tv Boom Bust RT August 20, 2019 9:30am-10:00am EDT
this is now aim to further lower real interest rates for companies essentially amounting to a rate cut the new l.p.r. will be set on tuesday and subsequently on the 20th of each month as the benchmark rate for banks to price in new loans now more than $30.00 central banks around the world have cut interest rates just this year as countries move to shore up their economies amid rising concerns of a global growth and trade conflicts germany's central bank just issued a warning that the country could be slipping into recession as g.d.p. for the 2nd quarter contracted point one percent this further puts pressure on the rest of the country as the e.c.b. to step in as the fall of europe's largest economy will certainly have widespread implications for the rest of the world the e.c.v. is now expected to cut rates which are already at historic lows and signal a restart of a trillion euro bond buying program in order to spur on growth germany is now just one of several major global economies now facing potential recessions the u.k. economy shrunk in the 2nd quarter and growth pretty much flat lined in italy and is
on the cusp of defaulting with a debt at 132 percent of g.d.p. mexico just cut its rays on friday and initial data suggest that brazil just slipped into recession in the 2nd quarter and finally hong kong hong kong where the protests have now gone on for 11 straight weeks disrupting businesses and sending real estate prices plunging as critical global financial hub the protests are now wrecking havoc on the local economies as well as having rippling effects across multiple markets option traders and now ramping up bets against the hong kong dollar they got premiums on the put options have crept up to the highest level since 2016 as traders bet on the dollar peg breaking this is a really interesting time right now the home come dollar is pegged to the u.s. dollar but the economy is now slowing and now the protests are compound in those problems the h.d.d. has now tumbled to the lower limits of the currency bag so the home a. has had to puke up billions and billions of dollars to defend h k d 9000000000
dollars so far this year so when you peg our currency to another the anchor you actually adopt their monetary policy you adopt their yield curve essentially you let jesus take the wheel and let them run yark economy it usually works pretty well you follow the anchor but if one is in decline while the other and are still strong such as the case with the us now on a relative basis you now have to import the tighter monetary policy and race card of the us this tells disaster for that one that's and decline so we'll have more on that in a bit when we join sarah and home com. and to break down all of this and the increasing the interesting state of the global economy we are joined by peter schiff c.e.o. of euro pacific capital and horwitz chief market strategist trading peter this seems to be a moment of high instability and uncertainty with experts disagreeing on what the
numbers we can all see mean and speculating on what numbers are coming to settle some of these arguments about the direction of the economy of china germany the u.s. and the global economy so i'll just 1st ask both of you to give us your basic assessment of where those 3 big economies are right now and where the global economy is heading in this moment peter what do you go 1st. well 1st of all of the rate cuts that your reporter just mentioned globally they're not going to help the situation the problem in the global economy is not that interest rates are too high it's that the amount of debt is too high and the reason there is so much debt is because central banks have already kept interest rates too low and lowering them even more doesn't solve the problem it actually makes the problems bigger because it encourages even more debt and so this is counterproductive and i think the us is in the worst shape i think we are on the verge of finishing the great recession that we started in 2008 only the problems are much larger today than they were then and
i think the back half of this recession is going to be far more severe than the front half. and bob what's your take on the same question on the risk of recession in the u.s. and germany a big slowed in down in china and the prognosis for the global economy and 210-2020 . and why i think that the the world economy isn't obviously in a dire straits right now you can see that there rushed on the lower rates as peter was saying i think death creates a problem and of course there's way too much debt and i think of china doesn't do something with that with the trade deal i think they're going to be a lot more troubles of course it's always hard to get accurate numbers out of china but they're in trouble as it is they had trouble before all this started and they're only to get worse but they don't really care about what goes on because they can hold busy out longer here we've got issues i think we're in the very early stages of recession here and i'm not as dire on the situation in the states as peter is but i do think that we are going to recession i do see
a fairly big selloff coming out again timing that saw i could never do that but i can tell you that i would not be surprised to see a 25 to 40 percent haircut and equities because right now the fed continues to kick the can down the road is addressing the real problems letting free markets trade and let the interest rate markets trade we are supposed to because if they wanted a free market interest rates would be naturally higher because all these peer to peer lenders are else are lending out tons of money and the bankers buying those loans from them versus lending to the public so they're creating a massive amount of debt even going to this new 3 and a half percent more again have we seen this movie before so at the end of the day i think we've got troubles i think a big recession is coming but i still think that will be ok when this is over and i don't think it's the end of the world i think it's a natural sell off from an overbought market that's been totally overvalued with the chase for you so pay it out we know you love gold but now we're seeing a kind of a slight rotation out of call it and other safe haven assets after that big need jacquie action on wednesday last week and looks like the market has kind of calmed down a bit and while we know that things aren't great fundamentally it looks like the
