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tv   Boom Bust  RT  August 30, 2019 12:30pm-1:00pm EDT

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this is a group of us broadcasting around the globe and covering the world of business and finance and the impact on us all under and over you know and i'm. back today the fact that. watches and have them are elected in the current form or. carrot and helli are with the british american business association are on here the latest is. only one break in the crumbling wall of the global economy but could it all come crashing down when the king joins us again from amsterdam to break down the latest moves in the bond market and what could be a dark days ahead for the world so many stories that time. markets worldwide got a lift today with europe in the americas all rising about one percent to a race to watch this from last friday as china said it wished to resolve this protracted trade dispute with the united states with a call. now to the reason escalation china in the us are still discussing whether
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true chinese trade delegation will travel to washington in september to conduct the next round of face to face negotiations and its most recent statement on thursday china indicated that it might not move forward with the latest round of tariffs on the u.s. instead stressing the need for the world's 2 largest economies to the conflict the ministry of commerce spokesperson golfing said that china has ample means for. but thinks that the question should be discussed. should be discussed now is about removing tariffs as it is not conducive to china or the us both china and the us seem to want to call a ceasefire after this year long trade war on monday trump conceded that trumps phone calls from china did not happen the way he said they did and that it was his attempt to project optimism to boost markets trump has been increasingly concerned about the markets inability to breach 3000 and is agitated the destroyed war with china is dragging on months longer than expected. earlier this month china was
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unfairly designated as a currency manipulator by trump and the us treasury despite the fact that china only fulfilled one of the 3 criteria that identifies one us such that you. us treasury then sought out the i am that in order to back them up and to talk over possible remedies of what it believes is a rigged system unfortunately though from an illusion the i.m.f. on thursday found no fault with the recent weakening of the r. and b. saying that it was actually in line with the market fundamentals it further recommended that beijing should allow the currency to fall further as a trade war were to escalate in order to deal with the rising uncertainty the army has now become a new battlefield between the world's 2 largest economies the currency weakened for 11 days straight against the us dollar now trading at 7.08 $58.00 it has now depreciated 5 percent since june 28th seen offsetting the impact of u.s. tariffs boosting the competitiveness of chinese exports however this is actually a double edged sword and there is now a fear that a rapidly weaken arm be made lead to significant couple al blows out of china as
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where the currency manipulator label while it is in part symbolic it can actually open doors for very real consequences by doesn't it country as a currency manipulator it opens the doors for trump to set more formal punishment higher carrots and tougher sanctions now while it seems that the risk of a full blown currency wars are now at diminished both economies have been ravaged by the ongoing trade war so after all the dust settles who is in better shape now let's take a look at this this shows the 4 major central banks the e.c.b. the bank of japan the people's bank of china and the fed over in red and their total assets so what do you notice here this is a really interesting trend right now because all the world's central banks are kind of converging together and coming together at a very similar valuation up here but then there's the one the fed that's actually breaking the trend here everyone else has come to equal stands at about 5.2 trillion in assets but the fed has been on autopilot to reduce its balance sheet
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the reverse of everybody else they did so through a series of quantitative tightening starting at the end of 2017 but now this has resulted in a liquidity drain that is tightening the u.s. banking system. even after the fed has stopped its balance sheet shrinkage and less now noted that u.s. banks are nearing reserved scarcity this can actually be seen via the reluctance of large domestic banks to move out of 6 reserves and into the closest high quality liquid assets so basically a liquidity withdrawal here will result in a weaker risk appetite a far stronger u.s. dollar lower treasury yields while widening the libeler versus overnight swap spreads on top of that the fed is about to be hit with another liquidity of roughly $200000000000.00 over the next 2 months as a try to state its desire to build up its cash reserves so putting all of this together this implies that the liquidity it will likely continue to tighten and in order to stop this liquidity tiny from advancing further the fed may need to start
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another open markets operation sooner rather than later in order to inject reserves back into the u.s. banking systems now oh mon right now is just another fancy word for quantitative easing and the kind of looks to be inevitable if for no other reason then to monetize the upcoming wave of us to supply especially now if china decides to boycott or just outright sell us treasuries this possibility cannot be ignored as we're no closer to resolving the trade war the fed will that have no other choice but to resume q.e. and start expanding back its balance sheet again but tenderly as early as 4th quarter in order to provide liquidity and ease the funding pressures expected during the upcoming wave of treasury's supply. and the brics are drawing the plunge deeper into uncharted political territory this week when prime minister boris johnson barely an officer for one thing and determined to take the united kingdom out of the european union on october 31st with or without a deal asked the queen to suspend the parliament thereby limiting the time members of parliament would have to legislate against
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a no deal brogues it mr johnson made his power play the day after the parliamentary opposition finally formed a position setting a plan to block a hard brags that through largest. ation and while the parliamentary may new entry maneuver may make it much harder for opponents to stop mr johnson from moving forward he is now having to face resignations in his party petitions protests and polls rejecting his policy on bragg's it joining us now to discuss this fascinating the boggler hillary for which board member of the british american business association and former member of the scottish parliament tommy sheridan tommy you walk into the show let's start with you some of the major fallout here is in scotland where the leader of the conservative party there david said a noted opponent of our brags that has resigned she did not criticize mr johnson in her resignation letter but did write i have not hit in the conflict i have felt over brags that there is meanwhile also a legal push from m.p.'s asking scottish courts to block the suspension so my
