We all know, or we think we do, what happens when central banks print money. There are any number of historical images from which we can refresh our collective memory. Weimar Germany usually comes to mind, as does Venezuela or Zimbabwe in recent times. But what about the opposite? It sounds absurd. No government officials in their right mind would [...]
Automobiles have come a long way in two decades. The import craze of this latest bout of globalization was in the car business handed an open door by a lack of quality, or perceptions about a lack of quality. The domestic auto industry in the seventies and eighties really did not shine its brightest. By the nineties, near constant problems [...]
I was going to write that there was bad news out of Japan last night, but is there really any other kind? I know that from time to time Japan’s various rebounds over the years are characterized as the greatest economic achievements in human history, but by and large very few outside the media actually believe that. Thus, there is [...]
The Q2 GDP report (+4.1% from the previous quarter, annualized) was heralded by the administration as a great achievement and certainly putting a 4 handle on quarter to quarter growth has been rare this cycle, if not unheard of (Q4 '09, Q4 '11, Q2 & Q3 '14). But looking at the GDP change year over year shows a little different [...]
In early March, the CEO of Hong Kong’s Monetary Authority (HKMA) Norman Chan issued a press release claiming among other things his quasi-central bank had more than enough reserves to defend the lower edge of the Hong Kong dollar’s (HKD) monetary band. In trying to settle what was clearly upset markets and not just those in and around Hong Kong, [...]
It was never really all that much. The best that might have been said was that it was a pause in the building of renewed deflationary pressures. The dollar had “risen” again especially in April and May, but then traded sideways through July. It wasn’t a rebound or even much that was positive, just less immediate heaviness. That appears to [...]
In December 1999, Princeton Professor Ben S. Bernanke wrote a relatively obscure paper largely denouncing the Bank of Japan’s shyness. Japan’s economy had by then been mired in its first Lost Decade, one which at that moment not everyone was sure should have been lost. It was fashionable at the time to pile on the BoJ. Dr. Bernanke argued for [...]
Yesterday, we spotlighted Brazil’s economy as perhaps a leading indicator for where things stand. Today, it’s China’s turn. Neither are very encouraging. Both offer instead only growing concern. The reason isn’t just the possibility of the world economy rolling over in 2018, rather it’s from what level any deceleration might have begun. Despite the characterization of especially the US economy [...]
Overshadowed by the “dollar” last week was the Bureau of Labor Statistics. The BLS reported the US CPI had increased in July 2018 by the highest rate since December 2011. Running at 2.95% year-over-year, consumer prices accelerated a little from June’s pace. Not only that, the CPI’s core rate of inflation sped up to 2.35%. That was the highest since [...]
There is just something about August. It is irresistible, apparently, in all the wrong ways. For starters, there are big ones and small ones but somehow they all line up against liquidity and plentiful eurodollar money. In the former class there was, of course, August 9, 2007, August 9, 2011, and August 10, 2015. Even in the latter category there [...]
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