Bailouts and tradewars - closer than you think

Bailouts=Subsidies=Protectionism=Competitive devaluations=Trade wars=,,,,,

I stop there. just dont want to take it further, but its not getting better down the line - thats for sure.
So, where are we now?

I would suggest that the world is somewhere between subsidies and entering the stage of competitive devaluations.

Lets go for the easiest ones;

FX; Any economy with twin deficits still not freefloating? I will bet they will before long. Which other countries will get dragged down along with it? And if they are freefloating what does their net hardcurrency debt exposure look like? Who will sort it out? The IMF?

Equities; Any Bank lending in large to corporates and households in such a country? Sell that bank stock (again), it will soon be bailed out or become worthless. In either case, shareholders get nothing. Any construction company with huge balancesheet exposure in a country like this?,,,,,, etc etc


I suspect I will get a few reasons to revert on this theme again over the next few weeks.









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