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question is will there be more resignations along the lines of ms davidson here or perhaps even a major split among conservatives and can the scottish courts block prorogue. will list 2 questions it'll be silly the 1st one is yes i do think there will be more resignations and i think they'll be a lot of decent lake sions from within the tory party because when they go to parliament next choose the there will be motions proposed that will rely on rebel to get a majority in parliament let's just rule by it for a minute and consider what's happened we've got another late prime minister in the shape of borders joints and nonelected more not in the shape of queen elizabeth i skinned. to ag to suspend an elected parliament new if this was happening in venezuela america would be sending troops is an absolute shock of
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a situation that's developed mistook the nords he cannot get his new deal but it's that which is where. wants through parliament so instead of living up to the debate and take it all in the debate like come on he's running liquor co-oped and closing bell in the be and closing doesn't the parliament to try and avoid the embarrassment of being beat in parliament that's why you've got resignations you've got motions in parliament you're probably going to have a new confidence motion as at least 3 different court cases one in england 11 is go on the believe that is also no one in northern ireland so there are court cases all over the place saying clear to mr johnson you are acting with you you are abusing parliament the speaker of the house has called. an absolute disgrace and an assault on democracy an assault on democracy regis is what they've
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said mrs. nicholas still doing here in scotland rafale to mr johnson as a 10 point dictator that's. the thing as a mess and quite frankly i think it's a gamble that he's going to lose i think next week parliament but there will be a move resignations more rebellions and mr johnson is going to end up with egg on his face now hell are we just mentioned the protests petitions after the program parliament there were nearly 1500000 signatures on an official petition to parliament asking them to stop a no deal bragg's it so nearly half of the respondents in the you got polls that they opposed to no deal bragg said and conservative m.p. jacob riis madhu often sounded like a time caller from the victorian era he dismissed a candy floss of outrage so does he not bother you that brags that what was once advertised as a push to restore democracy and sovereignty is now be advanced by preventing the
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elected parliament from legislating by to create a monarchy at the request of an unelected prime minister well actually yes it is a total mess and that's particular because. obviously what they're trying to do as they're trying to thwart the vote of 17400000 u.k. voters the majority of whom voted to leave and so remain as absolutely are doing everything in their power of course they're resigning but you also had a lot of tory ministers resigning when the withdrawal agreement that really wasn't withdraw that agreement they resigned then actually that the british public voted the u.k. public 17400000 it was a more than a victualling notice to the e.u. that's what has not been honored and that is on democratic as for the speaker john boehner how tommy just mentioned well you know it's unconstitutional for him to him to even voice an opinion he was on holiday when he voiced his opinion and that is unconstitutional for him to speak and we smoke i think is right on target. staying
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on the pushback here tommy we also have opposition leader of labor jeremy corbyn insisting that he will try to stop the prime minister with legislation the national coordinator for momentum the group sort of formed to defend corbin against opposition within labor says our message to johnson is this if you steal our democracy will shut down the streets do momentum and perhaps the trade unions have the coordination right now to effectively contest the prime minister in the streets as they say. well let's put it this way depends what your view of democracy is democracy to me living and breathing organism it's not something you bring it once every 2 or 3 years that we hate and a couple of democracy hi steve b. and a very vain involvement of the people and it's quite rate to see that the majority of people in england and the majority of people in wheels voted for bricks at that
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happen that's the reality but what is also the reality is the majority of people in northern ireland and the majority over the wilmington. 2 percent of the people in scotland voted against it so you have a very very diverse. and what we've got to see is that was 3 years ago there have been elections that have been you to people it has been a general election and everyone who voted but it the voter you going to be says that we're going to get a deal i voted but i don't let the european union i think is democratic institution but you know what people attack the european unity see that these commissioners the elected they don't represent any whether they've got no credibility no one no leg boris johnson is a prime minister he got elected by party members to become the play minister of the whole of the u.k. less than one percent of the british population has voted for this man he has new
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democratic credibility the answer today is not the proving of parliament no clues in. parliament in the midst of a parliamentary democracy the answer as a general election let the people do say green democracy that's what we need. and hillary has a lot on the table there do you want to respond to tommy there well i think a couple of things in terms of the programming of parliament this is not an unusual occurrence i mean it occurred for 20 days in 2014 it was 8 days as recently as 2017 and nobody's really noticing that nobody seem to pay attention to any of that it's just really the duration of it of course because the queen has okayed for it to take place as early maybe as september 9th and usually it's not more than 8 days but programming for our international viewers is not the same as dismissing parliament it's not the same as dissolving parliament so i think probing parliament is quite the norm i think in this instance it watching focus people. call has given
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30 days i think the 30 days is a reasonable amount of time to come up with a solution for the irish back saddam and as for boris johnson yes i'm tommy as. right he was elected by the conservative party because theresa may who totally have awfully failed to execute 17400000 people voted for she resigned because she failed on the withdrawal agreement it was not an agreement that anybody same would take because this is a 2 issues about withdrawal agreement you pay $39000000000.00 to be in quotes divorced they are not allowed to trade internationally and you watch it every day or they lose we're going to lose are we going to lose time you know there is or we have to cut off but good to have this expert debate here tommy sheridan hillary borders thank you both so much. time now for a quick break but hang here because when we return greg there is only one brick in the crumbling while the global economy but could it all come crashing down steve king joins us today from amsterdam to break down the latest moves in the bond market and what it could mean in the world market and as we go to break here the
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numbers at the club. what is the lay of the land. demonstrate the opposite. is again in the spotlight just what.
