the strong usd

[lakedaemonian]

Re: the strong usd

On my part, the debate revolves around treatment protocol. Here in the UK we keep hearing about a desperate need for ventilators, assumed for desperately ill patients in ICU, for which the numbers are not in dispute. My input relates to the ongoing silence about the potential to use a cheap, safe and easily available protocol, intravenous Vitamin C, Hydrocortisone and Vitamin B1, (Thiamine), which has already been shown to bring down death rates for Sepsis by 80%. Why the silence?

Without being a health care professional, I can only revert to what I know about innovation in general.

If health care professionals want it, they will inevitably get it.

Although there is likely to be supply/demand imbalances due to supply chain funnels.

Perhaps you are confusing silence with a lack of demand/efficacy/probability/utility?

If the majority of health care providers are demanding PPE/ventilators then we should make what they want/need to fill the short term capacity gap.

I’m a big fan of Y-Combinator’s Paul Graham, “Build things people want.”

[lakedaemonian]

Re: the strong usd

Duplicate post

[lakedaemonian]

Re: the strong usd

3.3 Million new applicants for unemployment benefits last week is staggering.
In Canada the figure was, proportionate to population size, three times worse than the USA at 1 Million applicants last week.

Looking at probabilities, instead of absolutes, there's probably three broad economic outcomes:

1. Massive monetary and fiscal stimulus worldwide results in a reasonably quick post-recession rebuild of economic activity once the virus is dealt with (say 12 to 24 months to get global GDP where it was);
2. Monetary and fiscal stimulus results in nothing better than very slow growth globally, over an extended period of time (a decade or more?), somewhat similar to everyone this past decade getting excited about 1% annual growth in Germany, the so-called "powerhouse" economy of Europe;
3. Global depression (which imo can't be entirely ruled out, although I think it still a low probability outcome given the policy responses we have seen so far).

Coming back to the title of this thread, I wonder if this is now the inflection point shaping up for the secular trend change in the US$.

• On the one hand the US Administration is throwing the US$ under the bus in an effort to stimulate a recovery from the current disaster. On the other hand, which nation anywhere else is NOT doing the same. So will it mean relative currency exchange valuations remain more or less the same?
• Then again, if international trade is smashed because of the virus, will the demand for US$ decline materially for some time?
• Or do we see all currencies inflate against some tangible reference such as gold, or oil, or Tesla battery packs?

For some reason I’m reminded of the date(May 23,2003) Paul Bremer, who led the Coalition Provincial Authority, fired the entire Iraqi Army with CPA Order 2.

An argument could be made that Bremer fired 400,000 soldiers who were already unemployed.

But the financial support offered to them proved far too little and far too late and significantly contributed to the lasting instability that followed for years.

Is this $1600-2000 going to be far too little, far too late?

By comparison, the NZ government has provided my company with a low six figure lump sum to support the continued employment of my staff for a minimum of 12 weeks, of which a minimum of 4 will be in lockdown.

My company did not qualify under the original criteria, but under expanded criteria we applied and were approved within 5 days.

The funds arrived within moments of approval with both email and text confirmation.

If I make staff redundant within the 12 weeks, then I would face civil/criminal liability.

I’m left thinking it’s not just about the firehose(capacity) but the nozzle(velocity).

Is the slow and limited support for folks at the bottom in the US a potential Paul Bremer moment?

I don’t want to give an impression that unemployed Americans will turn into a multi faceted Iraqi insurgency.

But I do think it could lead to the biggest political awakening and activation(direct action) the US has seen since the 30’s/60’s.

If I had to guess, we will need to pass enough “electricity” thru the damaged body of the US economy to make a corpse dance like Michael Jackson in Thriller.

[Chris Coles]

Re: the strong usd

Without being a health care professional, I can only revert to what I know about innovation in general.

If health care professionals want it, they will inevitably get it.

Although there is likely to be supply/demand imbalances due to supply chain funnels.

Perhaps you are confusing silence with a lack of demand/efficacy/probability/utility?

If the majority of health care providers are demanding PPE/ventilators then we should make what they want/need to fill the short term capacity gap.

I’m a big fan of Y-Combinator’s Paul Graham, “Build things people want.”

