To Consider:
Our number one enemy is IGNORANCE. And I believe that is the NUMBER ONE enemy for everyone.. not understanding what is actually going on in the world.
Collapsing Economies
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Sri Lanka has defaulted on its debts for the first time in its history. It has faced an economic and political crisis triggered by global shock waves from the pandemic and the war in Ukraine. Inflation has hit 40% and the shortages of food, fuel, and medicines combined with the rolling power blackouts, have led to nationwide civil unrest. Their currency has been collapsing and in the face of rising US dollars, they are unable to pay their debt.
Sri Lanka will lower the maximum amount of foreign currency that individuals can possess to $10,000 from $15,000 and penalize anyone who holds it for more than three months. The central bank announced the new rules yesterday, as police fired tear gas and water cannons at thousands of students demanding the government step down for failing to solve the country’s economic crisis.
Sri Lanka is actually the oldest democracy in Asia, and now it is the first default by an Asia-Pacific nation this century. I have warned that the rise in the dollar and the rise in US interest rates would set off an economic crisis in the Emerging Markets. This is just the beginning. It is also what I have tried to point out that the CIVIL UNREST forecast is the precursor to international war and they are the greatest risk to institutions and political change.
Sri Lanka said last month that it would stop repaying its international debts to conserve dwindling foreign currency reserves, vital for importing key raw materials from overseas. It is caught between a rock and a hard place as shortages and inflation rise it is having a devasting effect upon third world countries. The first revolution was in Pakistan. We are looking at the widespread political crisis unfolding in emerging markets. The central bank governor, Nandalal Weerasinghe, said: “Our position is very clear: until there is a debt restructure, we cannot repay.”
www.armstrongeconomics.com/world-news/sovereign-debt-crisis/sri-lanka-first-emerging-market-to-default
Which countries could go the Sri Lanka way
Sri Lanka's debt crisis is a warning to the world. The World Bank says a global debt storm is coming. It could engulf 70 developing countries & make their economies fall like dominoes. What are the threats they face? How can they be averted?
Protesters storm President Gotabaya Rajapaksa's residence
Thousands of protesters have stormed President Gotabaya Rajapaksa's residence in the capital of Sri Lanka.
Demonstrators from all over the country marched to Colombo demanding his resignation after months of protests over mismanagement of the country's economic crisis.
Reports say he has already been moved to a safer location.
The country is suffering rampant inflation and is struggling to import food, fuel and medicine.
www.bbc.com/news/world-asia-62104268
President Rajapaksa to resign after palace stormed
Sri Lankan President Gotabaya Rajapaksa has announced he will step down after protesters stormed his official residence and set the prime minister's house on fire.
Neither the PM nor the president were in the buildings at the time.
Hundreds of thousands descended on the capital Colombo, calling for Mr Rajapaksa to resign after months of protests over economic mismanagement.
Mr Rajapaksa will step down on 13 July. PM Wickremesinghe has agreed to resign.
The speaker of parliament said the president decided to step down "to ensure a peaceful handover of power" and called on the public to "respect the law".
The announcement triggered an eruption of celebratory fireworks in the city.
Political leaders are due to hold further meetings to discuss a smooth transition of power. Sri Lanka's military has appealed to people to cooperate with security forces to maintain calm.
www.bbc.com/news/world-asia-62108597
President Gotabaya Rajapaksa flees the country on military jet
Sri Lanka's President Gotabaya Rajapaksa has fled the country amid mass protests over its economic crisis, and landed in the Maldives.
The 73-year-old arrived in the capital city, Male, at around 03:00 local time (22:00 GMT), the BBC understands.
Mr Rajapaksa left aboard a military jet, ending a familial dynasty that has ruled the country for decades.
He had been in hiding after crowds stormed his residence on Saturday.
His brother, former Finance Minister Basil Rajapaksa, has also left the country, sources have told the BBC.
President Gotabaya Rajapaksa's youngest brother was prevented from leaving the country 24 hours earlier but is now said to be heading to the US.
www.bbc.com/news/world-asia-62132271
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Pakistan could run out of foreign exchange reserves in less than 2 months. Islamabad failed to reach a deal with IMF for a bailout. The political instability could further destabilize Pakistan. Will the battle for power spell Pakistan's collapse?
