Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 10 belangrijke of informatieve artikelen en interviews die de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.

De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden.

Sinds december 2015 nemen we ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.

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Low risk as a predictor of financial crises – Jon Danielsson, Marcela Valenzuela, Ilknur Zer
26 maart
Reliable indicators of future financial crises are important for policymakers and practitioners. While most indicators consider an observation of high volatility as a warning signal, this column argues that such an alarm comes too late, arriving only once a crisis is already under way. A better warning is provided by low volatility, which is a reliable indication of an increased likelihood of a future crisis.
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Money Pumping Works — Until It Doesn’t – Frank Shostak
26 maart
According to most economic experts, when an economy falls into a recession the central bank can pull it out of the slump by means of money pumping. This way of thinking implies that money pumping can somehow grow the economy. Indeed US historical evidence supposedly does show that easy money policy seems to work. For instance on average between 1970 and 2018 it took about 11 months before increases in money supply were followed by increases in the growth rate of industrial production
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UK Vows to Crack Down on Money Laundering: What Will This Do to the Property Bubble? – Don Quijones
30 maart
The British government has suddenly realized that the London property market is “becoming” a “destination of choice” for laundering the proceeds of overseas crime and corruption. And it has done what it always tends to do in delicate situations: it has called an inquiry into the matter.
“Given the threats that face the UK, the effectiveness of the regimes that we use to protect our financial system from misuse have never been more important,” said Member of Parliament Nicky Morgan, Chair of the Treasury Committee. “As part of our inquiry, the Treasury Committee will examine the UK’s role in international efforts to tackle money laundering and terrorist financing and implement sanctions.”
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In Unprecedented Move, China Plans To Pay For Oil Imports With Yuan Instead Of Dollars – Tyler Durden
31 maart
Just days after Beijing officially launched Yuan-denominated crude oil futures (with a bang, as shown in the chart below, surpassing Brent trading volume) which are expected to quickly become the third global price benchmark along Brent and WTI, China took the next major step in the challenging the Dollar’s supremacy as global reserve currency (and internationalizing the Yuan) when on Thursday Reuters reported that China took the first steps to paying for crude oil imports in its own currency instead of the US Dollars.
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***China’s Plan to End Dependency on American Trade – Alasdair Macleod
26 maart
The timing of America’s announcement on new tariffs is circumstantially connected with China. In an announcement of enormous importance, a date has finally been set for trading in oil futures denominated in yuan. China’s suppliers of roughly 8.5 million barrels of oil per day are agreeing to take yuan for their oil, not dollars, and the new futures contract allows them to hedge the yuan into dollars, euros, yen, or even gold.
The threat from China’s move is to the petrodollar’s status, and therefore the near-monopoly the dollar enjoys in international trade. It also allows oil suppliers to hedge into gold through matching yuan-gold futures in Hong Kong and Dubai, which are physically deliverable. These two exchanges, in consultation with Singapore and others in Asia, are setting up a gold corridor with vaulting facilities with a 1500-ton capacity in a free-trade zone in Qianhai on the Chinese mainland. This move is almost certainly connected with anticipated physical demand for gold arising from the new oil futures contract.
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What Could Dethrone the Dollar as Top Reserve Currency? – Wolf Richter
30 maart
Central banks seem leery about the Chinese yuan.
What will finally pull the rug out from under the dollar’s hegemony? The euro? The Chinese yuan? Cryptocurrencies? The Greek drachma? Whatever it will be, and however fervently the death-of-the-dollar folks might wish for it, it’s not happening at the moment, according to the most recent data.
The IMF just released its report, Currency Composition of Official Foreign Exchange Reserves (COFER), for the fourth quarter 2017. It should be said that the IMF is very economical with what it discloses. The COFER data for the individual countries – the total level of their reserve currencies and what currencies they hold – is “strictly confidential.” But we get to look at the global allocation by currency.
In Q4 2017, total global foreign exchange reserves, including all currencies, rose 6.6% year-over-year, or by $709 billion, to $11.42 trillion, right in the range of the past three years (from $10.7 trillion in Q4 2016 to $11.8 trillion in Q3, 2014). For reporting purposes, the IMF converts all currency balances into dollars.
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The stubbornly high cost of remittances – Stephen Cecchetti, Kim Schoenholtz
27 maart
Despite recent technological advances, the costs for migrants to send money across borders to their families remain extremely expensive, with fees often surpassing 5%. This column explores the various factors shaping remittance prices and identifies two key avenues for cost reduction: consumer education and competition. In particular, expanding mobile technology is helping to displace banks and squeeze remittance costs.
