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.

——————————————————————————————————
Some simple Bitcoin economics – Linda Schilling, Harald Uhlig
11 oktober
The Bank for International Settlements has attributed the volatility of the price of Bitcoin and other cryptocurrencies to the lack of a crypto central bank. This column examines the implications of this and the increasing, but bounded, supply of Bitcoin for the cryptocurrency’s price. It also discusses how the price of Bitcoin interacts with monetary policy for traditional currencies.
——————————————————————————————————
The Myth of Synchronized Growth and the Era of Secular Stagnation – Daniel Lacalle
13 oktober
We have been hearing from international bodies, from central banks that we were living in a synchronized growth territory. That we were seeing developed markets grow faster than what was typical while emerging markets were also growing in tandem. And that the economies were much healthier, that everything was much better, and that 2018 was a year in which we would see the confirmation of that synchronized growth trend and the reflation trade.
Well, it wasn’t the case. The case actually was that what we were being told was synchronized growth was actually synchronized debt growth. And that massive increase in debt that led to the highest level relative to GDP in history last year was creating massive problems, internal problems, in many economies that were getting used to cheap and easy money.
A very small, minuscule and completely moderate reduction in the balance sheet of the Federal Reserve of less than $260 billion, has created this reckoning. This reckoning that the reality that we were seeing globally was not a reality of higher growth, better productivity, and more positive surprises. But the reality that it was just debt led bump up of a much clearer trend of secular stagnation.
——————————————————————————————————
Here Comes the ECB with a “Bubble” Warning, After it Caused the Most Absurd Bond Bubble Ever – Wolf Richter
12 oktober
“The ECB cannot and should not turn a blind eye to risks to financial stability.”
“Maintaining financial stability is about two things: First, it is about preventing the build-up of bubbles; second, it is about making the system more resilient,” said ECB Executive Board Member and Vice-Chair of the ECB’s Supervisory Board, Sabine Lautenschläger, today in a speech. It’s not often that central bankers are allowed to use the B-word in public, except when denying that bubbles exist, or when denying that they can be identified if they do exist.
——————————————————————————————————
Here’s Why the Next Recession Will Spiral Into a Depression – Charles Hugh Smith
12 oktober
Here’s the difference between a recession and a depression: you can’t get blood from a stone, or make an insolvent entity solvent with more debt.
There are two basic differences between a recession and a depression:
1. Duration: a recession typically lasts between 6 and 18 months, while a depression drags on for years or even decades, often masked by official propaganda as “slow growth” or “stagnation.”
2. The basic dynamic: recessions are business / credit cycle events that wring out the excesses of credit expansion (i.e. lending to unqualified borrowers who subsequently default) and mal-investment in low-yield, high-risk speculations and projects that only made financial sense in the euphoria of bubble psychology (i.e. animal spirits acting as if bubbles never pop).
Recessions are brief because the basic dynamic is to write down defaults, tighten up credit and absorb the losses from failed speculations.
——————————————————————————————————
How we create and destroy growth: The 2018 Nobel laureates – Kevin Bryan
11 okctober
The 2018 Nobel Prize in Economic Sciences has been awarded jointly to William Nordhaus for ‘integrating climate change into long-run macroeconomic analysis’, and to Paul Romer for ‘integrating technological innovations into long-run macroeconomic analysis’. This column outlines their work and the connections between them. Both have at their core the longstanding problem of economic growth: why are some places and times rich and others poor, and what is the impact of these differences?
——————————————————————————————————
***I Was Asked: Why Did All this Money-Printing Not Trigger Massive Inflation? – Wolf Richter
9 oktober
Asset-price inflation feels good to asset holders – until it doesn’t
I was asked two important questions in this mind-boggling era of QE: The Bank of Japan has monetized 50% of its national debt; so why has there not been a surge of inflation? And why can’t the Fed restart QE and do the same without triggering inflation?
“Inflation” can be a lot of things. Here we’re not talking about “monetary inflation.” We’re talking about price inflation – when the currency loses its purchasing power. There are several types of price inflation that are accounted for separately, including:
Consumer price inflation
Wholesale price inflation
Wage inflation.
