Posts Categorized: Guest Contributions

Why the EU is Doomed

We are accustomed to looking at Europe’s woes in a purely financial context. This is a mistake, because it misses the real reasons why the EU will fail and not survive the next financial crisis. We normally survive financial crises, thanks to the successful actions of central banks as lenders of last resort. However, the… Read more »

We are accustomed to looking at Europe’s woes in a purely financial context. This is a mistake, because it misses the real reasons why the EU will fail and not survive the next financial crisis. We normally survive financial crises, thanks to the successful actions of central banks as lenders of last resort. However, the… Read more »

The End-point in Financial Credit

Since the 1980s, markets have had to adapt to a world of infinite credit. Of course, this credit has not been available to everyone: it has been principally deployed in favour of governments, financial markets, and big business. It amounts to a cartel, planned or unplanned, a partnership between banks and government that dominates and… Read more »

Since the 1980s, markets have had to adapt to a world of infinite credit. Of course, this credit has not been available to everyone: it has been principally deployed in favour of governments, financial markets, and big business. It amounts to a cartel, planned or unplanned, a partnership between banks and government that dominates and… Read more »

What to do About Refugees

Last year literally hundreds of thousand refugees crossed from Turkey to Losbos and others ventured on a perilous voyage across the Mediterranean to get away from the hell in their own countries – some of which were caused by well-meaning Western politicians who thought that democracy in Libya was the way forward for them. The answer probably lies in… Read more »

Last year literally hundreds of thousand refugees crossed from Turkey to Losbos and others ventured on a perilous voyage across the Mediterranean to get away from the hell in their own countries – some of which were caused by well-meaning Western politicians who thought that democracy in Libya was the way forward for them. The answer probably lies in… Read more »

The Fed’s in a Bind

One can understand the Fed’s frustration over the failure of its interest rate policy, and its desire to escape the zero bound. However, since the FOMC has all but said it will increase rates at its December meeting, events have turned against this course of action. The other major central banks are in easing mode,… Read more »

One can understand the Fed’s frustration over the failure of its interest rate policy, and its desire to escape the zero bound. However, since the FOMC has all but said it will increase rates at its December meeting, events have turned against this course of action. The other major central banks are in easing mode,… Read more »

Advice to the Prime Minister

Your country faces a stagnating economy. Let us assume your Prime Minister (or President if that is who holds the executive power) seeks advice from two imaginary economists. PM: You two economists have different views on what our economic policy should be. What is your advice? FIRST ECONOMIST (Austrian school): Prime Minister, the reason we face a stagnant economy… Read more »

Your country faces a stagnating economy. Let us assume your Prime Minister (or President if that is who holds the executive power) seeks advice from two imaginary economists. PM: You two economists have different views on what our economic policy should be. What is your advice? FIRST ECONOMIST (Austrian school): Prime Minister, the reason we face a stagnant economy… Read more »

Credit Deflation and Gold

There is a common view in financial markets that credit deflation is bad for gold prices, because gold nowadays is regarded as an asset to be sold in the scramble for cash when people are forced to pay down their debts. When asked by Congressman Ron Paul his opinion on gold four years ago, Ben Bernanke replied it was… Read more »

There is a common view in financial markets that credit deflation is bad for gold prices, because gold nowadays is regarded as an asset to be sold in the scramble for cash when people are forced to pay down their debts. When asked by Congressman Ron Paul his opinion on gold four years ago, Ben Bernanke replied it was… Read more »

Capital Markets & Banks

For those central bankers who have been worrying about a lack of volatility in capital markets and investors’ apparent insensitivity to risk, the past few days’ trading will have come as welcome relief.  In the past week, euro zone peripheral bond yield spreads over German Bunds have widened, by more than 60 bps in the… Read more »

For those central bankers who have been worrying about a lack of volatility in capital markets and investors’ apparent insensitivity to risk, the past few days’ trading will have come as welcome relief.  In the past week, euro zone peripheral bond yield spreads over German Bunds have widened, by more than 60 bps in the… Read more »

Economic Insights – Euro Strains Re-Emerge

Today’s meeting of the ECB’s Governing Council is taking place in Naples. ECB policymakers will be able to see at first hand, if they care to look, what effects euro zone policies are having on Mediterranean member-states. The jobless rate in Naples, at the last count, was running at 25%, and at 6% for the 15-24 age-group.  This is… Read more »

Today’s meeting of the ECB’s Governing Council is taking place in Naples. ECB policymakers will be able to see at first hand, if they care to look, what effects euro zone policies are having on Mediterranean member-states. The jobless rate in Naples, at the last count, was running at 25%, and at 6% for the 15-24 age-group.  This is… Read more »

Economic Insights – Central Bank Activism

The ECB Governing Council is next due to meet on 6 November to assess the state of the euro zone economy and to decide what, if any, adjustments to make to monetary policy.  According to surveys of market opinion, the ECB is not expected to take fresh action this month.  December, when revised staff economic… Read more »

The ECB Governing Council is next due to meet on 6 November to assess the state of the euro zone economy and to decide what, if any, adjustments to make to monetary policy.  According to surveys of market opinion, the ECB is not expected to take fresh action this month.  December, when revised staff economic… Read more »

A Market Reset is Due

Recent evidence points increasingly towards global economic contraction. Parts of the Eurozone are in great difficulty, and only last weekend S&P the rating agency warned that Greece will default on its debts “at some point in the next fifteen months”. Japan is collapsing under the wealth-destruction of Abenomics. China is juggling with a debt bubble that threatens to implode. The… Read more »

Recent evidence points increasingly towards global economic contraction. Parts of the Eurozone are in great difficulty, and only last weekend S&P the rating agency warned that Greece will default on its debts “at some point in the next fifteen months”. Japan is collapsing under the wealth-destruction of Abenomics. China is juggling with a debt bubble that threatens to implode. The… Read more »