investors in the meantime are going in a risk on mode to capture the short term stimulus so what's your move and how are you playing that's right taishan. well i'm not rotating out of gold in fact people should be buying more gold on this deb i think anything below 1500 now is a good entry point to buy into gold is specially when people realize or traders that the only reason that we've saved the market from collapse is because the central banks of capitulated particularly the fed we are now cutting interest rates were headed back to 0 they have end quantitative tightening the next move is back to quantitative easing this is all designed to help the stock market but it's going to help gold even more than the stock market because all the money that they have to print to prop up these stock bubbles is going to be better for gold than it is for stocks of course the stocks that will benefit the most are gold stocks and so if you want to buy stocks and you're a speculator that's where you should be looking and just saying take fundamentalist
so you have seen quite a lot over the years as well and every single recession we've had now is actually like a poster child now we kind of blamed on in the 1990 s. there was a savings and loan crisis in the 2000 and with the dot com bubble bursting in 2007 it was the subprime mortgages so while one of the poster child of this one day. it will be the 1st of the butchering of what's going on with the federal reserve that it has a number of the 1st and foremost because they're always behind the curve and they're trying to react when the horse already out of the barn so that will be it will be i think it will be another financial i mean if you look at the debt structure of what's going on right now and of course united states americans are typically by the month societies as long as they have a job and they can afford to pay for by the money they're going to be buying well who's going to pay for all this that when we have some slowdown which are already starting to see so i think the fed by the way they're acting right now and allowing people to get in know out of this cheap money or supposedly cheap money will
eventually create the bigger problem and i grew peter 1500 gold is a great level to get in which is what we talked about in fact i wrote about this morn. thanks so much peter schiff and todd horowitz thank you both for insight. thanks guys. in argentina voters are angry out over the struggling economy put their support behind alberto fernandez the opposition candidate in the primary election instead of the current president merissa mccreight argentina is already struggling with the economic turmoil and the outcomes of the primaries with salt in the market on trees markets collapsing legal journalist molly barrows contributor with america's lawyer joins us now with more so molly why would the markets respond like this to voter support. in short it's money and there's just not enough of it to go around the country so fernando says the country needs to renegotiate the repayment
terms of the loan it took from the international monetary fund or i.m.f. because in the current conditions he says the country simply won't be able to do it otherwise he acknowledges that the loan did help the country in a bailout but says debt restructuring is desperately needed for to protect the country's financial interest so under president mccree argentina signed a stand by agreement with the i.m.f. in mid 2018 for $57000000000.00 that is the largest in the country's history fernandez described alone as harmful because he says it puts the country essentially in submission to the i.m.f. and he says they simply can't repay them under these conditions and argentina is latin america's 3rd largest economy the peso currency is struggling annual inflation has climbed about 50 percent and after the election that didn't help the peso plunged 20 percent in argentine stocks lost 30 percent investors had put their faith in the craze efforts to tighten spending which was part of the deal when he got that loan but the people it seems are disillusioned by the country's economy under mccrae's leadership so it looks as if they are throwing their support behind
his challenger fernandez. in terms of explaining the crisis right now. front of the show mark weiss book for the some center for economic and policy research has an op ed today in the new york times on the question of how do we explain this crisis there but he points to something that very much in the front of the minds of argentina voters which is the as you mentioned the role of the i.m.f. here the biggest. bailout agreement in their history what wall did that agreement play in mr current political troubles and consequently the other on the flip side mr fernandez is rising political prospects. yes well you nailed it the i.m.f. is not a bad peg to hang your hat on if you're mccree i mean rather if you're fernandez because it is simply not a very popular organization in the country of argentina it's widely blamed for the country's 2001 economic collapse there and mccrae promise to rein in spending as part of the loan deal that he made with the i.m.f.
and unfortunately that meant making cuts that were seen as hurting poor middle class families especially under soaring inflation and unemployment and poverty rising as well so mccree had an ally at the time in the then head of the i.m.f. christine lagarde now she is leaving the organization after being tapped to head up the european central bank and that essentially is mccree without an international ally on his economic initiatives during this re-election bid so while the $57000000000.00 i.m.f. bailout remains there are questions if the next managing director will be a sympathetic to the president in argentina since legard included some interesting provisions on social spending and gender equality and she worked also to sell the deal to the public understanding that the organization didn't have the best reputation in latin america and she was trying to make some of those ackley you know basically acquiescence to that loan to to try to renew support for the i.m.f. in latin america so considering the country's economic struggles continuing struggles impressed rationed and marquees lost by a wide margin of votes it was
a political risk he took when he made that deal with the i.m.f. made that loan but it looks as if it did not. payoff it might have been a gamble that hurt his chances as you saw he lost in this primary election and his chances of winning the upcoming general election as a result are seen as very damn so it was the i.m.s. relationship with argentina that could have played a downfall in mccready's losing in that primary election. report legal journalist molly barrows thanks for joining us. thank you so much. time now for a quick break but hang here because when we return protests continue to rock and we are on the ground correspondents brings us the latest on the unrest. and as we go to break here the numbers at the.