Asset price inflation.
The questions were about consumer price inflation; but the answer lies in asset price inflation.
——————————————————————————————————
Reforms are too important to be left to reformers – Nauro Campos, Paul De Grauwe, Yuemei Ji
10 oktober
The tragedy of structural reforms is that they have been captured by policymakers. This column argues that the incessant repetition of the ‘must-reform’ mantra as a solution to the crisis has discouraged academic economists from embracing it as the important research topic it clearly is, and attempts to address the lack of adequate knowledge which makes the implementation of reforms more difficult and limits their effectiveness.
——————————————————————————————————
Something Putin and Juncker appear to agree on – the euro – Elina Ribakova
25 september
“It is absurd that Europe pays for 80% of its energy import bill – worth €300 billion a year – in US dollars when only roughly 2% of our energy imports come from the United States,” said President Juncker in his state of the union speech.* Europe’s largest supplier of energy – Russia, who accounts for a third of that bill – couldn’t agree more. Russia’s offer to switch to euros in trade with the EU will likely be costly to implement, but the US switch towards unilateralism is forcing its long-standing partners to question the dollar’s global dominance.
——————————————————————————————————
Regulating cryptocurrencies: Assessing market reactions – Raphael Auer, Stijn Claessens
9 oktober
Cryptocurrencies are often thought to operate out of the reach of national regulation. This column argues that in fact their valuations, transaction volumes, and user bases react substantially to news about regulatory actions. Because they rely on regulated financial institutions to operate and markets are (still) segmented across jurisdictions, cryptocurrencies are within the reach of national regulation.
——————————————————————————————————
The Phillips Curve Myth – Frank Shostak
9 oktober
It is a well-known belief that by means of monetary policy, the central bank can influence the rate of real economic expansion. It is also held that this influence however, carries a price, which manifests itself in terms of inflation.
For instance, if the goal is to reach a faster economic growth rate and a lower unemployment rate then citizens should be ready to pay a price for this in terms of a higher rate of inflation.
It is held that there is a trade-off between inflation and unemployment, which is depicted by the Phillips curve. (William Phillips described a historical relationship between the rates of unemployment and the corresponding rates of rises in wages in the United Kingdom,1861-1957, published in the quarterly journal of Economica,1958).
The inverse correlation between the rate of inflation and the unemployment rate has become an important element in the theory of price inflation. The lower the unemployment rate the higher the inflation rate. Conversely, the higher the unemployment rate the lower the inflation rate is going to be.
——————————————————————————————————
“Concerned” Bank of England Raises Alarm about Growth of High-Risk Loans – Don Quijones
10 oktober
The power of Collateralized Loan Obligations.
“The global leveraged loan market is larger than – and growing as quickly as – the US subprime mortgage market was in 2006,” said the Bank of England’s Financial Policy Committee in the statement from its latest meeting. And the committee is “concerned by the rapid growth of leveraged lending.”
In terms of magnitude, the US and EU “leveraged loan” market combined now exceeds $1.3 trillion, up from $50 billion at the turn of the century.
——————————————————————————————————
The Distortions of Doom Part 2: The Fatal Flaws of Reserve Currencies – Chalres Hugh Smith
10 oktober
The way forward is to replace the entire system of reserve currencies with a transparent free-for-all of all kinds of currencies.
Over the years, I’ve endeavored to illuminate the arcane dynamics of global currencies by discussing Triffin’s Paradox, which explains the conflicting dual roles of national currencies that also act as global reserve currencies, i.e. currencies that other nations use for global payments, loans and foreign exchange reserves.
The four currencies that are considered global are the US dollar (USD), the euro, the Japanese yen and China’s RMB (yuan). The percentage of use in each of the three categories of demand for the reserve currencies–payments, loans and foreign exchange reserves–are displayed below.
——————————————————————————————————
Meet The Finance Professor Exposing Rigged Markets One Academic Paper At A Time – Tyler Durden
13 oktober
Finance professor John Griffin, along with his doctoral student companion, