by Mish Shedlock, The Street:
I remain amused by all the calls of hyperinflation and high inflation given the Fed has turned on the printing presses.
However, currencies cannot be viewed in isolation.
To those expecting a total US dollar collapse, here’s my word of advice. Stop being so US-centric.
Japan Authorizes Another Trillion in Stimulus
Please note Japan authorizes another $929 Billion to Battle Pandemic.
Japan is considering a fresh stimulus package worth over $929 billion that will consist mostly of financial aid programmes for companies hit by the coronavirus pandemic, the Nikkei newspaper said on Monday. |
The package, to be funded by a second extra budget for the current fiscal year beginning in April, would follow a record $1.1 trillion spending plan deployed last month to cushion the economic blow from the pandemic.
That is a total of 2 trillion dollars for Japan. Adjusted for the relative size of the economies, that is an amazing amount.
China Unveils US$500 Billion Fiscal Stimulus
Also note that China unveils US$500 billion fiscal stimulus, but refrains from going all-in.
Key Points
Supposedly that is not “All In.” And given what is going on elsewhere it isn’t.
But the Yuan is not a component of the US dollar index. And it is important that China is crossing red lines.
Unprecedented EU Stimulus
On April 23, the EU leaders announced ‘Unprecedented’ Stimulus Against Pandemic.
Hold On, a Major EU Court Battle Brews
On May 10, I noted a Major Court Fight Between Germany and EU Looms
Briefly, the German constitutional court ruled that the ECB abused its powers ruling on the ECB asset purchases as implausible, and objectively arbitrary.
Debt Mutualization
What Germany fears now and has from the outset is “debt mutualization” in which Germany would bailout Greece, Spain, Portugal, and Italy.
And despite the German court ruling, Pablo Iglesias, Spain’s Deputy PM. says a “certain [level of] debt mutualisation is a [necessary] condition of the [continued] existence of the EU”.
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