The German economy was once a global industrial powerhouse, showing a strong resilience in times of crisis as well as significant productive growth in periods of expansion.Germany displayed robust industrial activity, solid productivity, and enviably low unemployment levels, which added to real high wages. However, in the past five years the economy has stagnated, and its GDP is 5% smaller than the pre-pandemic growth trend suggested, according to Bloomberg Economics. Even more worryingly, they estimate that four percentage points of that loss may be permanent.Most analyses blame the weakness of the German economy on higher energy costs and the Chinese slowdown affecting its exports. However, the reality is more complex.Germany’s stagnation is self-inflicted.Germany made its first big

Last month, the IMF stated that “our forecasts point to an unforgiving combination of low growth and high debt, a difficult future,” emphasizing that “governments must work to reduce debt and rebuild buffers for the next shock, which will surely come, and maybe sooner than we expect.”This advice comes with a warning. At the current rate of spending, the US debt to GDP will reach 198% by 2050 even without expecting a recession. The G-7 public debt to GDP is expected to soar to 188%; the global figure would rise to 122%. Only one country will reduce debt. The IMF expects Germany to reduce its debt from 63.5% to 42%. In the case of Japan, the IMF expects public debt to reach a staggering 329%. The IMF’s Fiscal Monitor informs that public debt levels will reach $100 trillion in 2024, driven by

The United States 10-year government bond yield reached a low of 3.6% in September but has rapidly creeped up to 4.2%, erasing all the rate cut impact. The primary cause is the out-of-control public spending and the lack of confidence among bond investors in the government’s ability to manage its public finances. Therefore, it is logical that investors fear an inflation bounce.The United States’ government is obsessed with doping GDP with government spending and bloating job figures with public sector hires. This is the road to ruin or stagflation.U.S. debt has exploded by more than $850 billion in just three months, but the government has accelerated the insane borrowing, and almost half of that figure was an increase in borrowing in the past three weeks.Of course, the third quarter GDP

The insane neo-Keynesian policies implemented by the Biden-Harris administration have created persistent inflation and record levels of debt with two objectives: to bloat Gross Domestic Product and jobs with public spending and government jobs.The United States’ insane inflation is solely due to out-of-control spending and currency printing. Corporations, wars, or supply chains cannot cause aggregate prices to rise, nor can they consolidate the increase even at a slower pace. Although this can have an impact on individual prices, the only factor that causes aggregate prices to rise year after year is the decline in the value of the US dollar that the government issues.Over 20.5% accumulated inflation over the past four years, government deficit spending has reached nearly $2 trillion

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Many citizens want more government control of the economy to curb rising prices. It is the worst strategy imaginable. Interventionist governments never reduce consumer prices because they benefit from inflation, dissolving their political spending commitments in a constantly depreciated currency. Inflation is the perfect hidden tax. The government makes the currency less valuable by issuing more units of fiat money, partially dissolves its debt in real terms, collects more taxes, and presents itself as the solution to rising prices with subsidies in an increasingly worthless currency. That is why socialism and hyperinflation go hand in hand.Socialism rejects human action and economic calculation and sells a false image of a government that can create wealth at will by issuing more units of

Global liquidity is expanding. In the past three months, the global money supply has soared by $4.7 trillion. This rapid increase started when the Federal Reserve panicked the first time and delayed the normalization of the balance sheet in June.Since then, we have seen a chain of fresh stimulus policies implemented by developed economies, adding to the large fiscal packages already in place. Multi-trillion-dollar investment packages like the EU Next Generation Fund now include massive deficit spending plans. However, money velocity is not rising. All these programs only lead to secular stagnation. Government projects and current expenditures are consuming money at an unprecedented rate.Developed economies cannot live without new and larger spending plans. The result is more debt, weaker

The Federal Reserve decided to cut rates by 50 basis points despite what Chairman Powell considers “no risk of a recession or downturn,” a “solid economy,” and a “strong job market.”After ignoring the impact of monetary aggregates and the warning signs of inflation, the Federal Reserve has breached its price stability mandate for three consecutive years, preferring to prioritize liquidity injections, i.e., printing money, to the recovery of the currency’s purchasing power.The “higher for longer” policy only lasted eighteen months. Furthermore, the latest reading of the Chicago Fed National Financial Conditions Index indicates extremely loose conditions. In fact, the Fed has never cut rates by so much when financial conditions have been this loose.If financial conditions are extremely loose

Global money supply has soared by $20.6 trillion since 2019, according to Bloomberg.Additionally, global debt surged by over $15 trillion in 2023, reaching a new record high of $313 trillion. Around 55% of this rise came from developed economies, mainly the U.S., France, and Germany. Unfunded liabilities in the United States amount to $72 trillion, almost 300% of GDP. This may seem high until you look at Spain with 500% of GDP, France with close to 400%, or Germany with close to 350% of GDP.There is no escape from debt. Paying for the government’s fictitious promises in paper money will result in a constantly depreciating currency, thereby impoverishing those who earn a wage or have savings. Inflation is the hidden tax, and it is very convenient for governments because they always blame

In a recent interview with CNN, Kamala Harris said that Bidenomics is working and that she is “proud of bringing inflation down.”However, the Bureau of Labor Statistics published the latest CPI at 2.9%, despite annual inflation being 1.4% when she took office. Inflation is a disguised tax and accumulated inflation since January 2021, when the Biden-Harris administration started, has increased more than 20%.Of course, Democrats blame inflation on the war, the pandemic, and the science-fantasy concept of “supply chain disruptions.” No one believed it, because most commodities have declined and supply tensions disappeared back to normality, but prices continued to rise.As a result, Harris invented the concept of greedy grocery stores and evil corporations to blame for inflation and justify

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Price controls, higher taxes, government intervention, and subsidies paid for by printing a constantly devalued currency.These are the essential pillars of “21st century socialism” and the radical left Peronism that obliterated Argentina. These are also the main elements of the economic plan presented by Kamala Harris and the Democratic Party. Undoubtedly, this is the most radical socialist economic plan ever announced by the Democrats.According to the Committee for a Responsible Federal Budget (CRFB), Harris’s proposals will cost $1.95 trillion over 10 years. However, it emphasizes that if certain measures become permanent, this figure could increase to $2.25 trillion.The Harris campaign has stated that these costs will be offset by a classic excuse of socialism in any election: “higher

