Economische aanraders 29-08-2015
Veren of Lood biedt u op zondag wekelijks een inkijkje in belangrijke of informatieve artikelen en interviews die de voorafgaande 7 dagen op economisch terrein verschenen.
De kop is de link naar het oorspronkelijke artikel, waarvan de eerste (twee) alinea’s hier gegeven zijn.
Dr. Joe Salerno (Mises Institute): Crashes are the Cure, not the Problem
We’re Seeing the Beginning of a Liquidity Crisis” in the Startup Boom, SuddenlyStock markets have been volatile recently, plunging and soaring alternately on vertiginous slopes, sometimes the same day, and now folks that supply the juice to the startup ecosystem – VCs, pension funds, mutual funds, hedge funds even – are getting nervous.
They need to know where this market is going. They need to know if they can exit at a big profit, or if their investment and hopes will get dragged down with these startups when it all falls apart.
Money Supply and the Velocity of MoneyThe Mainstream View of Money Velocity
According to popular thinking the idea of velocity is straightforward. It is held that over any interval of time, such as a year, a given amount of money can be used again and again to finance people’s purchases of goods and services. The money one person spends for goods and services at any given moment can be used later by the recipient of that money to purchase yet other goods and services.
Last weekend, we explained why it really all comes down to the death of the petrodollar.
China’s transition to a new currency regime was supposed to represent a move towards a greater role for the market in determining the exchange rate for the yuan. That’s not exactly what happened. As BNP’s Mole Hau hilariously described it last week, “whereas the daily fix was previously used to fix the spot rate, the PBoC now seemingly fixes the spot rate to determine the daily fix, [thus] the role of the market in determining the exchange rate has, if anything, been reduced in the short term.” Of course a reduced role for the market means a greater role for the PBoC and that, in turn, means FX reserve liquidation or, more simply, the sale of US Treasurys on a massive scale.
Speaking at the Economic Policy Symposium hosted by the Federal Reserve Bank of Kansas City, in Jackson Hole, Wyoming, today, Mark Carney acknowledged that the dramatic decline in Chinese stocks had sparked volatility in Western markets but claimed that it would not knock his economic plans off course.
Yves here. This post describes how the recognition among the super-rich that it might behoove them to share more with the peons is entirely about their self-interest, and even then, rather narrowly conceived. It still seems astonishing that what passes for our elites today seem unable to grasp that the risks of widening income disparity are bigger than they conceive. It’s not just the threat of violence. For instance, poor and lower income populations with inadequate access to health services are a breeding ground for public health disasters. Moreover, public health studies have repeatedly found that highly stratified societies produce shorter lifespans, even for among the top echelon.
Disclaimer: De 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.