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but. at the bill of the it will. tell you. which we don't know what you. want to. be. it's a mystery the words. the studio. most of. the speed of.
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welcome back argentina's foreign minister announced on wednesday that the government will seek to renegotiate the terms of 100000000000 dollars 101000000000 dollars worth of debt on thursday bonds one in the sell off mode in the argentine peso return resumed its slide in currency markets on the news $44000000000.00 of the $100000000000.00 debt burden consist of the credit provided by the international monetary fund as part of the record setting $57000000000.00 credit on austerity package from the i.m.f. the government of president maurice your machree is now seeking to postpone repayment of that debt to the i.m.f. as well as delaying $7000000000.00 of payments on short term local debt and what they call a voluntary reprofiling of $50000000000.00 in long term debt argentine markets have been in flux and surprise results in a presidential poll gave a big win for mr mack reason what role challenger from the left all beltre fernandez and his running. former president senator and 1st lady cristina fernandez
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de kirchner. there's a new twist in the ongoing saga involving what is anticipated to be the world's largest i.p.o. saudi arabia state run oil enterprise ramphele is now considering a plan to split the i.p.o. into 2 stages 1st a portion of shares will be sold on the saudi's stock exchange this year with a follow up international offering in 2020 or 2021 according to sources familiar with the situation a rand paul is looking at tokyo as the location for the international offering the company had originally been leaning towards london or hong kong but due to political uncertainty in the region had then decided to move towards the japan's market the company is now looking to raise as much as $100000000000.00 combined between the 2 offerings with as much as $50000000000.00 in the saudi listing alone earlier this month a rand paul rekindled the prospect of the i.p.o. after it had been off indefinitely. and now joining us to give his his latest views on the state of the macro economy is steve keen author of can we avoid another
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financial crisis and one of the best professors a canonic on patria and steve welcome. now investors have been rotating out of the equities market in the month of august selling almost $70000000000.00 of stock investments and rotating into the fixed income market year to date the u.s. bond index is up more than 9 percent is the equities dominance over or are we seeing a shift back to credit fixed income and high yield trading and what would that shift mean. well i think what we're actually saying is that the fed of course. on hold they went on. the satellite that's on that order was given to the stock market was removed and that the 1st sign of that was the stock market crash back at the end of last year. just the federal reserve is finally. finally on a status on. the back force. i think. that
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the end. goal of going to. act with the devil once you started doing it you couldn't. pull out of it. back into it again this is all i think. that with the stock market or. that's why the beginning back end of. the. mall i think reversed the whole but the long. process is over ross because there's nothing stopping interest . in the world we're in which is a. financial process world where credit demands. of on process. so now that we have argued that in very young damages the economy and we have accumulated enough damage that the economy will think to have recession so the current that doesn't necessarily predict a recession because
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a set so what is not known right now is how much damage the economy can withstand so right now the federal funds rate is at the highest interest rate in the entire developed world so why have the fed right now not pricing in an aggressive stance when it seems like there are already behind the curve. and all that that's always been behind her because i mean the simple way that our summarize the policy the droste said is the basic mathematics on the line the models the use of the economy which all dynamics generally growly broom sassafras he said it was out there can be some rawson's for a numbers model sell the the base right as inflation should send the right of the economy should be 3 percent on the right interest a child should be 4 soon and those models from clearly in all the role of credit in the economy in private then the economy they believe the credit exchange is standing out through money visual amount not increased the ad spend in our economy
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because they roam in places like the bank of england or the books actually realize that already when they put up interest rates which is what that meant doing for the last 2 years that reduces the bills to massive credit ultimately were juices credit goes to men forces the economy to go back and. so one of the reasons why the interest rate the why the. interest rate isn't good right now is the feds think pushing up the short believing that the economy is facing an inflationary search. that inflationary surge. depends upon factors that are actually real in the economy inflation would come out of the increase in credit demand that's actually been declining so this is going to go back and reverse again the interest rate changes to a city already i don't really think this is actually a normal inverted interest right i think it's been driven. pushing out the short end of the lower end not responding because along in this. is the. model so i can see this going on small event being full of. reality but i don't
