It's a bit of an artificial inflation figure, although electricty costs are going to cause many businesses to fail and for example my friend is going to close his pub/restaurant specifically because of the cost of power, it is all ultimately down to one commodity namely energy, something I've been banging on about for years, this is just a foretaste of what will happen when the oil starts to run out and we still haven't replaced it with renewables. My employer generally gives us an increase matching inflation plus a little bit extra this has been the case for all but two of the last 14 years, percentage increases favour the higher paid as my net income will increse signifcantly beyond my costs if we hit 20 odd percent inflation, basically I will be quids in but I do feel for the plight of those on much lower pay, huge numbers of middle class citizens will be facing poverty this winter. The downside for me personally is that this kind of inflation will hurt savers and pension savers but again not so much if you have fairly substantial savings already athough in general high inflation depresses market valuations. Though right now I am on a two year energy price fix with 18 months left to run, and I might be at the point of leaving the UK for the Phils in 18 months anyway although energy costs might have stabilised by then or be coming back down due to the UK and the EU sourcing alternative production and supplies. So overall a 20% inflation salary increase next April would be very beneficial for me and HMRC will get a lot of extra tax off me as well
Bank failures in the USA impending or will the FED bail them out to avoid panic and a bank run? https://www.usatoday.com/story/money/economy/2023/03/10/fdic-silicon-valley-bank-fail/11445464002/ When the U.S sneezes the world catches a cold so pay attention people because it looks more like the U.S may have a severe case of influenza.
SVB wasn't a bad bank, it's a victim of an impending bond crisis because of inflationary effects on government bond values. That same bond crisis will be become a nightmare for governments as well.
US, UK try to stem fallout from Silicon Valley Bank collapse Harvey said while multiple banks were extremely over-leveraged in the run-up to the 2007-08 crisis, SVB had failed due to its overreliance on the tech sector, which has lost trillions of dollars in value over the last year. “SVP is a story about an undiversified loan book,” he said. https://www.aljazeera.com/economy/2...said while multiple banks,loan book,” he said.
Ac Actually I'll grant you that, I read a bit more later this evening and SVB was not that well run and it was undiversified as you quote.
Signature Bank becomes next casualty of banking turmoil after SVB https://www.reuters.com/business/financ this news constitutes the 3rd largest bank failure in U.S history. Seems that a lack of investor confidence has led to a bank run on Signature Bank constituting the 3rd largest bank failure in U.S history.
Last week, China and Brazil reached an agreement to settle trades in one anothers’ currencies. Over the past 15 years, China has replaced the United States as the main trading partner of resource-rich Brazil, and as such that shift may have been inevitable. But within the context of recent circumstances, this appears to be another in a series of recent blows to the central role of the dollar in global trade. As the world’s reserve currency, the US dollar is essentially the default currency in international trade and a global unit of account. Because of that, every central bank, Treasury/exchequer, and major firm on Earth keeps a large portion of their foreign exchange holdings in US dollars. And because holders of dollars seek returns on those balances, the ubiquity of dollars drives a substantial portion of the demand for US government bonds in world financial markets. The switch from dollars to a yuan-real settlement basis in Chinese-Brazilian trade is only the latest in a growing trend. Discussions of a more politically neutral reserve currency have gone on for decades. The profound economic disruption experienced by Iran, and more recently Russia, after being evicted from dollar-based trading systems like SWIFT, however, have led many nations to consider imminent contingency plans. India and Malaysia, for example, have recently begun using the Indian Rupee to settle certain trades, and there have been perennial warnings about Saudi Arabia and other energy exporters moving away from the dollar. On that note, China also recently executed a test trade for natural gas with France settled in yuan. https://www.aier.org/article/de-dollarization-has-begun/
