09-07-26 savo
manufacturing, labor, and raw commodities
spal.. it has been a process... at some point that was the case... but the rest of the world soup has integrate the whole economic chain.
The US provides still one important raw commodity: Capital.
The rest is mostly foreign. |
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09-07-26 spal
on 3%.. my cleaner is asking for an 8% increase in dollar terms... these people know what inflation is.
==
Yes they do. Key to watch this.
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09-07-26 spal
Savo - in the global economic soup, the US isn’t just a flavor or a tasty morsel it is the colossal pressure cooker and the furnace heating it. The rest of the world supplies the ingredients (manufacturing, labor, and raw commodities), but they only turn into a functional economy because they are processed in the U.S. financial system, priced in dollars, and served to the U.S. consumer.
You will continue to eat American-flavored soup for the foreseeable future ... enjoy. |
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09-07-26 savo
| on 3%.. my cleaner is asking for an 8% increase in dollar terms... these people know what inflation is. |
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09-07-26 savo
spal.. i do not think there is anymore the concept of developed and undeveloped economies.. the world economy is one integrated soup in which some countries do better and others worse.
The US is lagging many of those economies. The opposite of outperforming. It is still one of the two biggest ones... but that only makes the problem worse... more fiscal deficit.. more current account deficit.. more trade deficit... etc...
Inflation is what it is .. not what the government says it is and certainly not what the government targets.
I would recommend to stop targeting inflation and talking about it... they have missed consistently over the last 65 months... lousy job |
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09-07-26 spal
| Even if an administrative initiative completely eliminated every non-defense government agency, closed every federal department, and laid off all civil service workers --- the U.S. government would still run a massive structural deficit. |
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09-07-26 spal
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09-07-26 spal
| FYI ... Eeforts targeting administrative waste, fraud, and improper payments deal with rounding errors relative to the scale of the deficit. |
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09-07-26 spal
in the absence of a real DOGE)
... No DOGE was of course wankery ... deficit is driven by entitlements pure and simple. |
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09-07-26 spal
| Meantime dollar weakens and inflation is tagged at 3% ... a glide path not a crash. The US economy will outperform most of the developed peers in the meantime. Sorry to disappoint and despite Satanists ... |
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09-07-26 spal
The realignment will be catalyzed by the depletion of the Social Security and Medicare trust funds.
No more, no less. |
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09-07-26 spal
| Crunch comes early 30's - then you will see entitlements cut ... buy hook or by crook. |
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09-07-26 spal
| Savo - you are a decade to 15 years early - they will talk 2% inflation, but tolerate c.3% ... this buys time and creates a shit ton of jabber. Don't panic. |
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09-07-26 savo
merlino... hyperscalers (as they call them) were buyers of USTs... not they are sellers of bonds themselves. Double whammy.
The US can not pay its debt and can not even refinance to the point that they have to QE it...
they have two default options... kill the dollar, liquify the debt through inflation while paying ever higher rates and then have a financial crisis...
Or save the dollar ... restructure the debt with a mega haircut, and ..... also have a financial crisis.
I would go for option two... is simpler and it is quicker. After the crisis will come the recovery...Option one is perpetual decline.
PS: I do not think there is a financial brain that can handle the continued refinancing of 40 trn of debt. |
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09-07-26 carib
Merlino: I guess cheapest solution is negative real rates.
(in the absence of a real DOGE) |
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09-07-26 Merlino
There will always be a rate at which USTs are sold... because it is difficult to imagine de US defaulting in nominal terms.
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I humbly think the problem is increased bcz there is way too much corp and (perhaps) personal debt in the system....this load will likely have to be reduced in real terms sooner or later...when?....how will they do it?....deflation, defaults and bankruptcies...or...higher inflation and negative real rates?....I do not know |
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09-07-26 Merlino
I think the AfD won in that Land, and should be allowed to form a local government.There are french towns with a RN mayor, and the sky has not fallen. Very few actual changes, as a matter of fact.
