Europe

What Really Happened In Europe

By |2018-05-07T19:03:02-04:00May 7th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The primary example of globally synchronized growth has been Europe. Nowhere has more hope been attached to shifting fortunes. The Continent, buoyed by the persistence of central bankers like Mario Draghi, has not just accelerated it is actually booming. Or so they say. Last September, politicians were lining up to confidently declare as much, often deploying that specific word. When [...]

If There Was No QE, How Could There Be QT?

By |2018-05-07T17:04:12-04:00May 7th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

How big should the Fed’s balance sheet be? It’s a topic that has taken over a lot of academic discussions. Recall that before 2008 the level of bank reserves was practically nil. They didn’t play much of a role in any money market, required reserves or not (this should be a big clue). After four QE’s spaced out over many [...]

The Only Thing That Matters (Europe)

By |2018-02-28T11:34:43-05:00February 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Effective June 10, 2014, the European Central Bank cut the interest rate it paid on its deposit account to less than zero. That instrument in forming the floor for what is a money market corridor in European policy, it was the world’s first major NIRP experiment. Europe’s economy had by GDP been growing again for three straight quarters by then [...]

Blaming The Boom Basis

By |2018-02-22T18:31:50-05:00February 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Once the sick man of the global economy, Europe’s system had roared back in 2017. According to the narrative, everything is right right now on the Continent. Manufacturing couldn’t possibly be any better, and the ECB forced into “emergency” monetary measures for longer than almost anyone else (except, as always, Japan) is talking confidently about winding everything down. We are [...]

US Imports: A Little Inflation For Yellen, A Little More Bastiat

By |2018-02-06T16:49:27-05:00February 6th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

US imports rocketed higher once again in December, according to just-released estimates from the Census Bureau. Since August 2017, the US economy has been adding foreign goods at an impressive pace. Year-over-year (SA), imports are up just 10.4% (only 9% unadjusted) but 9.3% was in just those last four months. For most of 2017, imports were flat and even lower. [...]

What’s Missing In Europe Is What’s Missing Everywhere

By |2018-01-05T18:06:05-05:00January 5th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

American central bankers and economists aren’t alone in their Phillips Curve nightmare. They are joined by others practically everywhere else around the world. In Europe, for example, the unemployment rate there continues to fall while inflation keeps on misbehaving in its meandering. Unlike the US, however, the Europeans don’t have the luxury of burying millions of prospective workers in other [...]

It’s More Than Just The Absence of Acceleration, It’s The Synchronization Where There Should Be None

By |2017-11-30T16:30:26-05:00November 30th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the latest ECB figures, as of yesterday total “liquidity” added to the European banking system for that central bank’s ongoing monetary “stimulus” was just shy of €2 trillion. The outstanding balance in the core current account (reserves) held on behalf of the banking system was €1.296 trillion. In the deposit account, banks are holding €686 billion at -40 [...]

The Economics Definition of Sanity: Keep Doing The Same Thing Over and Over Because It Has To Work One of These Times

By |2017-11-07T12:46:27-05:00November 7th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We live in an age of statistics. They are everywhere, including a whole lot of junk numbers (endless studies) that don’t pass minimum scrutiny. Somehow, statistics have become the gold standard for at least the mainstream media in framing our view of everything from new discoveries to further exploration into how things work. That’s fine for a discipline like quantum [...]

Europe Is Booming, Except It’s Not

By |2017-11-06T19:51:30-05:00November 6th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

European GDP rose 0.6% quarter-over-quarter in Q3 2017, the eighteenth consecutive increase for the Continental (EA 19) economy. That latter result is being heralded as some sort of achievement, though the 0.6% is also to a lesser degree. The truth is that neither is meaningful, and that Europe’s economy continues toward instead the abyss. At 0.6%, that doesn’t even equal [...]

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