join me everything on the elec so i'm i'm sure and i'll be speaking to yes of the world of politics. i'm sure. i'll see that. in this community there are people who believe that it's ok. it's really hard there are no jobs and you see the kids and ask and as a parent. i can come up with arguments there's a lot of conflict in the game between the 2 most of the conflict i would say.
most of them is made. close one on each other's each other is good because the state of california alone makes $6000000000.00 a year of prison complexes. live where. you don't care. welcome back here in the united states the trump administration is making a full court press to tamp down growing chatter about a possible u.s. recession and then arguing that the ongoing chatter a fight with china is not affecting u.s. consumers or dragging on the u.s. economy on sunday president trump said he is not ready to resolve his spite with china the latest sign of a porch a protracted and costly debacle ahead for the world's 2 biggest economies also on
sunday the administration's economic message man warns kudlow entreated wiser peter navarro did their best on sunday talk shows to amplify mr trump's optimistic take on the u.s. economy mr navarro bristled repeatedly at any suggestion that u.s. consumers were paying the price of the trump tariffs and in an eye raising appearance on fox news mr kudlow seemed to struggle to clearly state the message of the day which was quote there is no recession in sight. the united states will extend a reprieve given to huawei that allows u.s. companies to sell to the chinese telecom giant as long as they're selling repairs or updates to existing systems u.s. commerce secretary well ross announced the decision in a statement on monday say as we continue to urge consumers to transition away from hallways products we recognize that more time is necessary to prevent any disruption the decision offers relief to companies like google whose android operating system is used by phones the company had previously warned that failing
to update the operating systems could create security concerns it should be noted that hallway has also released their own operating system called harmony recently and currently use on smart t.v.'s this is the 2nd abatement by the u.s. since adding huawei to the so-called entities list. and as the hong kong protests are becoming increasingly violent investors and traders are growing concerned about the impact on the local economy and the financial stability of one of the most important trading hubs in the world the most recent concern is the currency peg to the u.s. dollar which is rapidly deteriorating katie has been pegged to the u.s. dollar since 1904 and for 36 years the u.s. was the growth engine of the world and followed hong kong used to be the biggest port in the world it was the dollar based exporter and re exporter of the world but now we see a shift caused by china china has built up its southern ports and essentially choked off hong kong before 2001 hong kong made up 30 percent of china's g.d.p.
but today it's barely 2 percent it's functionally an important today is a net importer and relies on china for 80 percent of its services exports so if we look at hong kong today it really doesn't make sense to peg it to the u.s. dollar as the macros have changed drastically couple that with the perfect storm of violent riots a slowdown of chinese capital inflows and a tremendously over leveraged banking system that is 9 times g.d.p. looks like it's going to crack that may now have to defend this peg and it's quickly burning through its reserves to do it this is now being questioned as the 2 economies are too divergent and it seems to make more more sense to peg it instead to the r. and b. with more in hong kong we got a fair amount to bring us the latest. protests continued over the weekend for the 11th straight week with 3 protests approved by the hong kong police on saturday alone. after last weekend's
violent protests police had a water cannon vehicles on standby to use if needed so far over 700 protesters have been arrested. the demonstrations began in opposition of an extradition bill. which hong kong chief executive kerry lamb now claims is dead but for protestors this simply wasn't enough demanding the complete withdrawal of the bill and anti-government protesters are now including even more demands from their government hong kong police held a press conference in an effort to respond to the public many fear that this will turn into some sort of revolution now there are reports showing chinese army on their way and gather that the change on border at one point will you allow them to come in according to the basic law and the national authority to turn out he only rests with the home government as well as the chinese central government therefore
the police and not in a position to comment on the u.s.s. liberty of turning over here only but i can guarantee that the home police capable on saturday protests began in the afternoon with a peaceful teachers march followed by another peaceful pro-government rally that lasted just one hour organizers said 476000 people attended the pro police rally while police said only 108000 were present people gathered in support of the island's police force there hope the government can restore peace to their city there was a hive you. know i walked home called to bring back peace because these people are making hong kong a real mess but tensions grew later saturday evening at the montauk police station protesters began throwing eggs and other things out police then i'm police responded by taking to the streets clearing them from protesters they showed up in full riot gear with police cars 1st several blocks clearing the street we saw no
violence tonight but we were prepared just in case the police fired tear gas it seems like the protesters called it an earlier night than expected but they're looking for a schedule of the protests that will take place tomorrow. on sunday anti-government protesters showed up and kept their word it's our 2nd day of protests here in hong kong and you can see that people are starting to move toward this is the start of where the protesters are scheduled to be walking to the current park where causeway bay and 8 leading up to look like they're going to be thousands of protesters here today sunday's theme peaceful rational and nonviolent there were groups from 2 sides the peaceful rationality camp and the valiant resistance camp which include those wearing masks. or they yellow dog we're here because the hong kong government does not listen to our 5 demands and also because of the police brutality so that's