The recent market weakness suggests a combination of profit-taking and concerns about the latest United States jobs and manufacturing figures, added to the abrupt unwinding of part of the yen carry trade. Valuations had soared and market participants now demand central bank easing. However, rate cuts may not be enough to send markets to new all-time highs. Money supply growth and quantitative easing are needed to maintain these valuations.Investors are turning to utilities and real estate stocks, but these sectors need more than low rates; they need a buoyant economy and strong consumer demand, so interest rate decisions may be insufficient.If we look at the long-term trend, the market remains in a cyclical bullish mode, but we need to understand why and be aware of the rise in

I frequently receive comments about the strength of the United States economy and the unfairness of perceiving things as less than stellar. Is it really the “strongest economy ever”? It’s evident that it’s far from being the “strongest economy ever.”

Why is the price of gold rising if the global economy is not in recession and inflation is allegedly under control? This is a question often heard in investment circles, and I will try to answer it.We must begin by clarifying the question. It is true that inflation is slowly decreasing, but we cannot say that it is under control. Let us remember that the latest CPI data in the United States was 3% annualized and that in the eurozone it is 2.6%, with eight countries publishing data above 3%, including Spain.This is why central banks need to give the impression of hawkishness and maintain rates or lower them very cautiously. However, monetary policy is far from being restrictive. Money supply growth is picking up, the ECB maintains its “anti-fragmentation mechanism,” and the Federal Reserve

If you read the latest OECD publication, “Employment Outlook 2024: The Net Zero Transition and the Labour Market,” you would imagine that the world has not gone through the largest monetary and fiscal stimulus in decades.The results are so poor, they are embarrassing. Furthermore, the report illustrates the impoverishment of citizens and subtly suggests that achieving the net zero goal will present an even greater challenge. Translation: You will be even poorer.According to the OECD report, 20% of the global workforce is in jobs that will expand due to the net-zero transition. The report basically tells us that the remaining 80% will face significant challenges.Furthermore, it highlights that “low-income and rural households usually spend more on goods and services with larger carbon

Following the European elections, French credit default swaps have soared to a post-2020 record of 39 points. Many commentators blame the rise of the National Front for market turmoil, which has sent all euro area spreads higher. However, none of this would have happened if France’s debt was low, finances were strong, and the euro area economies enjoyed healthy economic growth.France is the world’s poster child for statism. The same statism that some politicians seek to impose on the United States has economically devastated France, a wonderful country with excellent human capital and outstanding entrepreneurs.France never had austerity. It has the world’s largest government relative to the size of the economy. Government spending to GDP exceeds 58%, the highest in the world. Unions are

Deficit spending is not a growth tool. It is the recipe for stagnation.The latest Congressional Budget Office (CBO) budget and economic outlook estimates show the extent of the challenges of the United States fiscal nightmare.The CBO expects a budget deficit of $1.9 trillion in 2024, a year of alleged robust economic growth and record tax receipts. They expect revenues to reach $4.9 trillion, or 17.2 percent of GDP, in 2024, which will rise to 18.0 percent by 2027 and remain at that level until 2034.This report’s main finding is alarming. Despite expecting no recession and rising tax revenues from 2024 to 2034, the budget deficit will explode from $1.9 trillion to $2.8 trillion by 2034.Estimates place the adjusted deficit at 6.9 percent of GDP by 2034, nearly twice the average of 3.7

The University of Michigan Consumer Sentiment Survey plummeted to its lowest level in seven months. The index reading for June came in at 65.6, down from 69.1 in May and under the consensus expectation of 72. In the current conditions and expectations categories, the survey fell below economists’ expectations.Year-ahead inflation expectations were unchanged this month at 3.3%, but above the 2.3–3.0% range seen in the two years prior to the pandemic, according to the press release. Long-run inflation expectations rose from 3.0% last month to 3.1% in June, significantly above the 2.2-2.6% range seen in the two years pre-pandemic. This survey indicates how weak the U.S. economy is and how consumers are feeling the persistent inflation.Joe Biden posted on X “Zero. That was monthly inflation in

The latest OPEC meeting conclusions show that the global economy is not as strong as headlines suggest and that industries all over the world are struggling to recover. Indeed, many manufacturing PMIs (purchasing managers’ indexes) continue to signal contraction.Oil prices have weakened in recent weeks despite the war in Gaza and rising geopolitical risk.

The long-term forecast for higher interest rates, according to Treasury Secretary Janet Yellen, makes it more difficult to control US borrowing needs, which emphasizes the significance of raising revenue in the forthcoming budget talks with Republican lawmakers. There is only one problem. She is wrong.According to the Congressional Budget Office (CBO) baseline, which does not assume a single year of recession and already counts with record tax revenues, the 2025 primary deficit will reach $851 billion, while net interest outlays will rise to $951 billion. Furthermore, the minimum expected primary deficit from 2025 to 2034 will be a staggering $676 billion with $1.2 trillion of net interest outlays, while the average annual deficit will likely be above $700 billion. The accumulated figures

The money supply is rising again, and persistent price inflation is not a surprise. Price inflation occurs when the amount of currency increases significantly above private sector demand. For investors, the worst decision in this environment of monetary destruction is to invest in sovereign bonds and keep cash. The government’s destruction of the purchasing power of the currency is a policy, not a coincidence.Readers ask me why the government would be interested in eroding the purchasing power of the currency they issue. It is remarkably simple.Monetary inflation is the equivalent of an implicit default. It is a manifestation of the lack of solvency and credibility of the currency issuer.Governments know that they can disguise their fiscal imbalances through the gradual reduction of the

The money supply (M2) has bounced to March 2023 levels and has been rising almost every month since October last year. Furthermore, US government deficit spending has more than offset the decline in the Federal Reserve balance sheet. While the Fed’s balance sheet has shrunk by $1.5 trillion from its peak, the US government deficit remains above $1.5 trillion per year.The money supply (M2) in the United States has bounced above March 2023 levels, while deficit spending offsets any Fed balance sheet reduction.It is no surprise to read that the Federal Reserve has kept rates unchanged. Mr. Powell indicated that there are no rate hikes on the horizon, which was received with relief by market participants, but he also cast doubt about the expectations of rate cuts. However, the single most

