Daily Digest

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Daily Digest 2/7 - China’s Aging Population Creating New Debt Crisis, This Bond Market Could Get Uglier
by Les Pierce
Wednesday, February 7, 2018, 10:20 AM
Economy
Once-rich Venezuelans live as beggars in Colombia, but they don’t want to go back
The once wealthy nation — which used to provide billions of dollars in aid to its allies — is caught in a hyperinflation spiral. Around four million people — of the country’s population of 30 million — might already have left the country, according to local polling firms.
Brazil's pension bill short on votes, running out of time
Economists said Brazil’s deficit is unsustainable and mainly driven up by pensions. In GDP terms it has more than doubled between 2014 and 2017. Official figures released last month showed that the social security deficit grew by 18.7% in real terms in 2017, to a record 268.8 billion reais ($82.49 billion).
China’s ageing population is creating a new debt crisis for Beijing as pension shortfall widens
Gap between workers’ contributions and benefits paid out set to reach 600 billion yuan this year and 890 billion yuan in 2020, analyst says
Venezuela announces 99.6 percent devaluation of official forex rate
Venezuela is undergoing a major crisis, with quadruple-digit inflation and shortages of food and medicine. Economists consistently describe the 15-year-old currency control system as the principal obstacle to functioning commerce and industry.
Central banks were behind the complacency in markets, now investors are spooked: Economist
Central banks created an artificial environment that took out "all the volatility, all the uncertainty" from markets, said Karsten Junius, chief economist at Bank J. Safra Sarasin.
ECB increases buying of company debt despite criticism
Aimed at lowering borrowing costs for companies, the ECB’s purchases of corporate bonds have been criticized by some European lawmakers for being too risky.
But with the ECB’s 2.55 trillion euros ($3.2 trillion) bond-buying scheme due to run at least until September, Frankfurt was expected to delve more heavily into credit to avoid hitting a cap on how much sovereign debt it can own in Germany.
This Bond Market Could Get Uglier
A little more than a week into the New Year, billionaire bond guru Bill Gross proclaimed the start of a bond bear market, after an extraordinary bullish run spanning more than three decades. Two weeks later, another billionaire, Ray Dalio of hedge fund firm Bridgewater Associates LP, piled on with a forecast of the worst bear market since the early 1980s.
Gold & Silver
Click to read the PM Daily Market Commentary: 2/6/18
Provided daily by the Peak Prosperity Gold & Silver Group
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