Contrary to some recent research reports cited in the press I do not think we have seen any substantial rebalancing of the economy towards consumption in 2011. This is largely an argument being made by economists who did not see why Chinese consumption repression was all along at the heart of the growth model. These … Read more
The success of the “currency war” and “monetary tsunami” metaphors is unparalleled in strategies to confront the crisis. Guido Mantega, Brazil’s finance minister, achieved world fame in 2010 when he coined the “currency war” metaphor to characterize the problems that the expansionist monetary policies of the central countries were causing for various emerging countries, notably … Read more
In the last couple of weeks I’ve been pushing foreclosure fraud. Well, not pushing the fraud but rather arguing that foreclosure is fraud. It has to be. If a mortgage was registered at MERS, then the chain of title was broken. Broken chains mean the bank cannot foreclose. But that was MERS’s business model, and … Read more
Over the past few years, many writers have made the claim that Milton Friedman would roll over in his grave if he knew what Ben Bernanke was doing at the Fed. These observers claim that both the ad-hoc nature and scale of monetary policy intervention would never be sanctioned by Milton Friedman. I and others … Read more
Anyone who has ever risked blogging about inflation knows there are two kinds of commenters out there. First, there are those who are sure that inflation, although quiet lately, is poised for a big breakout that will destroy the economy. Second, there are those who are sure inflation has already done so, and that anyone … Read more
The people at NECSI sent me the following interesting blurb on the relationship between the rise in food prices and social unrest: http://necsi.edu/research/social/foodvideos.html. These videos illustrate the correlation between increasing costs of food and worldwide food riots, especially from 2000 until the present day. Both prices and riots peaked in 2008 and 2011 after a … Read more
Here’s why I believe that the current high price of oil is not enough to derail the U.S. economic recovery. New Jersey Historical Gas Price Charts Provided by GasBuddy.com Although the prices of oil and gasoline have risen significantly from their values in October, they are still not back to the levels we saw last spring or … Read more
From the Financial Times: A myth is developing that private creditors have accepted significant losses in the restructuring of Greece’s debt; while the official sector gets off scot free. International Monetary Fund claims have traditional seniority, but bonds held by the European Central Bank and other eurozone central banks are also escaping a haircut, as … Read more
“Nihil sapientiae odiosius acumine nimio“ (Nothing is more hateful to wisdom than excessive cleverness) Petrarch, “De Remediis utriusque Fortunae” Like Leo Messi charging his way through a packed Real Madrid defense, twisting now this way, now that, never stopping without being stopped, so did the Spanish sovereign debt surge forward, breaking directly into the red … Read more
Today Eurostat released the second estimate of Q4 2011 Gross Domestic Product. Real Euro area (EA) GDP declined 0.3% over the quarter (-1.3% on an annualized basis). In this release Eurostat provides a breakdown across region, spending categories, and industry, and is much more detailed than the preliminary flash estimate. It’s not pretty. The expenditure side was very weak. Household and government consumption declined … Read more