why we're here to walk for freedom but we are not giving up because we have a conscience and i will peacefully walk today and i will be with the pro peaceful camp and today we will not be divided in the crowd were also several families with children is ok but when a some go down i will take them to much to help protest organizers from the civil human rights front took the stage in the middle of victoria park leading crowd chants. was the mood of those god and calling for support for their cause decided found repression is already being being carried out by the home police force almost equally own ready to head home the actions of their own government and don't call police force the international community's image of a few of my home is being destroyed but i don't believe that by that heavy rain it didn't stop the protestors who march from a packed park to the streets well into the night protesters marched police with
laser pointers after police previously claimed them to be dangerous weapons if so far lisa has you cannot go back on sunday night the hong kong government responded to the rallies by voicing their concern for the peaceful yet disruptive protests. it's causing several road closures it's most important to restore social order as soon as possible the government will begin sincere dialogue with the public when everything has calmed down but demonstrators ensured they would continue their protests every week we will stand up. every week until we get what we are reporting and hong kong. parties. then finally who gaiety the luxury carmaker unveiled their latest limited edition vehicle at a classic car show in california on friday with only 10 to be made the cento dead
she will cost a massive $9000000.00 each the gentle dead she is powered by an 8.0 lead or 16 engine supplying nearly 1600 horsepower the vehicle goes from under 6 from 0 to 60 in under 2.4 seconds the top speed of the super car is electronically limited to 236 miles per hour oh is that all super car gets its inspiration from the blue god e.b. one's hand of the early ninety's gentle did she means 110 in italian an easy 110 more manufacturing it is really near where lamborghinis and ferrari's are made the e b 110 mark a resurgence of the big adi brand that had gone had been gone from the world stage since the 1950 s. well at $9000000.00 you know i don't know does it look like a $1000000.00 car i don't know it's a beautiful car but i have to say it's like a car that depreciating asset why would you ever want to spend $9000000.00 on that not to mention the repairs and maintenance on something like that that's crazy i
mean maybe it works differently at this level of a collectible it's not just like you know the car that starts depreciating once you take it off the lot i mean it's a collector's item we'll see notes on a car like that is about a quarter of the price every single year so you're paying about $2.00 in maine a. year that. in saying that and by this time you can catch a boom bust on direct t.v. channel 321 dish network to 80 or streaming 247 on pluto t.v. the free t.v. ad to 79 or as always it is up at youtube dot com slash boom bust are to see you next on.
some lists lists. clicked. and very well might continue watching on since last. cast calendar is dark alfonzo a long day and there's changing page change dard served. his 1st words were at a low a see or a challenging post you've got 2 years to live. i have no doubt that what happened was prevent. this let's concentrate market is
a $1000000000.00 industry these companies how does huge financial motivation to sow these products there are numerous stocks showing that doctors were keen to chest x. ray concentrates for the insights of its own that patients won't give them doctors the wrong stoplight. turned into stone why they would give me some security procedures day. and people still die and i'm always question or so i tried being allowed to live when so many have. seemed wrong. when all were all just all. to me the world yet to shape out is they become agitated and engagement because betrayal. when so many find themselves worlds apart when she's to look for common ground.
why paradise with some ground. around the experimentation field but agricultural chemicals we know that these chemicals have consequences they are major irritants there's no question otherwise why would that the chemical company workers themselves be geared up and suited up locals attempt to combat the on regulated experiments that often in day you have many of these people who have one foot into the biotech pharma and the other foot in the government regulatory bodies this kind of collusion is reprehensible while the battle goes on the chemicals continue to poison hawaii and its people so one has to ask the question whether there is a form of environmental research going on in hawaii whether these companies feel they can get away with those because the people have less political power.
let me. give me too much as. we said. there's an awful lot in common i'm old but i'm also the most companies you know it's. easy to please when i. was come to see most people and most people came in nobody goes from didn't you know to speak to c.b.c. just put on you i'm sure i've. been with them and i'm going to see the notion of. you kind of these people will. always stay. in the hotel your list too.
the u.s. confirms its 1st test of a cruise missile previously banned by a treaty signed between moscow and washington more than 30 years ago. also this hour u.s. attorney general william bart removes the acting director of prisons after the suicide of geoffrey epstein we discussed the conditions at the jail where i've seen took his own life with his former lawyer is fundamentally wrong with that is that jeffrey upstream did not belong or not facility to begin with. and it's been revealed a british social media network aimed at young muslims isn't part of the u.k. government plan to tackle radicalization.