The moment when the global economic crisis caused the pandemic to disappear, at the same time, a financial crisis, may have disappeared. The money injected into the financial system by the richest countries only prevents the inverters from entering the panic that flows more, forcing the bullets to reach maximum historical levels. As far as the markets are concerned, this test was very successful. ¿Oh no? High profile investors, experts and observers of debate markets about the near future. It is clear that what happened when it came to the end of this expansionary monetary policy was the actions and benefits of debt that are contributing between the financial capital of the world. In the best of cases, the markets respond in an orderly manner. In the peer, lands in Latin America tienen las de perder. The ghosts of inflation, inequality and the flight of capital are closing in on the fund.
As part of the pandemic and the first binding commitments, the Central European Bank and the Federal Reserve in the United States, indicate that interest rates will follow in order to incentivize banks to ensure performance. Additionally, we are announcing that we will be buying millions of millions in financial assets to boost liquidity in the system. Japan wine after, announcing similar programs in the bills of yenes. If one is disappointed, the purchases by the Fed, as known to the Federal Reserve, have increased levels without precedent, while selling billions of dollars in bonuses and other instruments in a single day. The monetary support has been, in short, spectacular and never before seen.
The Fed has converted into a cautious counterparty species that has stated in detail that it will denounce the financial markets, impulsive as well as the prices. On the other hand, the hecho of which his suitcase of interest is close, has taken to Wall Street to buy deuda of emerging lands, many of them in Latin America, because ofquees tasas alas altas. These apartheid realities are converging here: while the region is falling apart as the most deadly of the pandemic and hopes for a slow recovery compared to the rest of the world, the inverted corns to perform money, the only one who can pay it back. The investors are already taking a risk, but it is not clear if it is well done.
“With all this being seen as a distraction, averaging if the economy is in recession is like a treaty evaluating a tuberculosis fever after taking a large dose of aspirin,” wrote investor Seth Klarman in a card to customers of his exclusive Baupost fund, según el Financial Times. “But as soon as the water is poured into the water, it is almost as if it were raining, the inverters are conditioned to not recognize the fire,” he said.
Jeremy Grantham, reconnaissance British investor who captures his own company, GMO, advises that markets at the moment have a bureau that will inevitably stall “because much of what the Fed intends to do, with the prejudicial effects on the economy and wallets in correspondence” . Does not equate: for the majority of high investors, this will be the most important event of his career. ”
Hasta el Fondo Monetario Internacional (FMI), in tono menos alarmista, has held a debate on the possibility that the financial establishment vista has very high at the end of a note published on 27 January. “With the inversionists stating that they support the policies of support, it appears that the excess of confidence is filtering in the markets; is, united in the apparent uniformity of the opinion of the inversionists, increases the risk of correction of the markets or the “revaluation”, says the report of the IMF.
‘Gamestop’ and other anomalies
The markets are empowered to act in an atypical manner, explains Daniel Lacalle, economist, fund manager and now economic assessor of the Popular Party in Spain. In addition, a mass of users of the online forum Reddit is organizing to buy Gamestop shares, a video game company that from now on will report losses and that in French direction the bank will go bankrupt. With the intention of demonstrating on Wall Street that a certain amount of money can be obtained, if necessary, the order of the markets will be dismantled, sufficient actions will be taken to impose its price, causing miles of millions to be lost and some funds paid for in the future.
“This type of surprise event is a second derivative of the excess liquidity and expansionary monetary policies”, Dacelle Steste Lacalle, also author of books on economics and finance, on the Madrid telephone. “As far as life goes, there is a sensation between the minority investors, between the small investors, that the market and the variable interest rate actions can only be subdued. Ante an excess of liquid and bajísimos types of interest are percibe as no ten riesgo create a a short print, which is the case of Gamestop, although it is not founded on a solid position of the company ”.
The same thing happened with a cryptocurrency called Dogecoin, which was launched on the market, originally, as a type of bromine, but during 2020 I found interested investors from Elon Musk’s story, who impulsed his price on the star. Bitcoin, the world’s largest cryptocurrency maker, has contributed at levels not seen before the 2020 finals, driven by its search for loans without importing the risk, at the moment, Lacalle insures. It is also particularly important for countries such as Argentina and Venezuela, given that they have attracted an attractive inversion to avoid inflation and generate a surge.
The ballots in Latin America have benefited from this optimistic sentiment, as a result of the derogation of politicians in the EU, Europe and Japan. In Mexico, for example, the Index of Prices and Contributions regressed to the prevalence of the pandemic, due to the fact that the economy passed 8.5% last year and the country is in the midst of a severe crisis since the Great Depression. The same thing happens in Brazil and Chile, among other countries.