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Gate keeping parties (like Vox, original M5S, etc) formed to canalize voters dissatisfaction, I (cynically) presume |
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09-07-26 carib
I think the AfD won in that Land, and should be allowed to form a local government.There are french towns with a RN mayor, and the sky has not fallen. Very few actual changes, as a matter of fact.
Ciotti is mayor of Nice, but not much changed there after he changed party. |
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09-07-26 savo
spal..USTs are a complex issue... it is not only about volume but about rates too.
If the US would want to sell 10 year bonds at 2%.. they would not find any buyers... so they sell them at 4.5%...and then they find buyers.
The fact that rates go up means less buyers are interested and higher rates have to be offered.
If they US would offer 10 years at 8% there would be more buyers than at 4.5%... and so on.
There will always be a rate at which USTs are sold... because it is difficult to imagine de US defaulting in nominal terms. The default happens via the losing purchasing power of the dollar.
So investors need protection and demand higher rates.
I am not saying anything you do not know... simply refreshing it.
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09-07-26 savo
Billionaire hedge fund manager Chris Rokos is preparing to leave the UK and move his residency to Greece, according to people familiar with the matter, in a move that highlights Greece’s growing appeal to ultra wealthy investors.
Rokos, founder and chief investment officer of Rokos Capital Management, is expected to establish a presence in Athens as part of the move, according to reports by the Financial Times and Bloomberg.
The reported relocation comes as wealthy individuals reassess their tax residency following changes to the UK’s tax system and concerns about potential future tax increases.
https://greekcitytimes.com/2026/09/08/chris-rokos-leaving-uk-for-greece-athens/ |
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09-07-26 spal
Foreign investors still buy plenty of Treasuries, but who is buying has flipped
https://www.briefs.co/news/foreign-investors-still-buy-plenty-of-treasuries-but-who-is/#:~:text=Back%20in%20the%20GFC%20era%2C%20foreign%20central,foreign%20cohort.%20Country%20detail%20tells%20the%20story. |
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09-07-26 spal
| Savo - on the UK - this is sad ... I really enjoy being here nonetheless. |
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09-07-26 spal
| Strange debate then Savo when total foreign holdings of US debt keep hitting record highs. Journos gotta be journos. |
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09-07-26 savo
| the UK is irreversibly lost... gone. |
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09-07-26 spal
Several individual local councils across the UK—including London boroughs like Croydon and Birmingham outside London—have issued Section 114 notices (the local government equivalent of declaring bankruptcy)
So apparently he was half right. |
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09-07-26 spal
| So according to my cab driver (normally an interesting measure) London is going broke under Sadiq Khan. The particular cabbie in fact ran as a Reform Candidate. Personally London property is now irredeemably un-investable - far more economic simply to come over as a visitor. Still a great place to visit, but I'd take this guy at face value for his warning to the middle class. I don't think he sees a clear future for his young children at this point. I'll get to monitor how it goes as long as my recently married son and his lovely bride hang around here. |
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09-07-26 savo
spal... FWIW i think the debate has shifted... now it is about the funding of the debt.
Not many buyers around interested in buying USTs other than Bessent and the Fed.
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09-07-26 spal
The 17 BRICS declarations demonstrate that while member states like complaining about U.S. financial hegemony, they remain structurally locked into the dollar system and lack the internal cohesion, liquid financial markets, or trust required to launch a viable alternative reserve asset.
... plus ça change, plus c’est la même chose.
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09-07-26 spal
BRICS
The claim here is narrower than that, and it is worth stating precisely so you can judge it precisely. As a group, acting as a bloc, they have not built the machinery that would be required to make a material change to the dollar system.
https://research.santiagocapital.com/p/i-read-all-17-brics-declarations |
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09-07-26 victor
savo, looks like the extreme-left BSW party will abstain, so the AfD can form govt.
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09-07-26 savo
victor.. i am not a fan of any political party anywhere in the world.
I am a fun of certain political/economic ideas and against others. |
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09-07-26 victor
savo, are you a fan of the AfD?