Pakistan descends into civil war
Pakistan has officially descended into civil war. PTI supporters ran riot in Islamabad on Wednesday. They torched vehicles & set trees on fire. Imran Khan has now set a 6-day deadline for Shehbaz Sharif. Where are things headed?
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Every inflation wave is different, and this one won't be fixed by raising rates. This one is based on shortages and not a speculative boom. They don't want to admit that the lockdowns started the collapse in the supply chain. There is no economic understanding with politicians as they all operate with blinders.
We're going to see more unrest in Third World countries due to energy costs. People will vote from their recent experience. When Trump became elected, populism became the enemy. Politicians are threatened by nationalism. The truth is, most of them hate democracy. The heads of the E.U. are appointed and governments in that union are subservient. It doesn't really matter who gets elected. These people would love to impose a similar system here in North America.
The causes of hyperinflation are usually fairly complex. For Germany in 1922 they couldn't repay their reparations, so they confiscated 10 percent of everyone's assets for a bond. However, this action caused citizens to rapidly diversify out of the state currency. Usually, hyperinflations are the result of a loss of confidence. He describes how the capture of a Roman emperor created a loss of confidence in the government and began the debasing of the currency.
He discusses his model and how it's indicating a shift in the types of government from Republics to more direct democracies around 2032. Republics represent their own self-interest, and that eventually is their downfall. He expects another collapse around 2032.
Time Stamp References:
0:00 - Introduction
0:38 - Economic Confidence Model
8:40 - Malice or Stupidity?
10:20 - Power Cycles & Davos
16:05 - Debt & Owning Nothing
17:38 - Russia & Putin's Ratings
20:10 - Society & Religions
22:18 - Historic Hyperinflations
30:42 - The Problem with Debt
35:47 - MMT - The Road Ahead?
37:43 - Ukraine Outcome?
44:40 - Soros & China/Russia
50:00 - The Coming Shift
53:58 - CBDCs and Control
55:38 - Manias and Bubbles?
58:46 - The Gold Cycle & Assets
1:04:14 - Housing Markets
1:05:03 - Censorship
1:07:06 - Wrap Up
Talking Points From This Episode
- Inflationary pressures are being caused by supply chain disruptions.
- Expect further unrest due to energy costs.
- The historic causes of hyperinflations.
- Why governments will move from Republics to more direct democracies.
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Emerging nations, including El Salvador, Ghana, Egypt, Tunisia and Pakistan, will be challenged with a historic cascade of defaults as a quarter-trillion-dollar pile of distressed debts exerts downward pressure on economies, Bloomberg is reporting.
“With the low-income countries, debt risks and debt crises are not hypothetical,” the World Bank’s Chief Economist Carmen Reinhart told the agency on Saturday. “We’re pretty much already there.”
Over the past six months, there’s reportedly been a doubling in the number of emerging markets with sovereign debt that trades at highly distressed levels, meaning yields that indicate investors believe default is a real possibility.
Sri Lanka has barely enough fuel to last one day – mediaREAD MORE: Sri Lanka has barely enough fuel to last one day – media
Another cause for major concern reportedly arises from a potential “domino effect” that commonly occurs when scared investors begin yanking money out of countries with economic problems.
In June, traders reportedly pulled $4 billion out of emerging-market bonds and stocks, marking a fourth straight month of outflows.
Probable defaults may be followed by political instability. Earlier this year, Sri Lanka was the first nation to stop paying its foreign bondholders, burdened by unwieldy food and fuel costs that fueled protests and political chaos.
“Populations suffering from high food prices and shortages of supplies can be a tinderbox for political instability,” Barclays has said, as quoted by Bloomberg.
www.rt.com/business/558718-emerging-economies-cascade-defaults
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In China, a major financial crisis is unfolding. Chinese citizens in 86 cities are boycotting mortgage payments towards their homes. Chinese censors are erasing documents about this boycott.
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rumble.com/v1cvw9r-2023-will-be-year-from-hell-martin-armstrong.html
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