More bonuses than ever
As regards credit bonuses, Governors and companies in Latin America were pleased to approve the moment to pay tribute, assured Jonathan Fortun, head of banking statistics and economics at Washington, the International Finance Institute (IIF). In 2020, Latin America will be regresaron con fuerza on Wall Street, emitting a total of 115,200 million dollars and deuda. In addition, all emerging markets will issue 614,400 million dollars this year, a new record. In addition, emissions will intensify: in the first 27 days of this year alone, emissions will reach 115,230 million dollars.
“Commence fund gestures have the potential to lead to its local market, it is called the American market, and here comienzan to say ‘good, I’m pissed off at this bonus of a Mexican company or this action of the Brazilian company’, and is just this is the golondrina capital that commenza a fluir ”.
It is fast as entering the money market and it is one of the major preoccupations with the G3 monetary policy, as it is known to the three central banks of the EU, Europe and Japan. In 2013, the Fed verklaar is a list to emcee to threaten the assets it bought to help the financial system since 2008, when the financial crisis subsided. The mero announcement, since the central bank is going to sell, generates capital gains from emerging countries. Between the most golfing months is the Brazilian real. This period is known as taps tantrum, it is said that the “rabies” rating is in response to the inversions of the announcement that the Irish monetary authority will gradually reduce its participation in markets.
We are called taps tantrum 2.0”, Dobbelsteen Fortun, about the possibility of buying something similar in a near future. “The Fed and its legislators have, in the end, a balance sheet. For a lad to be able to take this intervention of the market, that for those who have a positive interest in maintaining the economy live with this line of liquidation very, very high. But on the other hand, there are those who believe that this line of liquid traiga malas costumes in the markets and creates perverse incentives ”.
Some very positive of this policy has been that the dinosaur has fluent Latin America, helping the countries to reinvent parts of the economy, insures Fortun. “If there is such an incentive, it will also have a very high impact and there will be no absolute formula for saccharine and there will be a perfect moment to do it”.
“Correction” in the markets
The IMF did not call it quits, but has announced that sovereign valuations in the market will lead to a “correction” that generates instability and affects the poorest, including Tobias Adrian, Financial Advisor and Director of Monetary and Financial Aid Markets FMI and author of the text published in the finals of my past. “If there is a correction in the markets, it will lead to more debilitating losses and those are the poorest countries that are more interested in emitting debt”.
Sondeverbod, for Adrian, an abrupt cut in emerging market activities at the moment in which the monetary policy change is not inevitable. The 2013 “was more of an exception than a rule”, argues, and that much depends on how the monetary authorities communicate their intentions to initiate a gradual reduction of their participation in the market.
“Habiendo dicho eso, por supuesto, también hay muchas otras raazone que pudieran detonan una salida repentina de capitales”, asegura Adrian. The markets in Paris have valued the day of the covid-19 more than the one that resumes the vacancies, dice. The consumption habits have changed, possibly, in a permanent way. The vaccine function, however, is likely to increase in the health of humans that impacts production in large numbers.
The low interest rates, as well as the wealthy countries, could lead to a deficit in inflation, which would take some time to the central banks to retire slowly and gradually. “In the majority of countries, including emerging markets, inflation is due to objective debate, but at some point it may change,” Adrian doubles, “because of this, the politics of politics can be very different between countries. , and this will be a challenge ”.
Inflation, poverty and depreciation
Lacalle val saam y va más allá: “El aumento constante de la masa monetaria sin un una real de la moneda local a lo que lleva es a la inflation, al empobrecimiento las las classes más pobres ya la salida de capitales”. For the specialist, this scenario is clear.
The Latin American governments have been preparing with sufficient international reserves in their arcs to make changes to the type of change that is currently taking place as countries develop empires to change their monetary policy. And not only that, it seems to oppose the temptation to do what the Fed does, increasing the amount of money that is issued in its local currencies. “What is it that will happen when the Federal Reserve increases mass money? Many Latin American central banks say ‘ah, what a good idea, we will make our own’. But it is clear that increasing the monetary mass in local currency, while the demand for local currency only is not necessary, means that in many cases it is diminishing ”
“The tequila crisis in Mexico, the Argentine crisis, we have so many examples of the past,” Lacalle said, “play the Federal Reserve without keeping the demand for dollars always a financial crisis, high inflation and employment”.
Subscribe here a la newsletter from EL PAÍS América and receive all the information keys of the region’s news.