As I wrote earlier, in orthodox economics it is actually possible to declare a depression and a recovery at the same time. The Federal Reserve’s statistic for Industrial Production actually contracted for a fifteenth straight month in November, an occurrence observed only eight other times in just about a century of data. Thus, if IP, as one of the four [...]
The whole monetary issue as it pertains to the eurodollar system can be succinctly summed up as balance sheet capacity. In pure monetary terms, that is an enormous distinction. What counts as money is not what almost everyone still thinks it is, though those view should have been shifted almost a decade ago in August 2007. Money is instead “money”, [...]
For years it was uncontested convention that the lower the rate the better. Stimulus was, after all, intended as a borrower boost. Make the cost of adding debt low and lower, then it was assumed borrowers would borrow more than they otherwise might have with recovery the promising result. Every time rates went lower, the common refrain of “stimulus” went [...]
The American Enterprise Institute’s Francis Boyer award was established in 1977 by pharmaceutical firm SmithKline Beecham in memory of its former CEO. The purpose of the honor is to recognize those who have given significant contributions to government policy and social welfare. As sponsored through an erstwhile conservative think tank, the award, presented up until 2002, was given to prominent [...]
I think it necessary to qualify and clarify the conventional stance on the unemployment rate. In the mainstream, as noted yesterday, it has been something of an absolute. The lower it goes the more provocative the rhetoric on the positive side. After all, an economy at full employment cannot possibly be unhealthy, can it? That has been the great dividing [...]
That the repo market, as noted yesterday, has been beset by a persistent collateral shortage is relatively uncontroversial. Where once large blocks of MBS tranches were central to interbank flow and funding, their absence is still a fact of operation though that repudiation was a very long time ago. Even with that backdrop, however, it doesn’t explain a whole lot [...]
As the Chinese yuan continues to sink lower in what looks to be an increasingly uncontrolled fashion, the desperate linking of that to US interest rates becomes even more absurd. As shown yesterday, global currencies have run into great trouble with US rates moving higher and lower; in fact more so with lower US rates than higher. The connection between [...]
The cost of this economy cannot be strictly measured by statistics or even the massive deviations of those statistics. As noted earlier today, China’s exports in the twelve months ending October 2016 were figured to be just $2.2 trillion. Had the Great “Recession” actually been a recession, where the world resumed growth even modestly like that from the pre-crisis period, [...]
As if anyone needed any proof as to why economics needs to be so thoroughly debunked, it was on display again today. I am talking about Rome over Carthage defeat, where the textbooks of Economics (capital “E”) should be so salted and devastated in the same manner in which the Romans banished the Carthaginians forever to nothing but history. Economics [...]
Popular convention purports that the Fed established its independence in 1951 when it told the Truman administration it would no longer fix a ceiling on government bond rates. The Treasury Department had to finance the Korean War and the administration expected all its agencies to fall in line. With the debacle of the Great Depression, and then the second error [...]
Stay In Touch