist in Argentina’s political opposition, worsening economic conditions will encourage Macri’s rivals in the next quarter, hurting the president’s chances of winning re-election in 2019.

State workers demonstrate outside Argentina's Congress in Buenos Aires in September 2016 during a national strike to demand the reopening of wage negotiations to compensate for high inflation.

(EITAN ABRAMOVICH/AFP/Getty Images)

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Inflation: The People’s Enemy…The Government’s Friend

By David Smith – Re-Blogged From http://www.Gold-Eagle.com

We can argue about the definition(s) of inflation until the cows come home – To be sure some economists spend a career trying to nail it down.

But for clarity’s sake, we’ll use the definition of the Austrian School (Mises.org) as an increase in the money supply. This is really the correct one, regardless of any bias of dogma, “schooling” or the mainstream media. Although most everyone defines inflation as an increase in the price of goods and services, this is actually a result.

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Here’s When Everyone Should Have Known That Argentina Would Implode

By John Rubino – Re-Blogged From Dollar Collapse

About a year ago, Argentina – which has inflated away and/or defaulted on its currency every few decades for the past century – issued 100-year government bonds. And the issue was oversubscribed, with yield-crazed developed-world institutions throwing money at the prospect of a lifetime of 7% coupon payments.

A contemporaneous media account of the deal:

Argentina sees strong demand for surprise 100-year bond

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