Economische aanraders 06-12-2015
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 eerste (twee) alinea’s hier gegeven zijn. Aangezien Engels de taal van het economisch verkeer is, ontkomen we er niet aan vrijwel alleen artikelen in die taal op te nemen.
Met ingang van dit weekend nemen we ook een paar extra links op naar artikelen die ook minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.
***Thirty Years of Silver Supply Deficits – Jeff Nielsen
In a recent announcement from the media “consultants” who provide us with most of our official data for precious metals markets, we were told that the silver market just experienced a supply deficit for “the 3rdconsecutive year.” However, as recently pointed out by another noted silver commentator, Steve St. Angelo, the same consultants have produced data showing that the silver market has been in a supply deficit for twelve consecutive years – four times as long as what they just finished publicly claiming.
*** Since January The US Has Added 294,000 Waiters & Bartenders, And Zero Manufacturing Workers _ Tyler Durden
Here is one of the reasons why the Fed is confident the US economy is strong and resilient enough to sustain a rate hike: since January, the US has added 293,900 waiter & bartender positions and zero manufacturing workers.
Unless one is an economist, no further commentary is needed.
Keynes Is Dead (and We Are All “In The Long Run” Now) – Bill Bonner, annotated by Pater Tenebrarum
Fools or Knaves?
[ed. note: this article was written shortly before the ECB decision was announced, so the deposit facility rate mentioned in it is still the old one; it has been reduced to – 30 bps in the meantime]
BALTIMORE – Thursday is the big day. Mario “whatever it takes” Draghi is expected to goose up stock markets with more stimulus measures. On the table is more QE… and further cuts to the key lending rate.
Weekend Reading: Market Forecasting – Lance Roberts
As we enter the final month of the year, stocks (as measured by the S&P 500) have made little progress for the year. Unfortunately, many hedge and mutual funds are lagging well behind on a year-to-date basis which is putting pressure on them to chase performance.
With the Federal Reserve now set to tighten monetary policy for the first time in a decade, while every other country in the world is in a race to negative rates, the risk to investors has risen markedly. This is particularly the case given the downward pressures on economic growth from low oil prices, a surging dollar and weak consumption trends.
The 10th Man: How Bull Markets End – Jared Dillian
Many people think that they ring a bell at the top of a bull market. Ding-a-ling-a-ling.
That is indeed often the case. The bell was rung in 2000 at the top of the dot-com bubble—I like to think it was 3Com spinning off Palm that broke its back.
But sometimes there is no bell, no catalyst, no story to tell. A bull market becomes a bear market, and it happens just like that.
How Money Disappears in a Fractional-Reserve Money System – Frank Shostak
Most experts are of the view that the massive monetary pumping by the US central bank during the 2008 financial crisis saved the US and the world from another Great Depression. On this the Federal Reserve Chairman at the time Ben Bernanke is considered the man that saved the world. Bernanke in turn attributes his actions to the writings of Professor Milton Friedman who blamed the Federal Reserve for causing the Great Depression of 1930s by allowing the money supply to plunge by over 30 percent.
Careful analysis will however show that it is not a collapse in the money stock that sets in motion an economic slump as such, but rather the prior monetary pumping that undermines the pool of real funding that leads to an economic depression.
German wage moderation and the EZ Crisis – Peter Bofinger
The EZ ‘consensus narrative’ argues the Crisis should not be thought of as a government debt crisis in its origin. Instead it regards large intra-EZ capital flows that emerged in the decade before the Crisis as the real culprit. This column argues that while the narrative is correct, it is also incomplete. With its focus on the deficit countries, it neglects the role of Germany, by far the largest member state, and its contribution to the imbalances in the years preceding the Crisis. A narrative that does not account for the effects of the German wage moderation is incomplete.
