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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Nomi Prins: The Fed Will Not Give Up “Dark Money” – Nomi Prins
24 augustus
When it comes to second quarter U.S. economic growth figures, interpretation is everything.
On one hand, the projection of 4.1% second quarter growth is a sign of a surging economy set to grow for years to come.
But on the other hand, it is seen as temporary sugar rush created by tax cuts and debt. It’s unsustainable in the light of higher tariffs, an escalating trade war that could impact large portions of the economy, and rising federal deficits that put America even deeper in debt.
Another data point to determine which of these two camps is most accurate for predicting the future of the U.S. economy is job’s figures. July’s jobs report came in with fewer than expected jobs, a gain of 157,000 jobs vs. a forecast of 190,000.
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Fed Staff Delivers Intellectual Ammo for Hawkish Approach to Inflation – Wolf Richter
26 augustus
“Because monetary policy acts with a lag, waiting for inflation to materialize before reacting is undesirable, particularly when economic conditions are such that outsized deviations of inflation from its target are a plausible outcome.”
Let’s break the above quote apart and put it in perspective:
Waiting with rate hikes until inflation materializes is undesirable.
This is particularly true today after years of global QE and zero-interest-rate policy, when “outsized deviations of inflation” – such as a sudden and hard-to-control surge – “are a plausible outcome.”
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Why Do People Assign Value to Paper Money? – Frank Shostak
23 augustus
Demand for a good arises because of its perceived benefit. For instance, people demand food because of the nourishment it offers them. This is however not so, with regard to the pieces of paper we call money — why do we accept them?
Following the view of Plato and Aristotle, economists regard the acceptance of money as an historical fact introduced by the government decree.1 It is government decree, so it is argued, that makes a particular thing accepted as the general medium of the exchange, i.e., money.
In his writings, Carl Menger raised doubts about the soundness of the view that the origin of money is a government proclamation.
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***“Big Trade Agreement Could Be Happening Soon”: US, Mexico On Verge Of Resolving Key Nafta Negotiation Hurdles – Tyler Durden
25 augustus
On Saturday morning, in addition to his latest attack on Jeff Sessions, Hillary Clinton and the DOJ, Donald Trump had some unexpectedly kind words for the southern US neighbor on whose border the president has been eager to build a big wall: “Our relationship with Mexico is getting closer by the hour,” tweeted President Trump as negotiators continued their work. “A big Trade Agreement with Mexico could be happening soon!”
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China: Why We Should Be Even More Worried Now – Daniel Lacalle
23 augustus 2018
I find it amusing to read some analysts stating that the Chinese government’s stealth yuan devaluation has offset the impact of tariffs.
A 10% tariff hurts a small part of the economy. However, a 10% devaluation hurts all Chinese citizens equally and massively.
The yuan devaluation is not a tool for exports. Devaluations are a form of price control and a disguised reduction of salaries. As such, they hurt more than what they aim to protect.
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***Is the Sharing Economy Exploitative? – Per Bylund
24 augustus
There’s a whole lot of buzz about the sharing economy. Many seem to think it is something new, with some calling for a ‘new economics’ to explain it while others deride the ‘gig economy’ as a higher level of exploitation, inequality, and poverty. Neither is a good analysis.
First things first: the sharing economy was facilitated by advances in technology alongside consumer preferences changing from goods to services and thus from ownership to lease. These are not separate processes, but mutually constituting changes where each increases the other.
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Petro-Yuan Not Quite Yet: Chinese Oil Futures a Risky Endeavor – Irina Slav
21 augustus
When the long-awaited yuan-denominated oil futures launched earlier this year, opinions were split: one camp argued with passion that the days of the petrodollar were numbered, its demise a certainty. The other camp argued with just as much passion the yuan has yet to catch up with the dollar as an international currency, and the Chinese futures had basically as much of a chance as a snowflake in hell.
Six months later, opinions remain split, but now the two camps have some facts and figures in their arsenal. For example, a figure for the pro-petroyuan camp was the record surge in trading volume in June, to 137.5 million tons of crude for delivery in September. This translates into 137,503 lots, compared to a combined 2.6 million lots for Brent and WTI together, though, so the yuan contract still has a way to go to catch up.
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How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year? – Charles Hugh Smith
24 augustus
These charts reflect a linear system that is wobbling into the first stages of non-linear destabilization.
The widespread presumption is the U.S. is wealthy beyond words, and will remain so as far as the eye can see: wealthy enough to fund trillion-dollar weapons systems, trillion-dollar endless wars, multi-trillion dollar Medicare for all, multi-trillion dollar Universal Basic Income, and so on, in an endless profusion of endless trillions.