The weak GDP figure for the first quarter came with a double negative: poor consumer spending and exports, plus a rise in core inflation. The US administration’s enormous fiscal stimulus underscores the importance of considering the weaker-than-expected data.A deceleration in consumer spending, a decline in the personal savings ratio to 3.6%, and poor exports added to a set of figures for investment that were also negative when we looked at the details.The gross domestic product is much weaker than the headlines suggest. If we look at consumption, both durable and non-durable goods were flat or down, while the only item that increased modestly was the services factor. Residential and intellectual property boosted investment, while equipment remained weak in the past two quarters. The slump

Price inflation is no coincidence. It is a policy. Governments, along with their so-called experts, attempt to persuade you that price inflation stems from anything other than the consistent, albeit slower, rise in aggregate prices year after year. Issuing more currency than the private sector demands, thus eroding its purchasing power and creating a constant annual transfer of wealth from real wages and deposit savings to the government.Oil prices are not a cause of inflation but a consequence. Prices increase as more units of the currency used to denominate the commodity shift to relatively scarce assets. Therefore, oil prices do not cause inflation; they are one of the signals of currency debasement. Furthermore, if oil prices caused inflation, we would go from inflation to deflation

When we talk about monetary policy, people do not understand the importance of interest rates reflecting the reality of inflation and risk. Interest rates are the price of risk and manipulating them down leads to bubbles that end in financial crises, while imposing too high rates can penalize the economy. Ideally, interest rates would flow freely and there would be no central bank to fix them.A price signal as important as interest rates or the amount of money would prevent the creation of bubbles and, above all, the disproportionate accumulation of risk. The risk of fixing rates too high does not exist when central banks impose reference rates, as they will always make it easier for state borrowing—artificial currency creation—in the most convenient—what they call “no distortions”—and

In a recent tweet, a talented financial analyst and investor stated: “The “debt is unsustainable” narrative has been around for 40 years plus. What’s astonishing to me is how the people who push this narrative never ask themselves, “Why has it been sustainable for so long?”.There is a widespread idea that the fiscal imbalances of a world reserve currency issuer would end in an Argentina-style bankruptcy. However, the manifestation of unsustainability did not even appear as drastic in Argentina itself. Hey, Argentina continues to exist, doesn’t it?Excessive public debt is unsustainable when it becomes a burden on productive growth and leads the economy to constantly rising taxes, weaker productivity growth, and weaker real wage growth. However, the level of unsustainable accumulation of

In a recent CNN poll, 48% of respondents stated that they believe the economy remains in a downturn, and only 35% said that things in the country today are going well. The disparity between somber economic sentiment and a surprisingly strong headline unemployment rate and Gross Domestic Product (GDP) can be easily explained.The divergence between headline GDP and Gross Domestic Income (GDI) is staggering. While GDP suggests a strong economy, GDI reveals a stagnant economy. Both measures used to follow a similar pattern, but this changed drastically in 2023. While GDP rose 2.5% in 2023, GDI only bounced 0.5%, effectively signaling economic stagnation.According to the Bureau of Economic Analysis, real GDI increased only 0.5% in 2023, compared with an increase of 2.1% in 2022. If we use the

Thirty major central banks are expected to cut rates in the second half of 2024, a year when more than seventy nations will have elections, which often means massive increases in government spending. Additionally, the latest inflation figures show stubbornly persistent consumer price annualized growth.In the United States, headline PCE inflation in February will likely grow by 0.4%, compared with a 0.3% rise in January, and consensus expects a 2.5% annualized rate, up from 2.4% in January. This is on top of the already 20% accumulated inflation of the past four years. Core inflation will likely show a 0.3% gain, according to Bloomberg Economics, which means an annualized 2.8%, building on top of the price increases of the past years.Thirty central banks easing and seventy national

The manufacturing and consumer confidence weaknesses of the United States are deeply concerning, particularly considering that all those allegedly infallible Keynesian policies are being applied intensely.Considering the insanity of deficit spending driven by entitlement programs, the decline in the headline University of Michigan consumer sentiment index in March to 76.5 from 76.9 is even worse than expected. Let us remember that this index was at 101 in 2019 and has not recovered the brief bounce shown by the re-opening effect in March 2021. Consumer confidence is still incredibly low, and a decline in the expectations index fully explains the most recent decline. Persistent inflation, high gas prices, and declining real wages may explain the poor expectations of the average citizen.

One of the most dangerous things that a government can do is present a glossy picture of the economy at a time when families and small businesses are suffering. Governments are always optimistic, but sending euphoric messages tends to backfire, especially when the situation for the middle class is complicated.In the United States, the Biden administration’s message of “the strongest economy in decades” is not just an exaggeration; it may anger voters who suffer the burden of negative real wage growth, accumulated inflation, and higher taxes.

The relentless increase in global debt is an enormous problem for the economy. Public deficits are neither reserves for the private sector nor a tool for growth. Bloated public debt is a burden on the economy, making productivity stall, raising taxes, and crowding out financing for the private sector.

The main central banks have been deliberating on the concept of introducing a digital currency. However, many citizens fail to grasp the rationale behind it when the majority of transactions in major global currencies are carried out electronically.

Market participants started the year with aggressive expectations of rapid and large rate cuts. However, after the latest inflation, growth, and job figures, the probability of a rate cut in March has fallen from 39 to 24%. Unfortunately for many, headline figures will support a hawkish Federal Reserve, and the latest comments from Jerome Powell suggest rate cuts may not come as fast as bond investors would like.

