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 [...]
With global economic perceptions finally creeping toward financial perceptions (not stocks) despite the enormous and mostly ongoing “stimulus” almost everywhere, it is useful to review once more the assumed general mechanisms. Step 1 is really the most basic and traditional element of central banking, as liquidity, broadly speaking here, is currency elasticity in its more modern format. Increasing liquidity is [...]
When the difference between your rhetoric and your actions is wide, inconsistency is pretty much axiomatic. However, Janet Yellen’s press conference was much more than that. I understand it’s a lot to charge blatant dishonesty, but almost everything she said is cow manure. And I make that assertion not on my own reading of the situation, but on hers. The [...]
If we are being honest and using words as they exactly mean, the recovery actually ended in 2012. My sense of dating would mark that as March 2012 since so many various data series held that month for what has been a durable inflection. It was true not just here in the US, but across the globe as 2012 was [...]
I have no idea what the Fed will do except to say it is likely to make matters worse regardless. That is the nature of monetarism in 2015 in no small part because that is where a financialized economy can only lead. Having been unable to do so this year so far, however, does seem to suggest at least a [...]
The new week opens much the same as last week traded, with narrow ranges abounding in risky asset prices. From leveraged loans to junk debt, funding markets continue to run the correlations. From this “dollar” view, the lack of “buying” interest in the corporate bubble, bargain value or not, may more properly be understood as lack of “funding” interest. On [...]
When grounded in the framework of traditional banking, wholesale dynamics can be quite confusing to the point of being impenetrable. Nowhere is that more the case than the wholesale ideas of currency and what counts for establishing chains of traded liabilities. In the traditional banking/monetary framework, everything is reducible to money; all else are just derivative claims on it. The [...]
In February 2010, Bank of England chief Mervyn King was very worried about the fragile nature of the British recovery as it fit within the more nebulous global hoard. There were emerging threats from an “unexpected” setback over a tiny little country on the Aegean, perhaps depressing Europe so soon out of the depths of the global Great Recession. Mervyn [...]
When the Bank of Japan announced on October 31, 2014, that it would increase the scale of QQE to ¥80 trillion annually, it noted the usual surfeit words that have clearly been passed around to everyone within network connectivity of the central axis of orthodox economics. You can honestly close your eyes and have someone read aloud the text and [...]
Stay In Touch