RT Bloomberg en Español (@BBGenEspanol)El desempleo en Chile se estanca y podría empeorar con los planes de austeridad de Kast y Matthei, que prometen recortar miles de empleos públicos para reducir el gasto.@CarolinaBGP explica https://t.co/HHdzwWOTFF https://t.co/EDy7G426Ov ...

Breaking: Czech billionaire Andrej Babis was on track to return to power after securing a decisive victory in a parliamentary election, pledging to undo four years of austerity and curb military aid to Ukraine https://t.co/0AwY5rIHk1 ...

Political Landscape - Czech billionaire Andrej Babis took the lead in the country's parliamentary election [1] - Babis campaigned to undo four years of austerity [1] - Babis campaigned to curb military aid to Ukraine [1]

Deleveraging Dynamics - During deleveraging, spending decreases, incomes decline, credit vanishes, asset prices fall, banks face pressure, and stock markets crash, creating a self-reinforcing negative cycle [1] - Borrowers struggle as incomes decrease and debt repayments increase, leading to asset sales and market flooding, causing stock market and real estate market crashes, and bank troubles [2] - Lowering interest rates is ineffective in deleveraging because rates are already near 0%, unlike in a recession where it stimulates borrowing [3][4] Debt Burden and Reduction - The core issue in deleveraging is excessively high debt burdens that cannot be alleviated by lowering interest rates [5] - Four methods to address deleveraging include: cutting spending (austerity), debt reduction through defaults and restructurings, wealth redistribution, and central bank money printing [6] - Cutting spending leads to falling incomes, worsening the debt burden as incomes fall faster than debts are repaid [7][8] Consequences of Default and Restructuring - Borrowers' inability to repay loans impacts lenders' assets, causing bank runs and defaults, leading to a depression [9] - Debt restructuring, where lenders receive less or are paid over a longer period or at a lower interest rate, reduces debt but can cause income and asset values to disappear faster [11][12]

French unions are leading widespread anti-austerity protests on Thursday, raising the pressure on newly appointed prime minister as he struggles to find allies to piece together a budget https://t.co/dpUidGbQKB ...

Economic Context - The economic context in much of the rich world calls for fiscal consolidation [1] Political Considerations - The political context warns against austerity [1] Potential Solutions - Exploring alternative options beyond fiscal consolidation and austerity is necessary [1]

Market Trends & Political Risk - Argentine sovereign bonds experienced a decline following legislative challenges to President Milei's vetoes [1] - Congressional opposition to President Milei's austerity measures is intensifying ahead of the October midterm elections [1] Economic Impact - The political pushback against austerity is impacting investor confidence in Argentine sovereign bonds [1]

Economic Challenges and Policy Shifts - Germany's infrastructure is deteriorating, impacting daily life and economic efficiency [1][21][24] - The traditional German economic model, heavily reliant on exports, faces challenges from rising nationalism, protectionism, and competition from Chinese manufacturers [11][12] - Germany is shifting away from austerity with a €500 billion (500 billion euros) ad hoc fund over 12 years to modernize infrastructure [2][4] - The debt break, which previously limited borrowing to 035% of GDP annually, has been relaxed, allowing for increased public investment [7] Defense and Security - Germany recognizes the need to strengthen its defense capabilities due to the perceived threat from Russia and the declining reliability of the US as an ally [10][15] - There are no longer debt constraints on defense spending, signaling a significant policy shift [2][4] - Increased defense spending is seen as an opportunity for car manufacturers and related industries to diversify [2][18] - Underinvestment in infrastructure and defense during the Merkel years has led to deterioration [21] Infrastructure and Investment - In 2024, Germany invested a record €19 billion (19 billion euros) in infrastructure renovation [25] - Bureaucratic hurdles and capacity constraints may limit the ability to effectively spend the allocated funds [30][31] - The federal structure of Germany can hinder the efficient allocation of funds to local municipalities [33] Social and Political Implications - Failure to improve infrastructure and public services could fuel support for the far-right party, AfD [40][42] - Investment in public goods and infrastructure is seen as an investment in democracy [41] - Germany's aging population and increasing social costs necessitate integrating more women into the labor force and capitalizing on migration [36][37][38]

Government Policy & Economic Impact - Argentina's Senate approved a bill to significantly increase government spending on pensions and social security [1] - The increased spending threatens to derail President Javier Milei's austerity drive [1] - The timing of the bill's approval is before October's midterm elections [1]

Market Trends & Global Financial System - Investors are wary of longer-dated debt due to market volatility [1][4] - The financial system is repricing from a unipolar to a multipolar system [2] - Central banks are prioritizing financial stability over price stability, leading to higher inflation [3] Investment Strategies & Asset Allocation - Investors should consider hard assets like gold and private credit [3][4] - It's better to stay closer to home and position for upside in markets like equities or commodities [5] US Economic Outlook & Fiscal Policy - Tariffs won't generate enough capital to sustain the deficit [2] - The US may face austerity measures, including spending cuts, potentially starting in 2026 [2][5] - Voters are showing less tolerance for fiscal profligacy [6] - The US can continue spending at a clip of 6-7%, but eventually needs to find ways to fund the Treasury, cut spending, or depreciate the currency [7]