The euphoria with the fourth quarter Gross Domestic Product (GDP) figure makes no sense. The headline champions say that real GDP increased at an annual rate of 3.3% in the fourth quarter of 2023, according to the Bureau of Economic Statistics (BES). An increase in real GDP of $1.5 trillion with an increase in public debt of more than $2 trillion is not a strong economy. It is a bloated economy. Furthermore, there is nothing positive in consumption when personal saving as a percentage of disposable personal income was only 3.7% in December and disposable personal income in 2017 has basically stagnated. American consumers are buying fewer things with their salary.
We cannot forget that one of the biggest drivers of the fourth quarter increase in real GDP was an abrupt reduction in the GDP

The U.S. federal government published a December deficit of $129 billion, up 52% from the previous year. The private sector recession is clear as expenses continue to rise while tax receipts decline. If we look at the period between October and December 2023, the deficit ballooned to a staggering $510 billion.
You may remember that the Biden administration expected a significant deficit reduction from its tax increases and the expected benefits of its Inflation Reduction Act.
What Americans got was a massive deficit and persistent inflation. According to Moody’s chief economist, Mark Zandi, the entire disinflation process seen in the past years comes from exogenous factors such as “fading fallout from the global pandemic on global supply chains and labor markets, and the Russian War in

Markets closed 2023 with the strongest rally for equities, bonds, gold, and cryptocurrencies in years. The level of complacency was obvious, registering an “extreme greed” level in the Greed and Fear Index.
2023 was also an unbelievably bad year for commodities, particularly oil and natural gas, something that very few would have predicted in the middle of two wars with relevant geopolitical impact and significant OPEC+ supply cuts. It was also a poor year for Chinese equities, despite slower-than-expected but strong economic growth and robust earnings in the large components of the Hang Seng index.
Markets rallied due to a combination of optimistic expectations for inflation and aggressive rate cuts from central banks. The question now is, what can we expect in 2024?
The year of

Although the Federal Reserve and the European Central Bank’s message regarding interest rate cuts seems clear, reiterating their commitment to reducing inflation, the market is expecting between five and six interest rate cuts, between 125 and 150 basis points, in the next twelve months.
This shows us the bubble bias of many investors. We live in a world where two generations of market participants have only seen rate cuts and massive liquidity injections. Central banks have created huge perverse incentives in markets that should have been prevented if they truly followed their mandate of stable prices. On top of it, the ECB faces another risk. It must avoid following the siren calls of interventionists if it wants the euro project to survive.
The euro is the biggest monetary success of

The year is ending with a significant level of optimism among investors, focusing on an expected string of rate cuts from the Fed and an estimated economic soft landing.
However, a soft landing is a very rare event. Since 1975, there have been nine rate hike cycles, and seven of them ended in a recession.
Why? We must understand that the concept of “landing” that the Federal Reserve repeats constantly is exactly that: a recession. A soft landing is a significant decline in the aggregate money supply, which entails lower credit and access to capital for families and businesses. There is no other way to lower price inflation, which the extraordinary and unnecessary increase in the money supply in 2020 caused.
Why did we have no price inflation between 2008 and 2019? Richard

The monumental fiscal and monetary hole that Peronists Massa and Fernández have left for Javier Milei is difficult to replicate. Ex-president Mauricio Macri himself explained that the inheritance Milei receives is “worse” than the one he found from Cristina Fernández de Kirchner. Peronism leaves a country in ruins and with a massive time bomb for the next administration.
The enormous economic problems of Argentina start with a primary fiscal deficit of 3% of GDP and a total deficit (including interest expenses) exceeding 5% of GDP. Moreover, it is a structural deficit that cannot be reduced unless public spending is slashed. Public expenditure already accounts for 40% of GDP and has doubled in the era of Kirchnerism. If we analyze Argentina’s budget, up to 20% is purely political spending.

Market implied Fed Funds rate discount a string of cuts starting in January 2024 and culminating in a 4.492 percent in January 2025. These expectations are based on the perception that the Federal Reserve will achieve a soft landing and that inflation will drop rapidly. However, market participants who assume rate cuts will be bullish may be taking too much risk for the wrong reasons.
The messages from the Federal Reserve contradict the previously mentioned estimates. Powell continues to repeat that there is more likelihood of rate hikes than cuts and that the battle against inflation is not over.
Markets are not following monetary aggregates, and what they show is not good for the economy. According to the Federal Reserve, between September 2022 and September 2023, M1 declined from

The eurozone economy is more than weak. It is in deep contraction, and the data is staggering.
The eurozone manufacturing purchasing managers’ index (PMI), compiled by S&P Global, fell to a three-month low of 43.1 in October, the sixteenth consecutive month of contraction. However, European analysts tend to ignore the manufacturing decline using the excuse that the services sector is larger and stronger than expected, but it is not. The eurozone Composite PMI is also in deep contraction at 46.5, a thirty-five-month low, and the services sector plummeted to recession territory at 47.8, a thirty-two-month low.
Some analysts blame the energy crisis and the European Central Bank (ECB) rate hikes, but this makes no sense. The eurozone should be outperforming the United States and China because

According to the U.S. Treasury, year-end data from September 2023 show that the deficit for the full year 2023 was $1.7 trillion, $320 billion higher than the prior year’s deficit. As a percentage of GDP, the deficit was 6.3%, an increase from 5.4% in FY 2022. This means that the United States will likely post the worst GDP growth excluding debt increases since 1929, or, in other words, that the country is in a recession disguised by bloated deficit spending.
This disastrous result shows that the Keynesian science fiction of the public sector multiplier does not work. The Biden administration increased taxes, but revenues declined. Governmental receipts totaled $4.4 trillion in FY 2023 (16.5 percent of GDP), 9.3% lower than in 2022 and below the budget projections. This decline is mostly

The surprise terrorist attack on Israel by Hamas has created a new geopolitical crisis with many unexpected implications. We cannot forget the hundreds of people that have been killed in this attack—a terrible loss of innocent lives. In markets, the Key Tel Aviv share indices declined around 7% and sovereign bonds slumped by 3% after the bloodiest attack on Israel in many years.
Investors should not worry because this war has very significant ramifications. Iran has supported Hamas in their attack, and this could lead to new tensions with the United States. Furthermore, this war against Israel may create an even larger division between the two largest military and economic powers, the U.S. and China. It is very difficult to think that China will support Hamas and Iran, but it is also hard

