Yield curve control, remember that one? For a little while earlier this year, the modestly reflationary selloff in bonds around the world was prematurely oversold as some historically significant beginning to a massive, conclusive regime change. Inflation had finally been achieved across multiple geographies, it was widely repeated, and this would create problems, purportedly, as these various places would have [...]
Consumer prices in Japan fell again in May, according to that country’s Ministry of Finance. The headline CPI was 0.1% less last month than it had been in the same month during 2020. Though it was the eighth straight for outright deflation, there was some good news in the core rate, if you could call it that, which flipped to [...]
While capital “E” economics can never seem to get out of its own, infatuated with statistics and regressions instead, small “e” economics is proven time and again. Simple supply and demand curves aren’t a realistic simulation of potential conditions, yet they are far more helpful than DSGE models even if highly stylized representations. Take, for example, lumber prices. Anyone remotely [...]
We got another disappointing employment report last week. Well, that's what everyone said anyway, that the complete WAG by the BLS that the US economy added 559,000 jobs in May was below expectations and disappointing. I suppose it is a tad disappointing but I find it hard to lament the fact that a half-million Americans found jobs last month. There [...]
Global factors. Both for inflation as well as money, in fact money therefore inflation. Only recently, yesterday, in fact, has the Federal Reserve pulled back the official curtain of silence and illiteracy if only a little to admit there’s so much more than what you’ve ever been told. Bank reserves aren’t the end of the story, especially in light of [...]
Words have meaning for a reason, to convey precise ideas easily and readily understood by the reader or listener. If you use the term “stimulus”, as its root already suggests you’d expect something to be stimulated by whatever is being classified using this specific grouping of letters/sounds. Context rounds out the meaning.For the last twenty years, you’d have been wrong [...]
The Australians are doing quite well, at least according to more recent data. A few hiccups hear and there, the economy Down Under has been riding high(er) on the Chinese rebound and the potential end to the pandemic. Earlier today, National Australia Bank’s survey of the first quarter business environment was thoroughly positive. At an index value of +17, this [...]
When their paper came out in January 2010, Carmen Reinhart and Kenneth Rogoff put a number on bond vigilantism as it had been known in prior history. The idea behind investor fickleness was simple and intuitive: profligate governments who finance their ill spending ways by borrowing will literally end up paying the price once the exceed common sense. And when [...]
For a short while, with reflation being traded in almost every corner of the global bond market, the Bank of Japan started to get “those” questions again. Almost of the humble brag variety. A few years ago, Japan’s central bank had widened what it considered to be an acceptable trading range for its 2016 QQE addendum of Yield Curve Control [...]
At the very least, you have to recognize the correlation. If you aren’t willing to consider causation, in part, there’s troubling coincidence in every place around the world between huge government deficits and less growth (therefore the constant inflation "puzzle"). You can argue that the former causes the latter, and that’s absolutely a valid case; when things get rough, neo-Keynesians [...]
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