OK, what is it that "People" want? May I be so bold as to suggest that what people want is to survive this pandemic. Now, please, do me a favour, sit and watch this video: https://youtu.be/yfXVce34A78 which was taken from this web page put up by Dr. Joseph Mercola https://articles.mercola.com/sites/a...mortality.aspx

What you will learn is that the risk to be faced is an 80% reduction in death rates, in large part dramatically reducing the need for PPE/ventilators; using a new treatment protocol that has no side effects, and is cheap and very easy to administer; resulting in the patient, close to death, expected overnight, being well on the way to full recovery by that same morning. Now, tell me which you WILL prefer as you drop into that final coma, a ventilator, or the new protocol that carries the very high risk of your survival? Again, please, watch that interview on YouTube.

[shiny!]

Re: the strong usd

For some reason I’m reminded of the date(May 23,2003) Paul Bremer, who led the Coalition Provincial Authority, fired the entire Iraqi Army with CPA Order 2.

An argument could be made that Bremer fired 400,000 soldiers who were already unemployed.

But the financial support offered to them proved far too little and far too late and significantly contributed to the lasting instability that followed for years.

Is this $1600-2000 going to be far too little, far too late?

By comparison, the NZ government has provided my company with a low six figure lump sum to support the continued employment of my staff for a minimum of 12 weeks, of which a minimum of 4 will be in lockdown.

My company did not qualify under the original criteria, but under expanded criteria we applied and were approved within 5 days.

The funds arrived within moments of approval with both email and text confirmation.

If I make staff redundant within the 12 weeks, then I would face civil/criminal liability.

I’m left thinking it’s not just about the firehose(capacity) but the nozzle(velocity).

Is the slow and limited support for folks at the bottom in the US a potential Paul Bremer moment?

I don’t want to give an impression that unemployed Americans will turn into a multi faceted Iraqi insurgency.

But I do think it could lead to the biggest political awakening and activation(direct action) the US has seen since the 30’s/60’s.

If I had to guess, we will need to pass enough “electricity” thru the damaged body of the US economy to make a corpse dance like Michael Jackson in Thriller.

Putin seems to get it:

Putin Says 'The Rich Must Pay' for the Corona-Virus
Mike Whitney • March 28, 2020

Vladimir Putin has decided how Russia is going to pay for the corona-virus.

He’s going to tax the rich.

It’s a remedy that most Americans would support if they were given the choice, but they weren’t asked. Instead, Congress passed a $2 trillion stimulus package for which the American taxpayer will be held entirely responsible. Even worse, the new legislation contains a $500 billion allocation (another corporate giveaway) that the Federal Reserve will use as a capital base for borrowing $4.5 trillion. That massive sum of money will be used to buy toxic bonds in the corporate bond market. Just as Mortgage-Backed Securities (MBS) were used to fleece millions of investors out of their hard-earned savings in the run-up to the 2008 Financial Crisis, so too, “toxic” corporate bonds were the weapon of choice that was used to pilfer trillions of dollars from investors in the run-up to today’s crisis. (Same scam, different instrument) The virus was merely the proximate cause that tipped the sector into meltdown. The problem had been festering for years and everyone in the financial community (Including the Fed, the BIS and the IMF) knew that it was only a matter of time before the market would blow sky-high. Which it did.

What every American needs to know is that our crooked bought-and-paid-for Congress just passed a bill that transfers the credit risk for $4.5 trillion of corporate sludge onto the National Debt. A bailout of this magnitude could impact the nation’s credit rating (Fitch has already issued a warning), send interest rates to the moon, dampen economic activity for years to come, and pave the way for a long and painful slump. The much ballyhooed $1,200 checks for unemployed workers are merely a tactical diversion that’s being used to conceal the giant ripoff that is taking place right under our noses.

In contrast, Putin has settled on a more rational and compassionate plan. He’s going to launch a relief program that actually focuses on the people who need it the most. Then, he’s going to cover the costs by taxing the people who are most capable of shouldering the burden. His intention is not to “soak the rich” or to redistribute wealth. He simply wants to find the most equitable way to share the costs for this completely unexpected crisis. In short, Putin was presented with two very bad options:

1– Let the Russian people huddle in their homes (“shelter in place”) until the food runs out and the bills pile up to the ceiling.

2–Or tap into a temporary source of revenue that will help the country get through the hard times.

