Monthly Archives: June 2015

Inaccurate Statistics and the Threat to Bonds

Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher. There are two… Read more »

Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher. There are two… Read more »

The Over-Valued Dollar

There are two connected reasons usually cited for the current dollar strength: the US economy is performing better than all the others, leading towards relatively higher US dollar interest rates, and that this is triggering a scramble for dollars by foreign corporations with uncovered USD liabilities. There is growing evidence that the first of these reasons is no longer true,… Read more »

There are two connected reasons usually cited for the current dollar strength: the US economy is performing better than all the others, leading towards relatively higher US dollar interest rates, and that this is triggering a scramble for dollars by foreign corporations with uncovered USD liabilities. There is growing evidence that the first of these reasons is no longer true,… Read more »

That Fallacies of GDP

The common error of confusing growth with progress goes largely unnoticed, though it permeates all macroeconomic analysis. There is no better example of this mistake than the fallacies behind the interpretation of Gross Domestic Product. GDP is the market value of all final goods and services in a given year. As such, it is only an accounting identity reflecting… Read more »

The common error of confusing growth with progress goes largely unnoticed, though it permeates all macroeconomic analysis. There is no better example of this mistake than the fallacies behind the interpretation of Gross Domestic Product. GDP is the market value of all final goods and services in a given year. As such, it is only an accounting identity reflecting… Read more »

Doubts on monetary policy

The leading central banks in the advanced economies insist their policies are guided by targets, usually expressed in terms of the annual increase in a relevant consumer price index (CPI).  For the ECB, the target is annual CPI inflation below, but close to, 2%.  For the Bank of England (BoE) it is an annual rise in CPI of 2%,… Read more »

The leading central banks in the advanced economies insist their policies are guided by targets, usually expressed in terms of the annual increase in a relevant consumer price index (CPI).  For the ECB, the target is annual CPI inflation below, but close to, 2%.  For the Bank of England (BoE) it is an annual rise in CPI of 2%,… Read more »

Euro-sclerosis

There appears to be little or nothing in the monetarists’ handbook to enable them to assess the risk of a loss of confidence in the purchasing power of a paper currency. Furthermore, since today’s macroeconomists have chosen to deny Say’s Law, otherwise known as the laws of the markets, they have little hope of grasping the more subtle aspects… Read more »

There appears to be little or nothing in the monetarists’ handbook to enable them to assess the risk of a loss of confidence in the purchasing power of a paper currency. Furthermore, since today’s macroeconomists have chosen to deny Say’s Law, otherwise known as the laws of the markets, they have little hope of grasping the more subtle aspects… Read more »