There are hundreds of headlines all over the news warning of the negative impact of a government shutdown. The negative impact on GDP, according to Bloomberg, is estimated at 0.5% of the quarterly annualized rate if the shutdown lasts for two weeks. Obviously, that is an annualized rate, not the overall hit. The last government shutdown lasted between December 22nd, 2018, and January 20th, 2019, and the United States economy still grew at a 2.2 percent rate.
The Biden administration has signed a stopgap bill to prevent a government shutdown and fund the expenditures for up to 45 days if there is no agreement. However, the entire debate is created around the monumental crisis that a shutdown would generate instead of focusing on the cause: excessive deficit spending and soaring public

If we search the news from 2007, we can find plenty of headlines with the IMF and the Federal Reserve predicting a soft landing. No one seemed to worry about rising imbalances. The main reason is that market participants and economists like to believe that the central bank will manage the economy as if it were a car. The current optimism about the U.S. economy reminds us of the same sentiment in 2007.
Many readers will argue that this time is different, and we will not see a 2008-style crisis, and they are right. No crisis is the same as the previous one. However, the main pushback I get when discussing the risks of a recession is that the Fed will inject all the liquidity that may be needed. Quantitative easing is seen as the antidote that will prevent a crisis. However, if the only

Oil prices are soaring, and, as always, we read in many articles that OPEC and Russia are to blame. However, if OPEC and its allies were almighty and the drivers of oil prices, why have Brent and West Texas Intermediate (WTI) crude plummeted in 2022? OPEC only reacts to demand, but it is not a price-setter. It is a price-taker.
WTI is up 13% year-to-date, but it only started bouncing in May. WTI is only up 6% in the past year. At $90.7/barrel, it is still far away from the June 2022 high of $122/barrel and barely reaching the levels of November 2022.
What made oil prices plummet from their June ’22 highs? Rate hikes and monetary contraction sent the entire commodity complex down to pre-Ukraine invasion levels despite production cuts, geopolitical risk, and the Chinese re-opening. Commodity

The eurozone economic figures show the risk of stagflation, and the short-term impact is clear in Germany and France, but it extends to the rest of the countries.
Why has the eurozone lagged the United States and other developed economies in recent years? The enormous stimulus packages, including the 2009 Growth and Job Plan, the Juncker Plan, the New Green Deal, and the Europe Next Generation, are proving that central planning only delivers poor growth, elevated debt, and now high inflation.
The ECB’s latest figures show that monetary aggregates are starting to moderate, but inflation remains high and, in the latest print, is rising.
Consensus estimates of GDP growth in 2023 stand at 0.6% with inflation above 5%, according to Bloomberg, and it is important to remember that core inflation

The summit of the so-called BRICS (Brazil, Russia, India, China, and South Africa) has closed with an invitation to join the group extended to the Emirates, Egypt, Iran, Saudi Arabia, Argentina, and Ethiopia.
The summit has generated a lot of headlines about the impact of this widespread group of nations, including speculation about the end of the U.S. dollar as a global reserve currency if this group is perceived as a threat to the United States or even the International Monetary Fund.
Several things need to be clarified.
Many political analysts believe that China lends, invests, or supports in return for nothing. China is a major economic power, but it has no interest in being a global reserve currency. Its currency is currently used in only 5% of global transactions, according to the

Argentina’s problem is not Milei.
The Central Bank of Argentina does not have to devalue the peso due to the victory of Javier Milei in the primaries. The Central Bank of Argentina and the Peronist government have been devaluing the peso and sinking the currency for years. It must devalue because the central bank has run out of reserves.
Argentina is not facing an “anti-system” or “far-right” threat. They already have a far-left and anti-system government. The extractive and confiscatory monetary and fiscal policies of the XXI Century Socialism championed by Peronist Fernandez de Kirchner. The so-called “Inclusive” monetary policy, as Axel Kicilloff, Cristina Fernandez de Kirchner’s ex economy minister, denominated it.
The Peronist policy of maximum interventionism as well as fiscal and

European natural gas prices soared almost 40 percent on the risk of a global liquefied natural gas shortage. European wholesale power prices remain below the record highs of the energy crisis but have steadily climbed as the volatility in the international commodity spectrum underscores the fragility of the European energy system.
Unfortunately, the European Union bureaucrats declared the end of the energy crisis as if it were the result of decisive policy action, but the reality is that the energy problem in the EU was only diminished by purely external factors: a very mild winter and the decline in global commodity prices due to the central bank rate hikes. Thus, the energy crisis remains, and the problems of security of supply and affordability of the system persist.
The European

The middle class in all developed economies is disappearing through a constant process of erosion of its capacity to climb the social ladder. This is happening in the middle of massive so-called stimulus plans, large entitlement programs, endless deficit spending, and “social” programs.
The reality is that those who blame capitalism and free markets for the constant erosion of the middle class should think better of it. Massive money printing and constant financing of larger governments with new currency have nothing to do with capitalism or the free market; it is the imposition of a radical form of statism disguised as an open economy. Citizens who hail the latest government stimulus plan fail to understand that the government cannot give you anything that it has not taken from you

Interventionists always blame inflation on everything and anything except the only thing that makes aggregate prices rise: Issuing more units of currency than the real demand. Seller inflation is the same excuse and fallacy as cost-push inflation. A way to confuse citizens and assign causation to something that cannot make aggregate prices rise.
Let us debunk some myths. No corporation or conglomerate can make aggregate prices rise. Some neo-Keynesians blame corporations for price increases, but that makes no sense. If corporations were able to make aggregate prices rise, the United States would experience incessantly high rates of price inflation. On the other hand, corporations are the ones that lower prices faster because they can generate economies of scale, gain market share, and

The recent University of Michigan survey’s reading of one-year price inflation expectations rose to 3.4 percent in July from 3.3 percent in June. The five-year outlook also increased to 3.1 percent from 3.0 percent in the previous month.
There is a mainstream narrative that is growing all over the financial media: We must accept three percent annual price inflation as a success at combating rising prices. This is enough to pivot and return to monetary easing. It is not.
Three percent annual price inflation for ten years is a loss of purchasing power of the currency of 34 percent after what is already a disastrous inflationary environment.
There is nothing positive about rising long-term price inflation expectations. It is not just the confirmation of a terrible destruction of real wages

