This Year’s 9-11 Anniversary Finds America in Even Worse Condition than 19 Years Ago

September 11, 2020

The United States suffered its worst military attack since Pearl Harbor on September 11, 2001, a solemn occasion that on each ensuing anniversary has become a sacred moment of remembrance. By late 1960, nineteen years after Pearl Harbor. America was king of the world. After an equal span of time, September 11, 2020 finds the country ranked 28th on the Social Progress Index, 9 rungs below its place in 2011. This year on 9-11 feels like no other. People are hunkered down in social isolation, not knowing when if ever it will be safe to drop one’s guard. The U.S. Covid-19 death count is less than 3,700 shy of 200,000 and dwarfs the number who died nineteen years ago plus in all America’s wars since WW2. The West Coast is burning from neglectful environmental policies. Racial relations are raw, and distrust is rampant on every level.

And yet despite some losses overnight, the U.S. dollar remains quite robust and largely unchallenged as the linchpin of the global monetary system. The realm of finance is full of paradoxes. The dollar fell overnight by 0.6% against the kiwi, peso and Aussie dollar, 0.3% versus sterling and the euro and 0.1% relative to the loonie and Swiss franc.

Share prices in the Pacific Rim bounced back 2.6% in Indonesia, rose 0.8% in China and Hong Kong, climbed 0.7% in Japan where a new prime minister is about to be selected, but fell by 0.8% in Australia and 0.6% in New Zealand. European stock markets are narrowly mixed.

The prices of gold and WTI oil fell 0.6% and 0.5% so far today. Ten-year sovereign debt yields slipped two basis points in Germany and a basis point in the U.K. but rose 2 bps in the U.S..

U.S. consumer price inflation rose 0.3 percentage points to a 5-month high of 1.3% in August, which is a tad more than had been expected and reflective mainly of a 0.9% monthly climb in the energy component.

German CPI inflation in August went up 0.1 percentage point to 0.0%, and the on-year contraction of German wholesale prices narrowed to 2.2% last month from 2.6% in July and 4.3% in both April and May.

Japanese domestic producer goods prices rose 0.2% on month but fell 0.5% on year in August. Import prices were 10.9% lower than a year before.

Revised Spanish August consumer price data showed no changed from July and a decline of 0.5% from August 2019.

More confirmation arrived of a slower paced recovery of activity in response to the relaxation of imposed restraints warranted by the pandemic.

  • British industrial production rose 5.2% in July after increases of 6.2% in May and 9.3% in June but remained 7.8% less than its July 2019 level. British GDP in May-July was 7.6% less than a year earlier. Construction output was still 12.8% lower than in July 2019.
  • Spanish industrial production followed a 13.6% jump in June with a 9.3% advance in July and was 6.4% below its year-earlier level.
  • Having rallied from 25.8 in April to 58.8 in July, New Zealand’s manufacturing purchasing managers index settled back to a reading of 50.7 in August, signalling minimal growth that month.
  • Japan‘s Ministry of Finance quarterly survey of business confidence showed a rebound among large firms from the second quarter’s -47.6 reading to +2.0; however, expected readings in the future are only 2.9 next quarter and 2.4 in the first quarter of 2021.
  • Industrial production in Hungary had jumped 17.2% in June but recovered a lesser 7.2% further in July and was still 7.3% lower than a year earlier.
  • In India, which has had the second most number of Covid-19 cases, industrial production in July remained 10.4% below the July 2019 level.
  • Mexican industrial production, which leaped 17.9% in June, rose by 6.9% last month and remained 11.3% below its year-earlier level.

Turkey’s current account deficit shrunk for a third straight month in July to $1.817 billion but compared unfavorably to a surplus of $1.99 billion in July 2019.

On-year Chinese foreign direct investment growth accelerated to 18.7% in August. The increase during the first 8 months of 2020 was 2.6%.

On-year Chinese M2 money growth slowed to 10.4% in August from 10.7% in July and 11.1% in both May and June.

Britain’s merchandise trade deficit widened 69% on month in July, trimming the goods and services surplus back to GBP 1.074 billion from GBP 3.902 in June.

Irish construction output last quarter was 35.7% less than in the second quarter of 2019.

Canadian capacity utilization dropped 9.5 percentage points in the second quarter to 70.3%, its weakest level since early 1987.

The Central Reserve Bank of Peru left its policy interest rate unchanged as expected at the record low level of 0.25%. Back-to-back full percentage point reductions were engineered in March and April to reach that level. Officials expect inflation below target to persist over the rest of this year and in 2021. A statement reaffirmed, “The Board considers it appropriate to maintain a strong expansionary monetary stance for as long as the negative effects of the pandemic on inflation and its determinants persist. The BCRP stands ready to expand monetary stimulus using a range of instruments.”

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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