The banking system should take in money (or create it) and then reallocate throughout the economy as needed. It is the presumed expertise of the banking system which leads to necessary efficiency so as to create and maintain sustainable economic growth. Loans, unlike liquid assets such as bonds, are how money flows to what would otherwise be underserved, therefore illiquid and depressive parts of the economic whole.
Without lending – as during the aftermath of the Great Collapse – at best partial recovery which isn’t nearly good enough. Absent redistribution via bank intermediation, too much of the economy is left without monetary resources which then congregate in too narrow spaces; such as the bond market for government issues financing wasteful, inefficient government spending that would be better directed elsewhere but can’t be without lending.
As of the latest data for Q2 2021, bank assets total up to $24.4 trillion comprised of just $12.0 trillion in lending while $1.3 trillion in UST’s along with an astounding $3.7 trillion of GSE’s. Loans which had made up about 60% of bank assets when Bernanke was “saving” the world, are now, for the first time since 1955, less than 50%.
And these totals don’t take any account for rates of growth which have declined substantially since 2007, a complete regime shift in the aftermath of “intense strains in the global dollar funding markets began to spill over to U.S. markets.” Like the thirties (if not to the same degree), the banking system has abandoned too much of its redistribution function in favor of the safest and most liquid.
People ask me all the time what it would take for me to change positions, to climb aboard the inflation view that somehow only gains adherents the longer we go without any; or any answers for why this is.
My answer remains the same and incredibly simple: banking and redistribution. Without these, nothing has changed and therefore nothing will. There may be bouts of consumer price deviations along the way (see: 2008; 2010), without the intermediation they’ll never be more than transitory. - Jeffrey Snider
China Merchants Group, is a relative latecomer, but is investing heavily in emerging markets. By end-2016 the company owned or had operational rights to 40 ports in 22 countries, including Nigeria, Sri Lanka, Togo and Djibouti, based on our research. Even in the US, where ports are often off-limits for foreign investors, China Merchants has acquired small stakes in ports in Houston and Miami by buying Terminal Link, a French shipping line.- EIU.COM
Israel inaugurates Chinese-run Haifa port terminal, in likely boost for economy:
Israel on Wednesday officially inaugurated a new port terminal in Haifa Bay, the first of two recently built private port terminals that are expected to fuel competition, decrease import costs, and present a boon for the Israeli economy. Almost all of Israel’s international trade is handled via maritime routes and the Haifa port is the busiest shipping hub in the country, managing approximately half of all freight.
China’s state-owned Shanghai International Port Group (SIPG) won the tender in 2015 to operate the commercial shipping facility for 25 years, an arrangement that stoked controversy in Israel and abroad. The project’s proximity to Israel’s submarines, among other issues, raised security concerns, especially after reports revealed that neither the cabinet nor the National Security Council had any input on the deal. The project also raised the ire of the US, which sometimes docks military vessels in Haifa.
Chinese companies are handling major infrastructure and transportation projects in Israel, including winning the tenders to build and operate a private terminal in Ashdod, along with operating the one launched Wednesday in Haifa. Chinese firms are also building a key section of the Tel Aviv light rail system, and bidding to build additional lines.
The People’s Liberation Army (PLA) lures the US warship John Paul Jones and its female cigar-smoking commander Sarah Hunt, along with other US warships that are exercising “freedom of navigation” in the South China Sea, to render assistance to the Chinese trawler Wen Rui. Commander Hunt discovers that the Wen Rui has aboard “some type of advanced technological suite” that deserves a closer look. Meanwhile, the PLA nuclear-powered aircraft carrier Zheng He and other Chinese warships head directly towards the American flotilla and surround it. A PLA cyber attack shuts down communications between US warships and between those ships and Washington. PLA aircraft from the Zheng He sink two US destroyers, and when two US carrier battle groups arrive to join the fight, 37 US warships, including two carriers, are destroyed and thousands of American naval personnel are dead. The Chinese Communist Party (CCP) leadership manufactured a crisis in the South China Sea—which it had claimed for its own since the 1949 revolution—to exert its ownership of the Sea and to launch an invasion of Taiwan. The Chinese had won the Battle of the South China Sea in World War III…….The US President decides to further escalate by ordering the nuclear destruction of three of China’s cities, including Shanghai—population over 32 million. - Thus begins 2034, a novel of World War III, by Elliot Ackerman, a novelist and former Marine who served in Afghanistan and Iraq, and US Admiral (Ret) James Stavridis. The book is fast-paced—a page-turner that at the end of each section and chapter leaves you wondering what will happen next.