Debt

At first glance, everything seems under control: stocks are holding steady and the U.S. economy is resilient. And yet, something is going wrong in the global financial system. In recent days, the cost of very short-term cash – the SOFR rate – has risen sharply.

While the stock markets are driven by algorithms and bitcoin is kept afloat by synthetic liquidity, the silver market highlights the divide between paper and reality.

France's public debt is mainly held by foreign investors and this is precisely what worries senators, the French Ministry of Finance, and the government: a loss of confidence among international investors would cause interest rates to skyrocket immediately.

With the US government shutdown, “fiscal QE” came to an abrupt halt. It comes at a time when the US Treasury has become the central player in providing liquidity to the system. The longer the situation drags on, the more the pipeline seizes up – and the greater the likelihood of an accident.

Fitch's downgrade of France's debt rating last Friday was expected. It remains to be seen whether Moody's and Standard & Poor's will follow suit on October 24 and November 28, which seems quite likely.

To function, a gold standard would require a far higher price than today. Will Donald Trump, willingly or not, help China and Russia rebuild the international monetary system? The answer could come within weeks — or months at most.

The situation in the US labor market now highlights its profound fragility, after two years of embellished statistics. In September, the Bureau of Labor Statistics made the largest negative revision in the history of payrolls.

France is going through a critical period in its history. The country's democratic and political crisis is now compounded by the possibility of a financial crisis.

Mitch Vexler, a real estate developer turned whistleblower, detailed what he considers to be a ticking time bomb at the heart of the US financial system: the way property taxes fuel public school funding and school bonds.

On September 8, the French government will face a decisive confidence vote. The risk is clear: if the government fails and the general strike brings the country to a standstill, France could plunge into a systemic bond and banking crisis within a matter of days, with no credible political support...