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09-07-26 savo
good video...
https://x.com/RippleXrpie/status/2096580990772687048/video/1 |
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09-07-26 savo
🚨HOLY SMOKES! 🇩🇪 GERMANY's “AfD”ALICE WEIDEL ANNOUNCES THE ABOLITION OF THE EU ONCE THEY WIN THE UPCOMING ELECTION:
"We will LEAVE the European Union. We don’t need the EU. We will send back ILLEGAL IMMIGRANTS, and increase BORDER SECURITY." |
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09-07-26 savo
It still baffles me that a party that emphasizes:
- sovereignty
- stricter migration control (and remigration of illegals)
- lower taxes and a leaner government
- ending Germany's current energy/climate policies
- Swiss-style popular referendums on major laws
- limits on party financing and career politicians
- free-list voting so voters choose individual candidates
- a directly elected federal president
- rule of law
- separation of powers
- the state should serve citizens rather than the reverse
- EU of sovereign nation-states rather than a federal superstate
- opposing sending weapons or troops to Ukraine
- negotiated peace that accounts for Russia's security concerns
- a neutral Ukraine outside NATO and EU
- restore economic ties with Russia
is labeled as "far right". Where I'm from, that just called conservative or even common sense.
https://x.com/RuffledCanary/status/2096686764652216707 |
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09-07-26 savo
🇺🇦🇷🇺 According to the Ukrainian media “Glavkom” the new Trump peace plan brought by Kushner & Witkoff is total surrender in front of Russia:
- Complete ceasefire
- Withdrawal of Ukrainian forces from Donbas and Zaporizhzhia Oblast with possible deployment of UN contingent there
- Ukraine's non-aligned status and renouncing NATO accession
- Referendum and elections
- Constitutional amendments
- Kyiv renouncing the forcible return of territories that would come under Russian control
- Limitations on the size of the Ukrainian Armed Forces
- Agreements on language issues
- The signing of a full-fledged peace treaty by the new Ukrainian government, followed by ratification through a special procedure at the UN. |
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09-07-26 spaldo
Former Federal Minister Thomas de Maizière (72, CDU) has described the AfD as a "party of hope" following its victory in the Saxony-Anhalt state election—though not in a positive sense. The experienced politician offers an alarming forecast: "A profound shift! I am mentally preparing myself for the fact that the AfD will govern in one way or another. How that comes about is something that can be discussed over the coming days. I am bracing myself for the worse-case scenario. This also implies a total transformation of our cooperative federalism. Democratic political clashes are going to become more uncomfortable."
The former minister warned: “This result is part of a global struggle over populism—over the future. The AfD has succeeded not only in rallying protest and the disaffected but—and I say this reluctantly—the AfD has become a party of hope!”
This hope, much like that associated with French far-right politician Marine Le Pen (58), is directed at the idea that “we can be a country that remains as undisturbed as possible by the world’s problems.” Yet the second hope held by these politicians and their voters, the minister continued, is this: “If we only want it enough, we can be the way we believe we once were.” This path leads “either to isolation or to the denial of complexity,” for “prosperity is only possible through engagement with the world.”
"Freedom means responsibility in the world," the CDU politician explained. "Change is necessary, complicated, and can also be painful. We have to face these debates—and not just with headlines asking if you’re for the EU or against it, for NATO, for peace, or for democracy. We need to spell out exactly what that means in substantive terms!"
"Whatever happens in the coming days, there will be a government under AfD leadership," de Maizière predicted. "The BSW is for sale and will do whatever it takes to help the AfD gain power. I fear it will be a takeover on velvet paws—an attempt to shed their unsavory image. The AfD talks about unity, while we Christian Democrats are suddenly cast as the ones causing division. Arguing against the AfD will become even harder because they’ll try to shake off that image of the enemy. It’s a clever tactic, and it poses a particular challenge for us and the other parties."
The former minister firmly rejected suggestions—even from within his own party—that they should now cooperate with the election winners: "We’d have to be out of our minds to help the AfD into the saddle!" He dismissed the idea that there might be "any defectors" as "crazy." In closing, he reiterated that the AfD had "evolved into a party of hope"—and a cheerful one at that. "And someone who is cheerful doesn't inspire fear. The rest of us are all so dour. Politics needs to be more optimistic!"
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