Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral 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. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks 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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If the US Adopts Eurozone Policies, the Jobs Recovery Will Suffer – Daniel Lacalle
28 september
The employment recovery in the United States is as impressive as the collapse due to the lockdowns.
In April I wrote a column stating that “The U.S. Labor Market Can Heal Quickly,” and the improvement has been positive. Very few would have expected the unemployment rate to be at 8.4 percent in August after soaring to almost 15 percent in the middle of the pandemic. This means that the unemployment rate is in August 2020 lower than what analysts projected for the end of 2020. Even the measure of underemployment (U-6) has fallen from 22.8 percent to 14.2 percent.
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Monetary capacity – Roberto Bonfatti, Adam Brzezinski, K. Kıvanç Karaman, Nuno Palma
27 September
Monetary capacity refers to a state’s capacity to circulate money that is accepted by the public, while fiscal capacity refers to its capacity to tax. This column argues that monetary and fiscal capacity and, by extension, markets and states have a symbiotic relationship. The long-run European evidence from antiquity to the modern period corroborates this mutual dependence, with money stocks and tax revenues moving in close synch. History also offers a natural experiment to estimate the causal effect of monetary capacity on fiscal capacity, with New World silver increasing money stocks and in turn tax revenues in a significant and substantial way.
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The Emerging Evidence Of Hyperinflation – nAlasdair Macleod
1 oktober
Note: all references to inflation are of the quantity of money and not to the effect on prices unless otherwise indicated.
In last week’s article I showed why empirical evidence of fiat money collapses are relevant to monetary conditions today.
In this article I explain why the purchasing power of the dollar is hostage to foreign sellers, and that if the Fed continues with current monetary policies the dollar will follow the same fate as John Law’s livre in 1720. As always in these situations, there is little public understanding of money and the realisation that monetary policy is designed to tax people for the benefit of their government will come as an unpleasant shock. The speed at which state money then collapses in its utility will be swift. This article concentrates on the US dollar, central to other fiat currencies, and where the monetary and financial imbalances are greatest.
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***The Urban Exodus and How Greatness Goes Bankrupt – CHarles Hugh Smith
30 September 2020
The best-case scenario is those who love their “great city” will accept the daunting reality that even greatness can go bankrupt.
Two recent essays pin each end of the “urban exodus” spectrum. James Altucher’s sensationalized NYC Is Dead Forever, Here’s Why focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive an accelerating urban exodus over the long-term,.
Jerry Seinfeld’s sharp rebuttal, So You Think New York Is ‘Dead’, focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.
The core issue neither writer addresses is the financial viability of high-cost, high-tax urban centers.
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Hoppe’s Localist, Decentralist Strategy Is Working in Brazil – Raphaël Lima
30 september
The last four years of political activism in the libertarian movement in Brazil confirm Hoppe’s thesis in his “What Must Be Done” and may serve as a lesson to libertarians worldwide. As we gear up for the US elections, and for local elections in Brazil, it is important to make those lessons explicit, to better understand how to use elections and how effectively they can be used to protect private property—what Hoppe calls the defensive use of democracy.
The first lesson is about principles: in selecting candidates to support, it needs to be considered a must that a candidate defend freedom, private property, and the right to associate and not associate as core values, and not as good general economic proposals.
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What Does the Fed See Heading at Big Banks? Blocks Share-Buybacks, Slaps on Dividend Caps Due to “Economic Uncertainty” and “Cushion Against Loan Losses” – Wolf Richter
30 september
My Big-Four Bank Index already got crushed back to 2004 level.
After the stock market closed today, the Federal Reserve announced that “in light of the economic uncertainty,” and to provide “a cushion against loan losses,” and to support lending, it would extend for another quarter, so through December 31, the blanket prohibition on share buybacks by large banks (banks with over $100 billion in assets). For the same reasons, it would also cap dividend payments tied to a formula based on recent income.
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The Eurosystem: An accident waiting to happen – Willem Buiter
1 Oktober
National central banks within the Eurosystem with substantial holdings of own risky sovereign debt are at material risk of default if their sovereign defaults, since the likelihood of recapitalisation of an insolvent national central bank by its defaulted sovereign is low. Risk exposures of a national central bank that are out of line with the risk exposures of the consolidated Eurosystem are therefore an existential threat to the monetary union. This column discusses the key flaws in the design of the Eurosystem responsible for this threat and explores three approaches to reducing the insolvency risk of national central banks.
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The Core of Austrian Theory – Llewellyn H. Rockwell Jr.
28 september
[This essay is a selection from “Why Austrian Economics Matters.”]
The concepts of scarcity and choice lie at the heart of Austrian economics. Man is constantly faced with a wide array of choices. Every action implies forgone alternatives or costs. And every action, by definition, is designed to improve the actor’s lot from his point of view. Moreover, every actor in the economy has a different set of values and preferences, different needs and desires, and different time schedules for the goals he intends to reach.
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“In America Money Does Grow on Trees” – MN Gordon
2 oktober
This week provided additional confirmation that America is fully committed to a program of currency destruction. Decades of terminal intelligence have gotten us to this special place. We’ll have more on this in a moment. But first some words on being fully committed.
