Best Stock Markets — Compare the Real Economy — Global Trade Flat for 10 Years — Most Deadly Covid Nations — Then There is Omicron

HAPPY NEW YEAR TO ALL BOOM READERS

BEST PERFORMING GLOBAL STOCK MARKETS

COMPARISON WITH THE REAL ECONOMY

The best performing large global stock markets during 2021 in the advanced economies measured in their local currencies and using the respective MSCI Share Price Indexes were — France (up 21.8 %) , Sweden (up 24.7 %), Canada (20.3 %) and USA (20.8 %). India advanced by 25.3 % — the best performing stock market in a large economy. Notably, China fell by 22.9 %. These numbers are all as at 7th December but final end of year performances would have not been much different. Property prices also boomed in 2021 in many advanced economy nations, especially house prices.

A reasonable hypothesis might be that a massive global crisis (Covid) is good for stock prices and house prices. There is certainly some rebound effect from the terrible year of 2020 but it is a little more complicated than it appears at first inspection. Let’s look at what happened in the real economy.

By comparison, if you look at GDP Growth on a quarterly basis QoQ (as at the end of 3rd quarter) which measures the increase in the transactions for goods and services, you will find numbers that are much more subdued after an initial big rebound from the disastrous year of 2020. India is the standout with 3rd quarter QoQ GDP Growth at 12.7 %. But the top advanced, large economy is France which managed just 3 %. Italy and Spain are next with just 2.6 %. The US comes in at 2.3 % and the Netherlands at 2.1%. All the other large advanced economies registered 3rd quarter growth in GDP below 2 %. Some smaller western economies did OK such as Austria and Norway (3.8 %) but they were the exceptions.

The 4th Quarter results will be very interesting to examine when they are released.

BOOM’s primary thesis about money supply is that the supply of fresh new money is continually heading into asset investments. Why? Because it has to, by design. After all, if 98 % of your money supply is credit money compared to 2 % sovereign cash (non interest bearing) then fresh new money, overwhelmingly created as bank loan credit, MUST be collateralized against assets and MUST therefore be put to use primarily in the asset economy. In other words, all the money supply expansion urged on by central bank policies in response to any economic crisis generates Asset Price inflation first and foremost and not CPI inflation (which will be delayed and, possibly, transitory in nature).

In response to the economic collapse of 2020, central banks and commercial banks loosened the controls on bank loan creation dramatically in order to “save” the real economy where goods and services are traded. That did “save” the real economy but it caused a skyrocket effect on asset prices, leaving most of the population behind because most of the population does not benefit from the ownership of assets.

Our money creation system which we inherited from medieval Venice and let go towards relatively unrestrained credit growth after 1971 is at fault. It is no longer suitable to the advanced economies and will inevitably lead to a further huge disparity in wealth and privilege. If we allow this to continue unrestrained, then social disharmony will grow and that will inevitably lead to political instability. The societal trust in our institutions will then fall eventually. A social mess will slowly erupt and advance towards a collapse just as in ancient Rome.

To avoid this, we must re-engineer our money creation system towards more sovereign money (cash) creation as soon as possible. The major central bankers are now aware of the problem (they all read BOOM). In China, they have conducted 4 experiments of regional electronic cash injections, time limited and merchant limited. They gave the money away via a lottery. The result was an immediate increase in the velocity of money caused by increased cash settled transactions for goods and services.

Other central banks are rapidly moving to correct the problem. They are trying to solve the problem with what are called CBDC’s — Central Bank Digital Currencies. These are essentially interest free electronic cash experiments. BOOM is happy to see that but suggests (strongly) that these initiatives are far too complex. BOOM’s solution of Quantitative Boosting is simpler, immediate and does not involve the creation of any new currency form. It is a form of electronic money free of interest costs, in national currency and injected straight into the real economy.

QB EXPLAINED — https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/

GLOBAL TRADE FLAT

Also notably, world Exports have barely risen over the last 10 years measured in US Dollars. Reflecting this, foreign US Dollar currency reserves have also barely risen over the last 10 years. Imports are similarly moribund over the last 10 years. The entire globe is suffering from the knock on effects of our Venetian money system now. This will result in more and more wealth disparity inside nations and between nations if we do nothing in regard to our money system.

A good source of information about Global Trade is to be found at the World Trade Statistical Review produced by the World Trade Organization WTO.

VENEZUELA GONE CARACAS

The IBC Index (often called the Caracas Index) from the Caracas Stock Exchange (Venezuela), also known as the General Index, is a capitalization-weighted index of the 15 most liquid and highest capitalized stocks traded on the Caracas Stock Exchange (Bolsa de Valores de Caracas).