Keynesian policies are damaging what they were intended to support. No example is more evident than the United States. A few years ago, in 2021, I had a conversation with Judy Shelton where she said that the recovery would be much stronger without the stimulus package, and she was right. Massive government spending and currency printing have left a much weaker labor market and poorer citizens.
In June, nonfarm payrolls increased by 209,000, the smallest advance since the end of 2020, after two consecutive downward revisions in the prior months, according to the Bureau of Labor Statistics (BLS). If we look at employment statistics beyond the headline unemployment rate, we can see that the labor force participation rate was 62.6 percent for the fourth consecutive month, and the

Estimates of United States growth have improved but remain massively below the Federal Reserve projections.
After the largest monetary and fiscal stimulus in recent years, growth remains well below trend, and debt is significantly higher. It is interesting to hear Janet Yellen say that “trickle-down economics did not work” when this is the failed trickle-down: massive government deficit spending leads to negative real wage growth and weaker GDP.
Current consensus real GDP growth for 4Q23 stands at 0.2 percent, significantly lower than the median projection of one percent in the FOMC’s June Summary of Economic Projections.
The latest figure, for example, shows evidence of headline strength hiding weakness in the details. New durable-goods orders surged in May, but this headline growth

Allow me to explain why we have not seen a recession yet despite the collapse in base money supply. We are witnessing the stealth nationalization of the economy. What does this mean?
The entire burden of the monetary collapse and rate hikes is falling on the shoulders of families and small businesses, while large corporations and governments are virtually unaffected.
Thus, when an agent like the state, which weighs 40 to 60 percent of GDP in most economies, continues to consume wealth and spend, gross domestic product does not show a recession even though consumption and private investment in real terms is declining. Bloated government spending is disguising a private sector recession and the decline in real disposable income, real wages, and margins of SMEs (small and medium enterprises).

Investor sentiment is clearly bullish. The CNN Fear and Greed Index for June 18th, 2023, stood at 82, which signals “extreme greed”. This is a drastic optimistic move after closing at “greed” (56 over 100) a month before and “extreme fear” (17 over 100) only one year ago. However, in the same period, the Citi global economic surprise index has declined twelve points, with the euro area component collapsing 123 points. The US economic surprise index has also declined by thirteen points.
The disastrous performance of the euro area, which fell into recession in the first quarter, is also happening while this economic region enjoys significant tailwinds: Declining energy and commodity prices have supported the euro area’s GDP, boosting the external component thanks to meaningfully lower

Since 1960, Congress has raised the debt ceiling 78 times, according to Bloomberg. The process of increasing the debt limit has become so regular that markets barely worry about it. Furthermore, as the 2011 debt ceiling crisis showed, the impact on asset prices happened mostly in emerging economies. In 2011, Turkish and Indian debt were the most negatively impacted, while Treasuries rose.
Politicians believe that raising the debt ceiling is a social policy and that debt does not matter. Until it does. United States debt to GDP is now 123.4% and the risk of losing confidence on U.S. treasuries as the lowest risk asset is exceedingly high.
The problem in the United States budget is evident in mandatory and discretionary spending. Focusing all the attention on discretionary spending does not

Most politicians have used the “Ukraine invasion card” to justify the massive inflationary burst in 2021-2023.
It does not matter if inflation was already elevated prior to the war. Supply chain disruptions, demand recovery, wage growth… Many excuses were used to justify inflation, except the only one that can make aggregate prices rise in unison, which is the creation of more units of currency well above demand.
Inflationists will blame inflation on anything and everything except the only thing that makes all prices, which are measured in monetary units, rise at the same: Money supply growth rising faster than real economic output.
Supply chain disruption and commodity inflation are caused by monetary expansion: More units of currency going to relatively scarce assets. Profits, wages, or

A "soft landing" is impossible unless the government cuts both taxes and government spending at the same time interest rates are rising. This won’t happen, so get ready for a hard landing. 

Original Article: "Crowding Out: The Fed May Be Killing the Private Sector to Save the Government"

The Federal Reserve’s balance sheet reached its all-time high in May 2022. Since then, it was supposed to drop at a steady pace and shed three trillion US dollars by 2024. The normalization of monetary policy was built on the idea of a soft landing for the economy. However, the Fed may be killing the private sector to save the government.
Curbing inflation requires a significant reduction in the money supply and aggregate demand. However, if government deficit spending is left untouched, the entire burden of normalizing monetary policy will fall on families and businesses.
The current situation is the worst possible. The Fed’s balance sheet is not falling as fast as it should; government spending has not even been scratched, but the money supply is falling at the fastest pace since the

Federal Reserve data shows $98 billion of deposits left the banking system in the week after the Silicon Valley Bank collapse. Most of the money went to money-market funds, as the Bloomberg data shows that assets in this class rose by $121 billion in the same period. The data shows the challenges of the banking system in the middle of a confidence crisis.
However, as many analysts point out, this is not necessarily the main factor that dictates the risk of a credit crunch. Deposit flight is certainly an important risk. Many regional banks will have to cut lending to families and businesses as deposits shrink, but in the United States bank loans are less than 19 percent of corporate credit according to the IMF, while in the euro area it is more than 80 percent. What will generate a credit

Former US President Donald Trump has expressed concern that China could displace the US dollar as the global reserve currency. The warning follows reports of agreements between various nations to use the yuan in commodity transactions.
For years, rumors have circulated about the demise of the US dollar as a global reserve currency, but the greenback continues to be the most traded and extensively used currency in the fiat world.
The US dollar is by far the most traded currency on the foreign exchange market, according to the Bank for International Settlements. In 2022, the US dollar “remained the preeminent vehicle currency in the globe.” In April 2022, it was on one side of 88% of all transactions, unchanged from the previous survey.
The euro, the Japanese yen, and the pound sterling