He wisely chose the latter option not because he’s a fiery leftist who hates the “free market”, but because he realizes that in a time of national crisis, the people who are more able to pay, should pay. It’s a question of fairness.

And who are the people who will benefit from Putin’s plan? Well, he named them in a speech he delivered to the nation just last week. Here’s a clip:

“We also need to take additional steps, primarily to ensure the social protection of our people, their incomes and jobs, as well as support for small and medium-sized businesses, which employ millions of people….

First, all social protection benefits that our citizens are entitled to, should be renewed automatically over the next six months… if a family is entitled to subsidized housing and utility payments, they will not need to regularly confirm their per capita income to continue receiving this state support…all payments to war veterans and home-front workers timed to the 75th anniversary of the Great Victory, 75,000 and 50,000 rubles, respectively, should be made before the May holidays…

Second, it is essential to support families with children……..Third, we need to support those on sick leave and people who have lost their jobs.” (Putin’s Address to the Nation)

See? No big payouts to failing corporations, no welfare checks for Wall Street, and no tax breaks for fatcat bankers and their crooked friends. Just money for the people who desperately need it: Families with children, veterans, home-front workers, the sick, the unemployed, and the homeless. Simple and fair.

The strategy is aimed at everyone who is impacted by the virus, not just the people who filed taxes last year like the Trump Plan, but anyone who needs public assistance. At the same time, financial support will be provided for small and medium-sized businesses, incomes will be protected, jobs will be guaranteed. and mortgage payments will be suspended. It’s not a perfect plan, but it’s fairly comprehensive and targets the people that are most vulnerable. It also underscores the primary responsibility of government during times of crisis, that is, to ensure the health, safety and security of its people. That is Job 1.

The Putin plan also provides support for medical personnel, doctors, nurses, emergency staff, hospital employees, health care workers and first-responders. Here’s Putin:

“We have mobilized all the capabilities and resources for deploying a system of timely prevention and treatment. I would like to specially address doctors, paramedics, nurses, staff at hospitals, outpatient clinics, rural paramedic centers, ambulance services, and researchers: you are at the forefront of dealing with this situation. My heartfelt gratitude to you for your dedicated efforts.”

Will Putin and his advisors make mistakes in containing the virus and ending the contagion as swiftly as possible?

Probably, but it certainly looks like they’ve got their priorities right. Putin seems to understand that the health and welfare of the Russian people has to be put before the stock market, finance capital or the voracious corporate kingpins. In contrast, Trump wants to put more people at risk of infection by sending them back to work after Easter. That’s just not the way responsible leaders behave, not if they really care about the health of their people. Here’s more from Putin:

“There are two more measures I would like to suggest. First, all interest and dividend income that flows from Russia and is transferred abroad into offshore jurisdictions must be taxed properly….I suggest that those expatriating their income as dividends to foreign accounts should pay a 15 percent tax on these dividends….

Second, many countries levy income tax on interest earned by individuals from their bank deposits and investments in securities, while Russia does not tax this income at all. I propose that people with over 1 million rubles in bank deposits and debt securities pay a 13 percent tax on this income…. I propose using the budget revenue from these two measures to fund initiatives to support families with children and help people who are unemployed or on sick leave.”

What does it mean?

It means that Putin is closing tax havens and tax loopholes so he can get the money he needs to pay for the epidemic. It means he’s taking on the wealthiest and most powerful people in Russia so he can provide relief for the people who are stuck in their homes trying to survive. It means he’s risking his own political future in order to do the right thing. Here’s Putin:

“People of Russia, we need the state, society and the people to work together.. We have to be mindful that we bear personal responsibility for our close ones, for those who live near us, and who need our help and support….It is our sense of solidarity that underpins the resilience of our society, as well as an unwavering commitment to mutual assistance and the effectiveness of the response we come up with to overcome the challenge we are facing.”

Shared sacrifice, solidarity and brotherly love. That’s what he’s talking about, isn’t it? The threads that bind a disparate group of people into a sovereign nation.

In America, we make the working poor pay for the excesses of the crooked rich, while in Russia, the wealthy are asked to make sacrifices for the sake of the country. Which approach do you think is better?

