The mainstream narrative as it relates to Chinese money is “tightening.” Having survived the economic downturn last year, we are to believe that the PBOC is once again on bubble duty. They raised their reverse repo rates, considered to be their policy benchmarks, three times up to mid-March. The central bank also increased the rate on its Medium Term Lending [...]
The Bretton Woods system was intentionally set up to funnel monetary convertibility through official channels. The primary characteristic of any true gold standard is that any person who wishes can change paper claims into hard money. It was as much true in any one country as between those bound by the same legal framework (property). What might differ were the [...]
The Federal Reserve’s complete change last year wasn’t something that happened all at once. There were several hints that a lot was going on behind the scenes that may never become public, including five years (now four) down the road when the full policy transcripts are released to the public. There was more interest in R* and secular stagnation, for one, [...]
In 1830, France was once more swept up in revolution, only this time at the end of it was installed one king to replace another. Louis-Phillipe became, in fact, France’s last king as a result of that July Revolution. The country was trying to make sense of its imperial past with the growing democratic sentiments of the 19th century. Despite [...]
It’s such an obvious thing, so maybe that is why no one mentions it. I doubt that is the reason, however, because doing so isn’t a mystery so much as narrowing down suspects. That is why when talking about the so-called natural rate of interest, or R* (r-star), the issue is (intentionally) cloaked in the language of the very long [...]
For the third consecutive month real average weekly earnings fell year-over-year. In March, at least, with the CPI starting its downward leg the decline was by the smallest amount; essentially flat but fractionally less than zero. It was the first time real wages have fallen three in a row since early 2012. The six-month average is just about zero, too, [...]
The more I look back the more I am convinced that this version of “reflation” was born Japanese. It all seemed to turn around in early July 2016, the very week that whispers of the, for some, long-sought “big one.” It was all over the financial press all around the world. Having gone as far as negative rates (NIRP) and [...]
Six months ago back in October, IBM reported what seemed to be encouraging results. Though revenues at the company were down for the eighteenth consecutive quarter, they were so by the slimmest of margins, just -0.3%. For Big Blue, that had been the best revenue comparison since the first quarter of 2012 back when global recovery was the most plausible. [...]
The aging of the Baby Boomers is not something that caught economists completely by surprise. That generation has been the subject of (academic) study going back to the surge in birth rates right after World War II. In economic terms, the challenges presented by the prospective retirement years for this cohort has been anticipated to some degree all along, particularly [...]
The textbook says that whenever the central bank raises its policy rate that means tightening. Actual experience over more than just this last lost decade demonstrates that at the very least it is much more complicated than that. There is far more evidence of monetary policy being nothing more than a response, as that reverse condition can absolutely be established [...]
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