A simple article about the internal balances of payments in the US written by Cullen Roche helps us understand why the Catalan separatists’ famous slogan “Spain is robbing us” is a fallacy. That said, the only thing Catalan secession supporters want is to save on the transfer which they should make as a wealthier region.
Articles by Miguel Navascués
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Could the yuan substitute the dollar and become the predominant currency? I would ask the following question: if you had some dollars, would you change them for yuan? No you wouldn’t, would you? We would like to demonstrate that the yuan is in no way a substitute for the dollar.
With regard to Spain’s debt, there has been a Keynesian policy in place, of ECB monetary expansion and the expansion of government debt, call it what you like. And this policy has allowed Spain to grow at an annual rate of 3% in three years.
There is a huge increase in income and wealth for the richest 1%, and a continued decline in income and assets for the poorest 10%. Politically speaking, this is a bombshell.
Markets’ indicators are showing a lack of any estimation of risk. To begin with, they are at record highs, although some observers say there is still upside potential. Investors’ perception of risk is very slight or zero and, as a result, the risks are very high for them.
The central banks are still powerful. They can make the financial markets rise or plunge them into the doldrums. But the CBs need to scrutinise the financial system and its systemic risks more closely.
The main problem from today onwards is not that Catalonia obtains independence, because there is zero possibility of that happening. It’s rather the weakening of Spain and Europe. Prime Minister Rajoy has the law on his side, but he is politically weak. He needs to look for back up outside, from Europe. But effective support, not notional.
Spanish bond prices are not reflecting the risk of Catalan secession simply because the foreign economic press doesn’t rate the likelihood of it happening, nor the conflict which will follow 1-O.
Angela Merkel’s victory in Sunday’s general election in Germany was insufficient and fairly negative for the rest of Europe. For one thing, the Macron Plan, to create fiscal unity, has automatically been pushed back for at least four years.
Unfortunately, the stakes are being upped in this strange and perverse game between Trump and Pyongyang, with increasing possibilities of China becoming involved. A war with North Korea cannot be ruled out.