[geodrome]

Re: the strong usd

Putin seems to get it:

This hit a little too close to home. I was born in Russia, moved to NYC at 13, and I'm currently living in Russia (temporarily). I found this whole Putin serenade sickening. "The rich" of Russia who are paying for the coronacrisis are people like my parents who managed, after 40 years of working, to save SOMETHING for their retirement. This is not an easy feat in Russia. Most people are reliant 100% of whatever pennies the gov't throws their way.

Putin: "I propose that people with over 1 million rubles in bank deposits and debt securities pay a 13 percent tax on this income."

1MM Rubles = $12,520

In Russia the people who just managed to earn a decent living are having it taking away from them to help the destitute. In the meantime the actually rich are self-isolating in splendor, setting up makeshift clinics, and Hoarding Ventilators to Protect Themselves Against the Coronavirus. Exerpt:

The family is one of Russia’s richest. Worth over $1 billion, it owns homes in some of the world’s most sought after destinations, including London and the south of France.

It also has a mansion in Rublyovka, the luxury suburb outside Moscow that is home to much of Russia’s ruling elite. It is here that the family is planning on riding out the coronavirus pandemic that has swept across the globe in recent weeks, killing 12,000 and counting.

While Russia’s rich can self-isolate in splendor, there will be some hardships they might be forced to bear if the coronavirus spreads throughout the country: State-run hospitals are the only institutions taking in patients of the virus.

But The Moscow Times has found evidence, based on dozens of interviews, that Russia’s rich are setting up makeshift clinics in their own homes to ensure they can have better care than the masses if they get infected. And in what may have severe ramifications down the road for Russia’s battle against the coronavirus, they are buying up and hoarding the ventilators that have proven essential in saving lives in severe cases.


“We’ve been able to get one so far and are trying to get two more,” one family member told The Moscow Times, asking to remain anonymous to speak candidly on the subject, and noting that the device cost 1.8 million rubles ($22,500). “But there’s an eight-month waiting list.”

[thriftyandboringinohio]

Re: the strong usd

Thanks for the local perspective, geodrome.

As far as I can tell, Putin and this closest oligarchs want one specific thing most of all.
The west imposed sanctions in 2014 as a result of Russia taking Crimea.
Putin and his gang want those sanctions removed.

Do I have that right?

[geodrome]

Re: the strong usd

Thanks for the local perspective, geodrome.

As far as I can tell, Putin and this closest oligarchs want one specific thing most of all.
The west imposed sanctions in 2014 as a result of Russia taking Crimea.
Putin and his gang want those sanctions removed.

Do I have that right?

I can't say that I know their priorities very well, but I would say their number one obsession is to maintain power. The sanctions are certainly a thorn in the side.

The taking Crimea itself was, in addition to its strategic significance, a measure to raise Putin's popularity. It succeeded briefly in that regard. But soon after the refrigerator (actual living conditions in Russian political parlance) began to edge out the TV (state propaganda).

[Woodsman]

Re: the strong usd

...In Russia the people who just managed to earn a decent living are having it taking away from them to help the destitute. In the meantime the actually rich are self-isolating in splendor, setting up makeshift clinics, and Hoarding Ventilators to Protect Themselves Against the Coronavirus. Exerpt:

It's heartwarming to know just how much Russia and America have in common these days. Capitalism, Christianity, and a rapacious ruling class hell-bent on saving itself at all costs.

Rich Americans are trying to buy their own personal ventilators during the coronavirus pandemic, despite a national shortage
Mia Jankowicz

Mar 20, 2020, 11:36 AM

A manufacturer of ventilators which can treat patients with COVID-19 said he wealth buyers have asked to buy their own machines from him, according to the New York Times...

https://www.businessinsider.com/coronavirus-rich-in-us-trying-to-buy-their-own-ventilators-2020-3?op=1

[jk]

Re: the strong usd

don't worry, shiny, taxpayers will never pay that $2trillion. it will be conjured into existence, and dilute the value of all dollars.

[GRG55]

Re: the strong usd

Putin seems to get it:

What a complete and utter joke.

I find any journalist that would publish this sort of pap as unimaginably stupid, and unbelievably lazy.

The way a President-for-Life (and there should be no denying that is exactly what Putin is) stays in power is by stripping the national income and distributing it to an inner circle of influential supporters and senior military officers, all of which then have a very substantial economic and personal incentive to maintain the status-quo and support the top dog. Putin and his tight circle of oligarchs set themselves up during the waning days of the shambolic Yeltsin Presidency.

Getting cross-threaded with the Big Man will get you puloniumed (Litvinenko) or the lesser sentence of being Kordakofsky'd.

This nonsense about Putin is almost as ridiculous as "flat earther, Thomas Friedman's nausea-inducing fawning over the "Great Saudi Reformer" MbS.

No no wonder our media have fallen into such disrepute.

[shiny!]

Re: the strong usd

Thank you and Geodrome for setting me straight.

[lakedaemonian]

Re: the strong usd

I can't say that I know their priorities very well, but I would say their number one obsession is to maintain power. The sanctions are certainly a thorn in the side.

The taking Crimea itself was, in addition to its strategic significance, a measure to raise Putin's popularity. It succeeded briefly in that regard. But soon after the refrigerator (actual living conditions in Russian political parlance) began to edge out the TV (state propaganda).

Cheers for the local Russia perspective.

I didn’t expect the oligarchs and rings of very professional gangsters that enable, depend on, and support Putin to pay.

it will be interesting to see how Russia’s government(Putin) handles the steep decline in government income from collapsing energy prices.

Any thoughts on that part?

[lakedaemonian]

Re: the strong usd

OK, what is it that "People" want? May I be so bold as to suggest that what people want is to survive this pandemic. Now, please, do me a favour, sit and watch this video: https://youtu.be/yfXVce34A78 which was taken from this web page put up by Dr. Joseph Mercola https://articles.mercola.com/sites/a...mortality.aspx

What you will learn is that the risk to be faced is an 80% reduction in death rates, in large part dramatically reducing the need for PPE/ventilators; using a new treatment protocol that has no side effects, and is cheap and very easy to administer; resulting in the patient, close to death, expected overnight, being well on the way to full recovery by that same morning. Now, tell me which you WILL prefer as you drop into that final coma, a ventilator, or the new protocol that carries the very high risk of your survival? Again, please, watch that interview on YouTube.

People want to live of course.

And healthcare professionals want their patients to live too.

If the protocol has such miraculous results then it will be peer reviewed, independently repeated, and quickly/cheaply scaled.

And if it has any applicability to COVID-19 treatment then the same will likely be trialled immediately due to greatly enhanced scope for rapid small scale trails.

I’m struggling to believe that an affordable/simple/scalable solution for either problem could remain undiscovered or suppressed in an age of ubiquitous information.

[geodrome]

Re: the strong usd

Cheers for the local Russia perspective.

I didn’t expect the oligarchs and rings of very professional gangsters that enable, depend on, and support Putin to pay.

it will be interesting to see how Russia’s government(Putin) handles the steep decline in government income from collapsing energy prices.

Any thoughts on that part?

Well there is the Russian National Wealth Fund that was instituted specifically for this purpose. It's a kind stash for a rainy day. They save up when oil prices are higher for the times when oil prices go lower. The goal is to avoid a repeat of the Russian financial crisis of 1998 when the gov't ended up devaluing the ruble and defaulting on its debt.

Russia's GDP = ~113 trillion rubles
Russian federal budget: ~20 trillion rubles
Total assets of the Russian National Wealth Fund (March 2020): 8.25 trillion rubles = $123.4 bn = 7.3% Russian GDP.

How much will the GDP shrink? How long will oil prices stay low? Your guess is as good as mine.

Assuming a balanced budget (reasonable assumption: https://tradingeconomics.com/russia/government-budget), if GDP shrinks say 20% and oil prices stay low for say a year, then by my paper napkin calculations there goes the national wealth fund, which I doubt they'd allow to go to zero. Remains to be seen how the coronavirus thing goes here, but I don't see how it could go any different than everywhere else.

Then what? Borrow from abroad? Who would lend? At what interest rate? Also, I think they still remember 1998, and are reluctant to borrow and be beholden to their lenders. So that leaves door #2a and #2b: increase taxes and print more rubles.

When they do the math will they allow the bodies to pile up to save the economy and try to manage that? I think not, but I certainly have no difficulty imagining that scenario. In any case pain ahead. A potential increase in political instability and an increase of repressive measures by the regime.

Just some rough thoughts.