At the end of February 2023, the price of oil (WTI and Brent), Henry Hub and ICE natural gas, aluminum, copper, steel, corn, wheat, and the Baltic Dry Index are below the February 2022 levels.
The Supply Chain Index and the global supply-demand balance, published by Morgan Stanley, have declined to September 2022 levels. However, the latest inflation readings are hugely concerning.
Considering the previously mentioned prices of commodities and freight, if price inflation were a “cost-push” phenomenon, it would have collapsed to 2 percent levels already. However, both headline and core inflation measures, from the Consumer Price Index (CPI) to Personal Consumer Expenditure Prices (PCE) show extremely elevated levels and rising core inflationary pressures.
We have mentioned numerous times

When we read about the US economy, we often get wage growth as a signal of a strong labor market. It is hardly a strong market when the labor participation rate and the employment to population ratio are both below the February 2020 level and have been stagnant for months.
Additionally, the headline figure of 4.6 percent annualized wage growth is misleading, as it shows a nominal and average figure that disguises a much tougher environment. According to the Bureau of Labor Statistics, from December 2021 to December 2022, real average hourly earnings decreased 1.1 percent, seasonally adjusted.
When we look at wage growth by sector, the picture is even worse. According to JP Morgan, no sector in the US economy has seen a rise in wages that covers inflation. Only two sectors in the US

The incredible growth and success of SVB could not have happened without negative rates, ultra-loose monetary policy, and the tech bubble that burst in 2022.

Original Article: "How Easy Money Killed Silicon Valley Bank"
This Audio Mises Wire is generously sponsored by Christopher Condon.

There are many excuses often used to explain inflation. However, the fact is that there is no such thing as “cost push inflation” or “commodity inflation.” Inflation is not an increase in prices, it is the destruction of the purchasing power of the currency.
Cost-push inflation is more units of currency going to relatively scarce real assets. The same can be said about all other, from commodities to demand and my favorite, “supply chain disruption.” More units of currency going to the same goods and services.
The monster inflation we have endured these years first arrived through asset inflation and then through consumer prices. Now, governments and statistical bodies are tweaking the calculation of CPI to disguise the loss of purchasing power of the currency and central banks had to hike

The second-largest collapse of a bank in recent history after Lehman Brothers could have been prevented. Now the impact is too large, and the contagion risk is difficult to measure.
The demise of the Silicon Valley Bank (SVB) is a classic bank run driven by a liquidity event, but the important lesson for everyone is that the enormity of the unrealized losses and the financial hole in the bank’s accounts would not have existed if not for ultra-loose monetary policy. Let me explain why.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits, according to their public accounts. Their top shareholders are Vanguard Group (11.3 percent), BlackRock (8.1 percent), StateStreet (5.2 percent) and the Swedish pension

Every time the United States reaches its debt limit, we read that it is important to reach an agreement to lift it. The narrative is that the debt ceiling must be raised, or the US economy will suffer a severe contraction. There is even an episode of a TV series, “Designated Survivor”, where the character played by Kiefer Sutherland places lifting the debt ceiling as the priority to get the U.S. economy on track. The debt ceiling is viewed as an evil and anachronistic burden on growth. It is not.
Analysts all over the world consider the debt ceiling a non-event because Congress always agrees to increase it. As such, markets do not even care. Congress has raised the debt ceiling on time on over eighty occasions since 1960, according to S&P Global. The rating agency points out that Congress

The latest jobs report in the United States shows strengths and weaknesses. Total nonfarm payroll employment increased by 223,000 in December, and the unemployment rate fell to 3.5 percent. However, the United States job market continues to show negative real wage growth, the employment-to-population ratio is 60.1 percent, and the force participation rate is 62.3 percent.

The International Monetary Fund (IMF) has warned about the optimistic estimates for 2023, stating that it will likely be a much more difficult year than 2022. Why would that be? Most strategists and commentators are cheering the recent decline in price inflation as a good signal of recovery.

After 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 trillion.

The latest estimates from consensus for the main Latin American economies show 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 at a slower pace than other emerging markets, the outlook is exceedingly worrying.
The poor growth and high inflation expectations are even worse when we consider that consensus estimates still consider a tailwind coming from rising commodity prices and more exports due to the China re-opening.
How can a region with such high potential as Latin America be condemned to stagflation? The answer is simple. The rise of populist governments in Colombia, Chile and Brazil have increased the concerns

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 here, central banks’ balance sheets have hardly, if at all, decreased. Rather than real sales, a weaker currency and the price of the accumulated bonds account for the majority of the fall in the balance sheets of the major central banks.

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 nonexistent and has long-term negative implications for the health of the economy.

More than ninety central banks worldwide are 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 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 of monetary interventions are some of the causes of the widespread impoverishment of the middle class.

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.

Governments and central banks have become the lender of first resort instead of the last resort, and this is immensely dangerous. Global debt soars, inflation creeps in, and many of the so-called supply chain disruptions are the result of zombification after years of subsidizing low productivity and penalizing high productivity with increased taxes.

Quantitative easing was designed as a tool to provide time for governments to implement structural reforms, boost growth, and strengthen the economy. However, it has become a tool to increase the size of government and take increasingly riskier levels of debt.

An energy policy that bans investment in some technologies based on ideological views and ignores security of supply is doomed to a strepitous failure. The energy crisis in the European Union was not created by market failures or lack of alternatives. It was created by political nudging and imposition.

Inflation in Argentina is far worse than neighboring countries. It has only one cause: an extractive and confiscatory monetary policy—printing pesos without control and without demand.

In an interview with the Wall Street Journal, Treasury secretary Janet Yellen admitted that the chain of stimulus plans implemented by the US administration helped create the problem of inflation.

The United States consumption figure seems robust. An 0.9 percent rise in personal spending in April looks good on paper, especially considering the challenges that the economy faces. This apparently strong figure is supporting an average consensus estimate for the second-quarter gross domestic product (GDP) of 3 percent, according to Blue Chip Financial Forecasts.

The most dangerous words in monetary policy and economics are “this time is different.” Argentine politicians’ big mistake is to believe that inflation is multicausal and that everything is solved with increasing doses of interventionism.

After more than a decade of chained stimulus packages and extremely low rates, with trillions of dollars of monetary stimulus fueling elevated asset valuations and incentivizing an enormous leveraged bet on risk, the idea of a controlled explosion or a “soft landing” is impossible.