We’ve never gutted a hog. But we hear it’s a bloody mess. The volume of blood that gushes out – as in, ‘bleeding like a stuck pig’ – is profuse.
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***Helicopter Money and the End of Taxes – Charles Hugh Smith
29 September
Rather than right the ship, the “easy fix” is to distribute “free money”–not just to billionaires and corporations but to everyone.
The system of collecting taxes and distributing the dough is a zero-sum game: each dollar of tax revenue paid by someone and given to someone else is one dollar that the taxpayer will no longer have to save or spend. Meanwhile, the recipient received a dollar that would not have been available without taxes.
State and local governments are still bound by this zero-sum game except for infrastructure spending funded by the sale of municipal bonds. These bonds are debt and must be paid back with interest. But as a general rule, the general funds of cities, counties and states are zero-sum: they can only spend what they collect in tax receipts.
As a result, the feeding frenzy at the public trough has winners and losers: taxpayers who receive fewer benefits than they pay in taxes are the losers, and residents / enterprises who get subsidies, tax breaks, entitlements, benefits in excess of what they paid in taxes are the winners.
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“Skinny” Or “Supersized”: What Happens To The Treasury Market When The Next Stimulus Bill Passes – Tyler Durden
3 oktober
While Congress remains gridlocked over the fifth covid stimulus bill (demanded by 90% of all Americans), rcent headlines suggested on-going discussions for a stimulus breakthrough between Democrats and Senate Republicans prior to the election. And while chances for a deal finalized prior to the November election are slim to nil, Bank of America acknowledges that the chances have improved from near zero at the start of the week. To be sure, timing is critical since the Congressional recess through the election starts on Oct 2 for the House & Oct 9 for the Senate (while Congress can always be called back for a vote but a pre-election deal seems most likely to happen in the next few days if it happens at all).
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The Flight of the Techies – John McNellis
2 oktober
New York City, San Francisco Bay Area are the big losers. The great 2020 exodus raises the question: Will the techies ever return?
Viewed a certain way, life resembles a Vegas sports book — its dramas have at least a few winners; not everyone loses. Covid-19 is no exception. The airline industry is on the tarmac, but RVs have never been in greater demand. Public transportation has a flat tire, yet bicycles can’t be found for love or money. Pharmaceuticals have skyrocketed, while the oil & gas industry is a dry well.
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Negative interest rates: The Danish experience – Signe Krogstrup, Andreas Kuchler, Morten Spange
2 Oktober
Negative policy rates are controversial and raise questions about their transmission to the economy and financial markets. This column presents emerging evidence from Denmark, where the central bank’s objective of maintaining a fixed exchange rate against the euro means that the key policy rate has been negative almost continuously since 2012. Recent and ongoing analyses suggest that the transmission is working well under negative rates, although pass-through to bank lending rates appears to be slower compared with periods of positive policy rates.
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Can the Stock Market Protect Wealth Better Than Gold and Silver? – Doug French
2 oktober
Trying to stay ahead of the government printing press is the modern citizen’s constant worry. There are no hard money central bankers, let alone politicians. Central bankers have stood the idea of present value on its head in attempts to stimulate dead economies and zombie enterprises while providing interest bills to governments with the possibility, although remote, of actually being serviced.
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Americans Still Running on Fumes of Stimulus, Now Vanishing – Wolf Richter
1 oktober
Income sags from eerie stimulus-spike. But consumers hadn’t spent all their stimulus & unemployment money, instead paid down credit cards & padded bank accounts. Now they’re drawing on them.
This is how Americans “in aggregate ” – all mixed together, with all class and wealth inequalities mercifully blurred out of the picture – are navigating this twisted economy that has been powered by stimulus payments, extra unemployment payments, and support payments for companies so that they don’t lay off their people. Personal income from all sources – stimulus payments, unemployment payments, wages and salaries, Social Security payments, rental income, dividend income, etc., but not stock market gains – spiked to an eerie record in April and has been dropping ever since.
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Why Market Risk Is Near The Highest In History – Adam Taggart
2 oktober
Famed market analyst and historian James Grant is no fan of the current policies of the US Federal Reserve:
Distortion in the cost of credit is the not-so-remote cause of the raging fires at which the Federal Reserve continues to train its gushing liquidity hoses. But the firemen are also the arsonists. It was the Fed’s suppression of borrowing costs, and its predictable willingness to cut short Wall Street’s occasional selling squalls, that compromised the U.S. economy’s financial integrity.
At age 74, having lived through a number of economic booms and busts as well as having authored numerous books on the history of financial markets, Jim sees the degree of speculation, overvaluation and malinvestment in today’s markets as about as bad as it’s ever been.
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***Climate change complacency in Europe – Andrew Oswald, Adam Nowakowski
28 September
Do our citizens care much about climate change? This column provides evidence that the answer is no. Using data on 70,000 randomly sampled people from the European Social Survey and the Eurobarometer, it shows that people exhibit low levels of worry about climate change, especially in cooler countries, and do not even believe that collective action would work. Climate change is viewed as less important than parochial issues such as inflation, health and social security, unemployment, and the economic situation. It appears our unborn great grandchildren may simply be left to their fate unless we can urgently find innovative ways to change people’s feelings about climate change.
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