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.

——————————————————————————————————
An unusual recovery: Charting the way forward for European policymakers – Marco Buti, José Leandro, Katia Berti
12 mei
As the recovery in the Eurozone approaches its fifth year, this column presents the latest economic forecast from the European Commission, which projects a continuation of the recovery at a steady pace (1.7% in 2017 and 1.8% in 2018). Nevertheless, over the next two years, wage growth is expected to remain constrained, the investment gap is expected to persist, the current account surplus is forecast to remain high, and core inflation to stay subdued. This suggests that there is still scope for higher growth without triggering inflationary pressures, and the Spring forecast shows that maintaining the current supportive macroeconomic policy environment is the right approach, while implementing comprehensive and productivity-enhancing structural reforms. The main immediate priority should be cleaning up the banking sector.
——————————————————————————————————
Consumers Slash Spending Growth Expectations – Wolf Richter
8 mei
Something embarrassing is happening to the wallet.
Consumer spending – not just retail but also healthcare, housing, tuition, and so on – accounts for 69% of the US economy. Decent economic growth without growth in consumer spending is practically impossible. That’s why everyone is watching consumers. And everyone is praying that they’ll spend.
They’ll have to spend above the rate of inflation for “real” growth (adjusted for inflation) to happen. But that might not be happening over the next 12 months, according to the selfsame consumers.
——————————————————————————————————
There Is One Way Out of Debt-Serfdom: Fanatic Frugality – Charles Hugh Smith
4 mei
Debt is serfdom, capital in all its forms is freedom.
If we accept that our financial system is nothing but a wealth-transfer mechanism from the productive elements of our economy to parasitic, neofeudal rentier-cartels and self-serving state fiefdoms, that raises a question: what do we do about it?
The typical answer seems to be: deny it, ignore it, get distracted by carefully choreographed culture wars or shrug fatalistically and put one’s shoulder to the debt-serf grindstone.
——————————————————————————————————
Trump’s Budget Explosion Will Bring Dire Monetary Shocks – Brendan Brown
12 mei
The monetary consequences of the looming largely unfunded mega tax-cutting package will almost certainly trump all others. Its advocates make vital comparisons with the Reagan era. But they omit the key fact that fiscal shock then occurred within a rare episode of “hard money.” Paul Volcker, nominated as Fed Chief by President Carter in late 1978, was applying monetarist medicine to usher the US economy into a new era beyond the “Greatest Peacetime Inflation.” Even though the Volcker stabilization turned out to be deeply flawed and of short duration, its high tide coincided with the Reagan budget deficit explosion, holding in check any immediate build-up of inflation (in either of its two forms — goods inflation or asset inflation).
——————————————————————————————————
***It’s Really Crazy What This ECB Has Wrought – Wolf Richter
14 mei
In the land of NIRP refugees and “Reverse Yankees,” who will get crushed?
At the end of the week, something special happened, something totally absurd but part of the new normal: the average yield of euro-denominated junk bonds – the riskiest, non-investment-grade corporate bonds – dropped to the lowest level ever: 2.77%.
April 26 had marked another propitious date in the annals of the ECB’s negative yield absurdity: the average euro-denominated junk bond yield had dropped below 3% for the first time ever.
By comparison, what is considered the most liquid and save debt, the 10-year US Treasury, carries a yield of 2.33%; the 30-year Treasury yield hovers at 3%.
This chart of the BofA Merrill Lynch Euro High Yield Index, retrieved from FRED, St. Louis Fed, shows just how crazy this has gotten in the Eurozone:
——————————————————————————————————
***The role of social security wealth in international comparisons of household wealth: A head-to-head comparison of augmented wealth in Germany and the US – Timm Boenke, Markus M. Grabka, Carsten Schroeder, Edward Wolff
10 mei
International comparisons of private household wealth place the US among the richest countries, whereas German households appear rather poor. This column argues that as these rankings are based on average household net wealth, they do not tell the whole story. An augmented wealth approach that adds social security wealth to net wealth reduces wealth inequalities in both countries and the wealth gap between the two.
——————————————————————————————————
The Essential Link Between Consumers and Financial Markets – Frank Shostak
10 mei
Recently one of the most successful Wall Street investors Warren Buffet urged investors to forget about active investment and simply put their money into index funds.
Contrary to his previous ideas that one should strive to make investment decisions based on the understanding of fundamentals, now he is of the view that it is better to embrace a passive approach and follow the index.
It seems that Buffet has succumbed to the popular view as presented by Modern Portfolio Theory (MPT) that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous.
——————————————————————————————————
Charles Evans: The Risk of Deflation – C.Jay Engel
12 mei