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really see a serious recession coming america's. and steve we just heard about argentina seeking to restructure a large portion of its debt the peso is sliding despite the central bank intervening in foreign exchange markets it seems their efforts have not really had an effect so what could happen when if and when latin america's 3rd largest economy goes into a deeper crisis they're already struggling to pay back their i.m.f. loan that was supposed to stabilize their teetering economy are we heading for a repeat play perhaps of 2003 if and when mr fernandez wins the presidential election. and beyond think we are i mean that the whole problem for us really is that it's been running into balance of trade deficit almost indefinitely its in its still doing so you're looking at about $20000000000.00 gap between its exports and its imports therefore has to borrow merican dollars to be able to finance its nates
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its proper use of american dollars and sell sort runs out of cross again and this is an inevitable never developed. structure are in that sole sitting in. ambassadorial stock many years ago when his debt was $45000000000.00 us dollars he said he was sure but the wealthy in options dana doing that was at least you know the city's bank holdings of the dawson seen as a classic house of an economy that has never developed a decent austral bias is horrifying astride said and news. is that he has much money and i have the ses it will continue falling into this trap every time. i wouldn't have been held on thought of that ali thank you so much for joining us steve hanke author of can we have light another financial crisis. the ongoing trade war between us and china is starting to take a toll on china's manufacturing sector google is planning to move production of
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their pixel smartphones and google home devices from china to vietnam as they attempt to reduce costs in the supply chain meanwhile india is making a play to rule manufacturers on their choice to capitalizing on the trade dispute foxconn who produces electronics for a number of companies including apple already has 2 factories in india and plans to open 2 more in the near future prime minister modi has made an effort to bring production to india having launched the made in india program 4 years ago in order to incentivize businesses to move over so while * companies are pulling out of china beijing is warning that this is shortsighted this harkens back to $989.00 when companies pulled out during the tam a massacre those companies left and they had trouble getting back in not just from the government but from the people who believe that trust and loyalty must transcend so while these companies try to mitigate tasks they must think of long term implications if they choose to abandon china now. and your next visit to the
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zoo may be a little less jumbo after ruling the convention on international trade international's endangered species or sites the measure which was approved by the european union mandates that zoos in the u.s. china and others outside of the natural environment of the elements elephants will no longer be able to import animals to other continents the move stopped short however will be some was exceptions that the you you was cross border transit of the elephants the measure cleared the committee overwhelmingly by a vote of $87.00 in favor with only $29.00 nations including the united states voting in opposition. that is that is fascinating i mean elephants you know. back home we always had that elephant who was clearly trapped in there and losing its mind and just did one repetitive motion time after time it's good to be more better climatic conditions we also need bigger pens. i should have i was shocked a great whites have been captivating that there by this time you can catch boom bust on direct t.v. account for a 21 dish network to 80 or 7.47 of her t.v.
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the free t.v. app helped to 79 or as always let us of a you tube dot com most are to see an extra. year to get up off the ground serve began to down. and then place on the sounds of kind of fighting into the grown man like wrestling essentially. to his return. twisted away from the officer. of his crew. the obvious or did they kind of lunge for the web in one's midst and then when it happened on trace one. didn't hit him i never saw any contact between the 2 and the kind we're back to where they were so the answers back here they're try again 15
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feet apart at this point and that's when the officer pulled out his gun and he did it on 3. what politicians do. they put themselves on the line to get accepted or rejected. so when you want to be president. or somehow want to. have to go on to be press was like them before 3 of them or can't be good. i'm interested always in the waters in the. first suit. maximizers financial survival guide stacey let's learn a salad fill out let's say i'm not sure i get any or at least greece banks have to fight wall street fought thank you for something.
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on the story that's right. that's slavery. oh why a paradise with some all year round turned into a round the experimentation field the 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 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
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they can get away with this because the people have less political power. u.s. presidential hopeful fails to make it through to the next round of democratic debates the spot becoming the most searched for candidates on line she's now questioning the d.n.c. selection process. of her appeal after losing his battle to protect people in his village from harmful pesticides we've got reaction from the locals. i think the government isn't doing its job they're the 1st to say that there should be no pass to sites that they did nothing we breathe the in the press sites we did during testing the amount of.

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