The Problem With “Rules-Based” Monetary Policy – Tommy Behnke
The phrase “rules-based monetary policy” has frequented conservative circles a lot lately. Republican presidential candidate Ted Cruz expressed his deep passion for implementing a monetary policy rule in a handful of presidential debates this year, including both October’s and November’s debates. House Republicans have introduced bills that would require the Federal Reserve to follow a “rule.” Even the conservative intellectual class has waved its flag of approval for these efforts. In February, the Heritage Foundation remarked that a monetary policy rule will “greatly improve transparency and predictability,” a conviction echoed loudly and frequently at the November monetary policy conference hosted by the Cato Institute.
Can the US Dollar Face Down the Chinese Yuan? – James G. Rickards
Membership in the exclusive SDR currency club has changed only once in the past thirty years.
That change took place in 1999, and was purely technical due to the fact that the German mark and French franc were being replaced by the euro.
Leaving aside this technical change, the SDR has been dominated by the “Big Four” (US, UK, Japan, and Europe) since the IMF abandoned the gold SDR in 1973. This is why inclusion of the Chinese yuan is so momentous.
Toxic Mix Hits Trucking, Orders for New Trucks Totally Collapse, Pummel Manufacturers – Wolf Richter
When diesel-engine maker Cummins announced its third-quarter earnings debacle on October 28, chief operating officer Rich Freeland had a special word about future production and sales of heavy trucks: “It’s evident now that retail sales [of trucks] and production will be down going forward.”
He wasn’t kidding. But it’s a lot worse than imagined at the time.
There Better Be a Miracle for Retailers – Wolf Richter
They tried to spin it in the most favorable light, and even then it was ugly.
It’s early in the shopping season, and Americans might still come out and head to the mall in massive numbers and do their patriotic duty and buy things that ideally no one needs made in countries they don’t know with money they don’t have to prop up manufactures, middlemen, transportation companies, oil companies, the entire supply chain, and finally US retailers that have hired hundreds of thousands of part-timers just for this sacred period of the year.
The hope is that these consumers will get their act together to relieve the enormous pressures that have built up behind the scenes: ballooning inventories. But it doesn’t look like it.
Dollar-Denominated Corporate Time Bomb Set to Blow – Don Quijones
Emerging economies around the world are already feeling the first pangs of withdrawal as fast yield-chasing investors send their funds back to the U.S. in anticipation of higher Treasury yields and a further appreciating dollar.
In Mexico, the central bank has just published its balance of payments data for the third quarter, 2015. The results do not make for pretty reading.
New studies: do ‘competitive’ corporate tax cuts boost growth?
Recently Prof. Matthew Watson wrote an article for us entitled The Anti-Growth Dynamics of the Competitiveness Agenda, in which he outlined generic reasons, both from a supply side and a demand side, where supposedly ‘competitive’ policies on wages and in other areas are likely to depress economic growth.
Now a new study from the Canadian Center for Policy Alternatives (CCPA) complements this and notes something more specific that we’ve remarked on previously: that ‘competitive’ corporate tax cuts are likely to be equivalent to pushing on a string. They will tend to feed corporate cash hoarding (what Mark Carney has called ‘dead money’) instead of business investment – while sucking revenue and investment and spending power out of the government sector, depressing demand and investment. The likely result is slower growth.
How does this stack up, from an empirical perspective? Well a new blog from the Tax Justice Network constitutes good supporting evidence for the proposition that ‘competitive’ corporate tax cuts depress growth.
German Financialization and the Eurozone Crisis – Nina Eichacker
Many studies of the Eurozone crisis focus on peripheral European states’ current account deficits, or German neo-mercantilist policies that promoted export surpluses. However, German financialization and input on the eurozone’s financial architecture promoted deficits, increased systemic risk, and facilitated the onset of Europe’s subsequent crises.
Increasing German financial sector competition encouraged German banks’ increasing securitization and participation in global capital markets. Regional liberalization created new marketplaces for German finance and increased crisis risk as current accounts diverged between Europe’s core and periphery. After the global financial crisis of 2008, German losses on international securitized assets prompted retrenchment of lending, paving the way for the eurozone’s sovereign debt crisis. Rethinking how financial liberalization facilitated German and European financial crises may prevent the eurozone from repeating these performances in the future.
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.