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The Difference Between Good Globalism and Bad Globalism – Ryan McMaken
28 maart
“Globalism” and “globalization,” are terms that suffer from a lack of any precise definition. The terms are used freely by a wide variety of commentators to mean both good and bad things — many of which are opposites of each other. Sometimes globalism means lowering trade barriers. Other times it means aggressive foreign policy through international organizations like NATO. Other times it means supporting a global bureaucracy like the United Nations.
This lack of precision was recently featured in The New York Times with Bret Stephens’s column “In Praise of Globalists.” Stephens however, also fails to make any serious attempt at defining globalism. He feigns an attempt to define globalism, but in the end, it turns out the column is just a means of making fun of Trump voters and rubes who don’t subscribe to Stephens’s allegedly cosmopolitan views.
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Bank Enthusiasm for Blockchain Waning – Yves Smith
29 maart
Sometimes I should have more courage in my convictions.
A bit over a year ago, I had some energetic discussions with a lawyer who is a top pro in her area of expertise but sometimes overestimates her knowledge of related areas. She’d just been at a conference where she had run into someone at one of the TBTFs who was in charge of blockchain, specifically, of bringing it to that bank’s phone banking app.
I proceeded to describe why that didn’t make any sense, and without going into details, Clive confirmed my reflexes and added some reasons of his own. My friend was very insistent, despite my explaining the frequency of banks setting up serious-looking little or even not so little initiatives that are sure to go nowhere in response to some fad or consultant hype. This phenomenon was so well known that at one bank, they called it “The Hall of Hollow Mandates.”
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A Debt Crisis is on the Horizon (pdf) – Michael J. Boskin, John H. Cochrane, John F. Cogan, George P. Shultz and John B. Taylor
27 maart
We live in a time of extraordinary promise. Breakthroughs in artificial intelligence, 3D manufacturing, medical science and other areas have the potential to dramatically raise living standards in coming decades. But a major obstacle stands squarely in the way of this promise: high and sharply rising government debt.
President Trump’s recently released budget is a wake-up call. It projects that this year, a year of relatively strong economic growth, low unemployment and continued historically low interest rates, the deficit will reach $870 billion, 30 percent greater than last year.
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Lobbying and the efficiency of bank sales – Deniz Igan, Thomas Lambert, Wolf Wagner, Eden Quxian Zhang
28 maart
When failed banks are sold, a would-be acquiring bank is more likely to win the auction if it spends money on lobbying. This column argues, however, that these acquirers are less effective at improving efficiency afterwards. This implies that lobbying has a double cost: it distorts the efficient allocation of failed banks, and it amplifies agency problems at the acquiring banks. Resolution frameworks will need strong accountability mechanisms and transparency to reduce this cost.
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Economic Policy Matters: The Example of Botswana vs. South Africa vs. Zimbabwe – Daniel J. Mitchell
30 maart
What’s the best argument against statism?
As a libertarian, my answer is that freedom is preferable to coercion. Freedom also ranks higher than prosperity. For instance, the government might be able to boost economic output by requiring people to work seven days a week, but such a policy would be odious and indefensible.
As an economist, I have a more utilitarian perspective. The best argument against statism is that it simply doesn’t work. Nations with bigger government and more intervention routinely under-perform compared to otherwise-similar countries with small government and free markets.
That’s why I often present my leftist friends with my two-question challenge. I ask them to name a country, anywhere on the planet and at any point in history, that either become rich with statist policies or has experienced superior levels of growth with statist policies.
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***What If All the Cheap Stuff Goes Away? – Charles Hugh Smith
30 maart
Nothing stays the same in dynamic systems, and it’s inevitable that the current glut of low costs / cheap stuff will give way to scarcities that cannot be filled at current low prices. (..)
global weather has been conducive to record harvests of grains and other foodstuffs, and I wonder what will happen when this run of good fortune ends, something history tells us is inevitable. Despite the slow erosion of inflation, food is remarkably cheap in the developed world.
What happens should immoderate weather strike major grain-growing regions of the world?
Then there’s infectious diseases. Global air travel and trade has expanded the spectrum of disease vectors to levels that give experts pause. The potential for an infectious disease that can’t be mitigated to spread globally is another seriously under-appreciated threat to trade, tourism and cheap stuff in general.
There are other factors that could spell the end of cheap stuff, not just food but manufactured goods:
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Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.

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