While on the other side of the Pacific economists try to decipher what China has truly gotten itself into, over the Atlantic the Europeans are admitting that trillion is again not “enough.” As I have written repeatedly, the adjectives attached to QE depend on the tense. Ahead of time, peering into the unwritten future, QE “will be” powerful and able, [...]
There probably should be a cottage industry trying to figure out what Albert Einstein actually said or wrote quite against what is typically attributed to him (or Abraham Lincoln, Winston Churchill and many others). One such nugget purported from his genius was that compound interest is the most powerful force in the universe. That is how the sentiment seems to [...]
Since some markets seem to be waiting on either longer lingering in ZIRP (US) or renewed and heavier QE (Japan, Europe) it is worth examining exactly what they are anticipating. Obviously, that desire doesn’t extend into the real economy since the downward fluctuation in 2015 pretty much dissolves and absolves any direct monetarism correlation. What is left is a high [...]
Japan’s Prime Minister Shinzo Abe declared last week that Japan is no longer suffering from deflation the day after his own government statistics showed that Japanese prices declined for the first time since QQE began. That is actually great news for the Japanese people, though Abe and Kuroda at the Bank of Japan continually pledge to end the relief. Abe’s [...]
From the growing inconsistencies even in statements about the short run, economists are going to have to be careful lest they conclude monetarism doesn’t work. That is, of course, where most of the rest of the world is headed (and where the “dollar” already resides) but the strains to credulity lately are nails in the coffin. I described the political [...]
I understand the conceptions very well, as the dominant economic theory is something like “no pain, no gain.” In the words of many central bankers, almost in unison of not just intention but tone and even exact phrasing, there are costs to getting the economy moving forward. In Bernanke’s version, savers are to sacrifice in favor of financial redistribution that [...]
Top News Headlines Migrant crisis grips Europe. China finds a way to stop market from falling; trading suspended for parade. US stocks resume slide, down 3.4% for the week. ECB contemplates new round of QE. Markets shrug. Economic News Mixed employment report confuses rate hike calculus. Manufacturing still weak. Chicago PMI, Dallas Fed survey, ISM manufacturing all less than expected. [...]
I don’t think Mario Draghi panicked, but China is as good a scapegoat as any at the moment. The ECB’s intended adjustment in the PSPP (QE) is cosmetic, but then again QE itself is pretty much only that to begin with. It seems pretty obvious given the desperate lack of any positive impact from it so far, and the very [...]
The re-crash of oil prices during the recent “dollar” wave/run were hard on almost everyone involved, economically and otherwise, but perhaps not more so than the ECB and its QE proponents. Despite being attributed with every minor upward move that could plausibly be assigned, for all the hype there has been very little actual movement anywhere of significance. The virtuous [...]
Let’s start by stipulating that the ECB’s operations are far more complex. This is the case both in terms of actual operations but also in trying to figure out what goes where and why. That is at the start unsurprising given the European monetary framework; even though the euro as a denomination is continental there are still national fissures in [...]
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