Chicago Fed President Charles Evans spoke on Friday, expressing his fear that there was risk to the downside on the inflation outlook. These people! Unlike the Austrians, who define inflation and deflation in terms of the supply of money and fiduciary media, the mainstream defines them in terms prices. Thus, when Evans and others like him consider there being risk of too low inflation, what they are saying us that they fear the cost of living either falling or not rising fast enough (2% annually). No wonder the average person can’t stand the pompous “let them eat cake” attitude of the global bureaucrats. Who except an overpaid government academician would praise rising price levels?
——————————————————————————————————
Jobless recoveries: Exploring technology’s role – Georg Graetz, Guy Michaels
13 mei
Recoveries from recessions in the US used to involve rapid job generation, but job growth has failed to match GDP recovery after recent US recessions. This column examines the role of technology in this and asks whether jobless recoveries are a wider problem outside of the US. In the US, industries that are more prone to technological change experienced slower job growth during recent recoveries, but it appears unlikely that modern technologies are causing jobless recoveries outside of the US. This poses a puzzle as to the nature of recent jobless US recoveries.
——————————————————————————————————
Growing Inequality Under Global Capitalism – Jomo Kwame Sundaram
6 mei
Income and wealth inequality has increased in recent decades, but recognition of the role of economic liberalization and globalization in exacerbating inequality has never been so widespread. The guardians of global capitalism are nervous, yet little has been done to check, let alone reverse the underlying forces.
Global Elite Alarmed by Growing Inequality
The World Economic Forum (WEF) has described severe income inequality as the biggest risk facing the world. WEF founder Klaus Schwab has observed, “We have too large a disparity in the world; we need more inclusiveness… If we continue to have un-inclusive growth and we continue with the unemployment situation, particularly youth unemployment, our global society is not sustainable.”
——————————————————————————————————
“Canada Hasn’t Seen A Bank Run Such As This In Decades” – Finance Minister Says Home Capital Bailout Is Possible – Tyler Durden
13 mei
When we first said three weeks ago that the spectacular, sudden implosion of Canada’s largest alt-lender Home Capital Group or HCG – whose fate we had followed closely since 2015 – was Canada’s own “New Century Moment”, the parallels were more than just the obvious: like in the US, it took the market nearly a year to realize the full implications of the subprime collapse which first manifested in the failure of New Century and its subprime lender peers. When all was said and done, the world’s central banks had to pump (and still do) trillions into the financial system to stop it from disintegrating.
Slowly but surely, Canada is starting to appreciate just how serious the Home Capital failure is, and how the unprecedented bank run that has led to 94% of retail deposits fleeing the troubled lender…
——————————————————————————————————
In Bleak Prognosis, Italy’s Financial Regulator Threatens EU with Return to a “National Currency” – Don Quijones
10 mei
Because Italy’s banking crisis and other problems have not been solved.
Nerves are fraying in the corridors of power of the Eurozone’s third largest economy, Italy. It’s in the grip of a full-blown banking meltdown that has the potential to rip asunder the tenuous threads keeping the European project together.
In his annual speech to the financial market, Giuseppe Vegas, the president of stock-market regulator CONSOB — a consummate insider — delivered a bleak prognosis. The ECB’s quantitative easing program has “reduced the pressure on countries, such as ours, which more than others needed to recover ground on competitiveness, stability and convergence.”
——————————————————————————————————
The effect of regional trade agreements on growth volatility – Kangni Kpodar, Patrick Imam
8 mei
The debate over regional trade agreements is ongoing. It has been argued that they can heighten exposure to shocks as they lead to more specialisation, and conversely that they can alleviate volatility by improving policy coordination within the anchors of a formal trade contract. This column suggests that the benefits from lowering long-term growth volatility tend to dominate potential costs, with the magnitude of this effect depending on the depth of the regional integration and the development stage of trade partners.
——————————————————————————————————
***Listen to Dead Economists – Jeff Deist
10 mei
The late economist Friedrich Hayek, celebrated earlier this week on the anniversary of his birthday, left an enduring body of work and a place in history as the reluctant winner of a Nobel Prize he thought suited only to the physical sciences.

But exactly how enduring his work and his legacy will remain is an important question, and not just for Hayek. The mood in the West is not friendly to intellectuals, much less dead intellectuals. We prefer social media and short videos to books and lectures. We want someone else to provide easily-digestible ideas, concepts, and news, rather than seeking original sources for ourselves. We don’t have time for context or nuance. With limited knowledge of history, we tend to fetishize new over old, modernity over tradition, and data over theory. In our hubris, we imagine ourselves in a new era where old knowledge and wisdom no longer apply.
——————————————————————————————————

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.