Please read on for a little light Christmas cheer, with apologies to the spirit of Henry Wadsworth Longfellow.
Category Archives: Macro
Has the Fed ‘Bought the Farm’?
Those of us who have not been stuck on Mars for the past five years, tending our potato patch, will be dimly aware that the Grand Mages of the economic world – the central bankers – have been manfully searching their spell-books and bubbling their alembics in order to exorcise the dreaded demon of Deflation from the land, terrified that the world will collapse around them if too many shoppers are too routinely confronted with anything that might smack of being a bargain. Continue reading
Hocus Pocus
We are in danger of being blinded by semiotics and so losing sight of substance. We are so convinced that the medium IS the message that we have forgotten to seek for the meaning it is supposed to convey. We have given in to the quack doctors and their unscientific theories of humours in the body economic. We are now so anxious to keep the patient’s temperature minutely regulated that we have neglected to do anything about the malarial parasite which had earlier given him a fever and now has him shivering through a chill.
Madness in the Method
Seemingly oblivious to the idea of ‘purdah’ – a period of dignified silence to be observed in the run up to the taking of policy decisions—the ECB’s Chief Economist, Peter Praet, felt able to give AFP a wide-ranging interview this week and truly remarkable it was, too.
Inside, Outside, Nowhere is Home
To the delight of everyone with a vested interest in the continuance of the global central bank bubble, the latest data round from China revealed that, in the past four months, the cumulative total of new RMB loans in China has set a major new high, amounting to no less than CNY4.6 trillion—a number 50% or so greater than the average of the preceding two years and one equal to around $730 billion, or $6 billion a day, even at today’s newly depreciated rate of exchange. Yet, in that same time, the figure for ‘total social finance’ rose by no more than (sic) the 2012-14 seasonal average of CNY5 trillion.
When shall we be rid of these Turbulent Priests?
Gloom and doom are starting to spread, despite the increasingly hollow-sounding reassurances being provided on an uninterrupted basis by nearly every central banker who comes within hailing distance of a microphone. [Extracted from ‘Midweek Macro Musings‘, Click Here for details]
Memo to Mario: Money is fungible
Since the spring of 2014, the euro has lost around a quarter of its value, Mario Draghi has finally joined the Big Boy’s League by launching his own, decidedly belated version of QE, and—everywhere but in poor, benighted Greece—the growth of the money supply has been bordering on the explosive. Continue reading
The Only Form of Permanence
Perhaps the first great lesson of economics, as emphasized by Henry Hazlitt, is that there is no free lunch. The second, courtesy of Frederic Bastiat, is that if it sometimes appears that there is one, it means that we simply have not looked deeply enough into the consequences of our attempt to enjoy it. The third, the joint insight of several generations of Austrians, is that the attempt to buy one for ourselves by resort to monetary manipulation is eventually doomed to fail. A cynic might say that the fourth and final lesson is that no-one ever wishes to abide by the strictures inherent in the first three rules. Continue reading
Moths to the Flame
That’ll teach’em!
Enticed by the seemingly risk-free profits being offered by the Chinese stock market stabilization drive, burned fingers spent the week from the lows creeping back to the flames, adding another $1 billion-a-day to the official margin total as they did. Continue reading
Laying the Foundations
As the Yellen Fed inches painfully towards taking its first ‘data-dependent’ steps to raise rates (albeit with the promise that such a process will follow the disastrous, well signposted creep upward which enabled so much damage to be wrought after the Tech Bust), the evidence mounts as to just how belated any such action will be. Take housing, for instance. Continue reading