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2023: You Wanted Endless Stimulus, You Got Stagflation. | dlacalle.com
2023. Stagflation After Failed StimulusAfter more than $20 trillion in stimulus plans since 2020, the economy is going into stagnation with elevated inflation. Global governments announced more than $12 trillion in stimulus measures in 2020 alone and central banks bloated their balance sheet by $8 t
Economix. My Weekly Video Blog | dlacalle.com
We have just started a weekly videoblog where we discuss the latest macro, markets, and finance news. Please subscribe to my channel and like the videos.In this episode, we discuss:How 2022 killed MMTWhy buy goldThe earnings recession riskOil companies and the outlook for oil pricesBanks and rising
Did Rate Hikes Kill the Crypto Star? | dlacalle.com
If we look at the staggering decline of the cryptocurrency index in 2022, we may understand an uncomfortable truth. Cryptocurrencies were created as an alternative to the monetary insanity in the fiat currency world yet became a massive bet on the money expansion they were supposed to combat. Crypto
Latin America Slow Descent into Interventionism | dlacalle.com
The latest estimates from consensus for the mainLatin American economiesshow a continent facing a lost decade. The region GDP growth has been downgraded yet again to a modest 1.1% for 2023, with rising inflation and weakening gross fixed investment. Considering that the region was already recovering
The G7 Cap on Russian Oil Is a Subsidy to China | dlacalle.com
There are many mistakes in the G7 agreement to put a cap on Russian oil. The first one is that it does not hurt Russia at all. The agreed cap, at $60 a barrel, is higher than the current Urals price, above the five-year average of the quoted price and higher than Rosneft’s average netback price.Acco
Keynesian Policies Have Left High Debt, Inflation and Weak Growth | dlacalle.com
The evidence from the last thirty years is clear.Keynesian policies leave a massive trail of debt, weaker growth and falling real wages. Furthermore, once we look at each so-called stimulus plan, reality shows that the so-called multiplier effect of government spending is virtually inexistent and ha
The European Union’s Misguided Energy Price Cap Proposal | dlacalle.com
Only 15 years ago, theEuropean Unionproduced more natural gas than Russia exported, according to the EIA. Repeating past mistakes and maintaining a failed energetic interventionist policy would only worsen what is already a structural disaster.The prohibitive cost of electricity and gas in Europe is
Inflation or Recession | dlacalle.com
While many market participants are concerned about rate increases, they appear to be ignoring the largest risk:the potential for a massive liquidity drain in 2023.Even though December is almost here, central banks’ balance sheets have hardly, if at all, decreased. Rather than real sales, a weaker cu
Tax Cuts Do Not Cause Inflation. Printing Does. | dlacalle.com
Photo byformPxHereThe narrative to attack any tax cut and defend any increase in government size is reaching feverish levels. However, we must continue to remind citizens that constantly bloating government spending and increasing the size ofmonetary interventionsare some of the causes of the widesp
Fed pivot is not an investment thesis | dlacalle.com
In a recentBloombergarticle, a group of economists voiced their fears that theFederal Reserve’s inflation fight may create an unnecessarily deep downturn. However, the Federal Reserve does not create a downturn due to rate hikes; it creates the foundations of a crisis by unnecessarily lowering rates
Global Rate Hikes Strike the Wall of Debt Maturity | dlacalle.com
More than ninetycentral banks worldwideare increasing interest rates. Bloomberg predicts that by mid-2023, the global policy rate, calculated as the average of major central banks’ reference rates weighted by GDP, will reach 5.5%. Next year, the federal funds rate is projected to reach 5.15 percent.
The U.S. Economy Is Not Stronger | dlacalle.com
The headline gross domestic product (GDP) figure for the third quarter seemed to signal areturn to growth and a significant improvement from the previous readings. Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the third quarter of 2022, in contrast to a decrease of
Liz Truss Is Not to Blame for The U.K. Market Turmoil. The Bank of England Is | dlacalle.com
We live in strange times. The same people that vehemently defended massive deficit spending and money printing as the solution to the global economy now blame the turmoil of the UK bond and currency markets on a deficit-increasing budget.I find it astonishing that no one of the so-called experts tha