You may be interested to know that the Venezuelan Stock market index has risen by 350 % during 2021. Over the last 10 days, it has started to rise yet again after a period of consolidation over the last month. Don’t tell the Crypto crowd — they will be very jealous.

BITCOIN HIT HARD YET AGAIN

The US Dollar price of Bitcoin has been hit hard over the Christmas period. It was at US$ 52,000 on the 28th December but then fell sharply two and a half hours (exactly) into the New Year to just $ 46,000. That is an 11.5 % fall in total over just a few days. A major “currency” cannot be so volatile and that is (circuitously) because Bitcoin can never become a currency. Why? Because it was not designed to be one in the first place.

Ethereum has been hit even harder over the same time frame.

MOST DEADLY COVID NATIONS

If you examine the Deaths attributed to Covid 19 (in other words deaths reported with a coincident Positive Covid Test), you will find some very interesting facts.

The nation with the highest Deaths attributed to Covid per Million Population is Peru. They are World Champions of Death with Covid.

After Peru, in sequence, comes Bulgaria, Bosnia/Herzegovina, Hungary, Montenegro, North Macedonia, Georgia, Czechia, Romania, Croatia, Slovakia, Gibraltar, Brazil, Lithuania, Armenia, Slovenia.

That list is striking because most of the nations in the group are clustered in Eastern Europe. This begs the question why?

If you look at the nations with sizable populations at the bottom of the list, you find equally interesting facts.

The sizable nation with the lowest number of Covid Deaths per Million of Population is China. It is Covid World Champion — barely touched by the Virus. China has registered just 3 deaths per Million population. New Zealand is next on the list. But it is typical of many island nations that have had limited numbers of cases and deaths. Their geographic isolation has assisted greatly.

However, if you look at the most populous nations who have also done extremely well in the Deaths per Million comparison above the World Champion, China, you will find the following — ALL African nations — Niger, Chad, Tanzania, Democratic Republic of the Congo, South Sudan, Benin, Nigeria, Burkino Faso, Sierra Leone, Eritrea, Central African Republic, Ivory Coast, Guinea, Togo, Mali, Madagascar, Ghana.

Scattered amongst those, you will see some Non African nations — notably Tajikistan, Hong Kong, Taiwan — but they are few and far between.

In essence, we have Peru with the worst Covid death outcomes and China with the best. And we have Eastern Europe being badly affected. Perhaps they have poor healthcare systems or poor public health controls?

However, Africa was (mostly) spared and the healthcare and public health systems there surely cannot be better than Eastern Europe. Perhaps they have some other hidden secret defense against the Covid virus? It has been suggested that they take a lot of Hydroxychloroquine and/or Ivermectin regularly as a matter of course in daily life which may have protected them.

The other more sinister possibility is that the African nations were least affected because the virus was not deliberately spread there. But that would suggest that a deliberate attempt was made to especially infect Eastern Europe. Why?

THEN THERE IS OMICRON

The next interesting Covid Conundrum concerns the origins of the Omicron variant. The SARS CoV2 Viral Mutation Map reveals that Omicron now has 95 mutations with 37 in the Spike Protein section of the virus. That is a LOT of mutations compared to the Delta variant.

Also, it appears that the Omicron variant can be traced back to its origins well over 12 months ago. It does not seem to be a branch from the Delta variant. Because of this, some people are saying that it looks very much like it has been man-made.

Then it appears (suddenly) in Botswana a few weeks ago and then Bingo — it’s everywhere — on 89 cruise ships and even in the Belgian Antarctic station where “two-thirds of the station’s staff of 25 have been infected with the coronavirus, Belgium’s polar secretariat confirmed to local media” according to some media reports. “But how the virus could have reached the remote station, located some 220km (137 miles) from the Antarctic coast, remains a mystery.”

“All those present have received two doses of vaccine, and one person has even received a booster shot,” said Alain Hubert, the facility’s executive operator and head of security measures. Source: RT News

So — it looks very much like we have a man made new variant that appears suddenly in Africa and then almost immediately ALL OVER THE PLANET. This begs the question — how was it distributed?

The word Omicron is an anagram of Moronic. Maybe the Morons were responsible? If so, then it is feasible that another group of Morons released the first versions of the virus. This theory would be supported by the fact that a whole mob of Morons in all of the world’s governments have over-reacted to it.

In economics, things work until they don’t. Until next week, make your own conclusions, do your own research. BOOM does not offer investment advice.

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