The most recent macroeconomic figures show that the Chinese slowdown is much more severe than expected and not only attributable to the covid-19 lockdowns. The lockdowns have an enormous impact. Twenty-six of 31 China mainland provinces have rising covid cases and the fear of a Shanghai-style lockdown is enormous.

The invasion of Ukraine, the spike in inflation and the risks of supply shortages have made some politicians dust off some of the worst economic ideas in history: autarky and protectionism. Some believe that if our nation produced everything we needed we would all be better off because we would not depend on others. The idea comes from a deep lack of understanding of economics.

Europe is not going to achieve a competitive energy transition with the current interventionist policies. Europe does not depend on Russian gas due to a coincidence, but because of a chain of mistaken policies: banning nuclear in Germany, prohibiting the development of domestic natural gas resources throughout the European Union, added to a massive and expensive renewable rollout without building a reliable backup.

There are numerous articles mentioning that Saudi Arabia may use the yuan, China’s domestic currency, for its oil exports. How much does Saudi Arabia export to China? According to the Organisation of Economic Co-operation and Development, the kingdom’s main exports are to China ($45.8B), India ($25.1B), Japan ($24.5B), South Korea ($19.5B), and the United States ($12.2B). Exports of crude oil reached $145 billion in total.

This week, the Federal Reserve gave the most dovish “hawkish” statement ever, an apparent aggressive tapering that, in reality, means maintaining very low rates and massive repurchases for longer.Inflation has skyrocketed and aggressive monetary policy is the key factor in understanding it. I already explained it in my article “The Myth of Cost-Push Inflation.” 

What is the worst thing a government can do when there is high inflation and supply shortages? Multiply spending on energy and material-intensive areas. This is exactly what the US infrastructure plan is doing and—even worse—what other developed nations have decided to copy.

No government looking to massively expand its size in the economy and monetize a soaring deficit is going to act against rising prices, despite claiming the opposite. One of the things that surprises citizens in Argentina or Turkey is that their populist governments always talk about the middle classes and helping the poor, yet inflation still soars, making everyone poorer.

Historically, meetings of the largest economies in the world have been essential to reach essential agreements that would incentivize prosperity and growth. This was not the case this time. The G7 meeting agreements were light on detailed economic decisions, except on the most damaging of them all. A minimum global corporate tax

The University of Michigan consumer confidence index fell to 82.8 in May, from 88.3 in April. More importantly, the current conditions index slumped to 90.8, from 97.2 and the expectations index declined to 77.6, from 82.7. Hard data also questions the strength of the recovery.

How can a small rise in bond yields scare policymakers so much? Ned Davis Research estimates that a 2% yield in the US 10-year bond could lead the Nasdaq to fall 20%, and with it the entire stock market globally. A 2% yield can cause such disruption? How did we get to such a situation?

United States jobless claims have picked up, since the elections and the second wave of coronavirus have slowed down the economic recovery. Uncertainty about tax increases and changes in labor laws, including an increase in the minimum wage, add to the fear of new lockdowns, as employers see the devastating effects of these lockdowns in European employment.

The best social policy is one that supports job creation and rising wages. Entitlements do not make a society more prosperous, and ultimately drive it to stagnation.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "If the US Adopts Eurozone Policies, the Jobs Recovery Will Suffer​".

The employment recovery in the United States is as impressive as the collapse due to the lockdowns. In April I wrote a column stating that “The U.S. Labor Market Can Heal Quickly,” and the improvement has been positive. Very few would have expected the unemployment rate to be at 8.4 percent in August after soaring to almost 15 percent in the middle of the pandemic.

The US Dollar Index has lost 10 percent from its March highs and many press comments have started to speculate about the likely collapse of the US dollar as world reserve currency due to this weakness. These wild speculations need to be debunked.

Misguided lockdowns have destroyed the global economy and the impact is likely to last for years. The fallacy of the “lives or the economy” argument is evident now that we see that countries like Taiwan, South Korea, Austria, Sweden, and Holland have been able to preserve the business fabric and the economy while doing a much better job managing the pandemic than countries with severe lockdowns.

The United States added 1.76 million Jobs in July 2020, compared to a consensus estimate of 1.48 million. Unemployment fell to 10.2 percent versus the 10.6 percent expected.

According to the International Monetary Fund (IMF), global fiscal support in response to the crisis will be more than $9 trillion, approximately 12 percent of world GDP. This premature, clearly rushed, probably excessive, and often misguided chain of so-called stimulus plans will distort public finances in a way which we have not seen since World War II.

Despite massive government and central bank stimuli, the global economy is seeing a concerning rise in defaults and delinquencies. The main central banks’ balance sheets (those of the Federal Reserve, Bank of Japan, European Central Bank, Bank of England, and People’s Bank Of China) have soared to a combined $20 trillion, while the fiscal easing announcements in the major economies exceed 7 percent of the world’s GDP according to Fitch Ratings.

The €750 billion stimulus plan announced by the European Commission has been greeted by many macroeconomic analysts and investment banks with euphoria. However, we must be cautious. Why? Many would argue that a swift and decisive response to the crisis with an injection of liquidity that avoids a financial collapse and a strong fiscal impulse that cements the recovery are overwhelmingly positive measures.

Despite the unprecedented increase in the European Central Bank’s asset purchase program, the spread of southern European sovereign bonds versus German ones is rising.

The eurozone economy is expected to collapse in 2020. In countries such as Spain and Italy, the decline, more than 9 percent, will likely be much larger than in emerging market economies. However, the key is to understand how and when the eurozone economies will recover.

All over the world, governments and central banks are addressing the pandemic crisis with three main sets of measures: Massive liquidity injections and rate cuts to support markets and credit.Unprecedented fiscal programs aimed at providing loans and grants for the real economy.Large public spending programs, fundamentally in current spending and relief measures.

The Johns Hopkins University Coronavirus Global Cases Monitor shows that the mortality rate of the epidemic is very low. At the writing of this article,1 there have been 92,818 cases, 3,195 deaths, and 48,201 recoveries. It is normal for the media to focus on the first two figures, but I think that it is important to remember the last one. The recovered figure is more than ten times the deceased one.