Just as a thought experiment, let’s ask: how “wealthy” would we be if we stopped borrowing trillions of dollars every year? Or put another way, how “wealthy” would we be if the rest of the world stops buying our trillions in newly issued bonds, mortgages, auto loans, etc.?
The verboten reality is our “wealth” is nothing but a sand castle of debt. Take away more borrowing and the castle melts away. I’ve gathered a selection of charts that show just how dependent we are on massive debt expansion that continues essentially forever, as any pause in debt expansion will collapse the entire system.
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When will the Corporate-Debt Bubble Burst? – Brendan Brown
24 augustus
Optical illusion in the form of a focus on flows — rather than stocks — is a well-known flaw in the analysis of asset markets. Two examples this year demonstrate the phenomenon: one from the market for gold and the other from the market in stock options. Analysis of the illusion in gold helps provide a clue to how present high speculative temperatures in corporate bond markets — intimately related to the options market — will collapse.
Taking gold first, the World Gold Council (WGC) pronounces in its latest quarterly report (August 2018) that demand for gold has fallen by around 2 per cent to just below 1000 metric tons. By implication, this ties in with the decline in the dollar price of the yellow metal. The message is also consistent with the market narrative which spells out how new demand is concentrated in emerging market economies, especially China and India, and the sharp slowdowns there together with currency depreciation justifies a serious price fall (in US dollars).
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Macroeconomic beliefs and firm performance – Mari Tanaka, Nicholas Bloom, Joel David, Maiko Koga
25 Augustus
What is the effect of firms’ beliefs on their decisions and performance? This column explores this link using a unique survey of Japanese firms’ quantitative forecasts of future GDP growth combined with detailed company accounting data for over 1,000 large Japanese firms over 25 years. Firms’ input decisions and subsequent profit and productivity are found to react strongly to expectations of macroeconomic conditions, while significant heterogeneity in forecast accuracy across firms appears to be related to observable characteristics such as productivity, size, age, and governance structure. The results highlight a key role of firms’ forecasting ability for micro and macro performance.
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Subprime Begins to Haunt Credit Card Balances – Wolf Richter
21 augustus
Delinquencies soar past Financial-Crisis peak at the ca. 5,000 smaller US banks, and these are the Good Times. What’s going on?
The delinquency rate on credit-card loan balances at commercial banks other than the largest 100 – so at the nearly 5,000 smaller banks in the US – rose to 6.2% in the second quarter. This exceeds the peak during the Financial Crisis by a full percentage point and was up from 4.0% a year ago.
But for the largest 100 banks – which carry the majority of the credit-card loan balances – the delinquency rate was 2.4% (seasonally adjusted), the Federal Reserve Board of Governors reported Tuesday afternoon. So what is going on here?
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The Philanthropic Ogre – Gerardo Enrique Garibay Camarena
20 augustus
Recently, the Trump administration announced it would seek some $12 billion in subsidies to support the farmers hurt by the tariffs set by foreign countries as a consequence of the ongoing trade wars with China, the EU, and Canada, which, it seems, are not that ‘good, and easy to win’ after all.
At first glance, it may look like a good idea; many might think it makes sense to seemingly come forward to help those who are suffering and lend them a hand to get back on their feet. However, behind those subsidies are a worrisome sign of the ever-larger Ogre in Washington.
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Free trade between the EU and US: A match made in heaven – Hylke Vandenbussche, William Connell, Wouter Simons
24 Augustus
While talks of a preferential agreement between the US and EU were put aside when President Trump came in office, the presidents of the two trading partners have recently expressed a new desire to aim for zero tariffs and non-tariff measures between them. This column estimates the gains from such a deal, taking into account global value chains and input-output linkages in production. It finds that free trade would substantially benefit both the EU and the US, and these gains would result from the reduction in non-tariff barriers rather than tariffs.
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***Flattening Yield Curve in One Picture – Mike Shedlock
25 augustus
The flattening yield curve is a topic of much discussion. The lead chart shows various spreads it in one picture.
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Price and wage-setting in advanced economies: Selected takeaways from the ECB’s Sintra Forum – Philipp Hartmann, Peter McAdam
22 Augustus
The origins and implications of the low inflation dynamics that characterised the post-crisis recoveries in many advanced economies were at the heart of the ECB’s 2018 Sintra Forum on Central Banking. In this column, two of the organisers highlight some of the main points from the discussions, including why measured economic slack did not translate into more vivid price and wage growth, which role inflation expectations play in the conduct of monetary policy, as well as where the challenges lie in reconciling changes in micro price-setting with aggregate inflation dynamics.
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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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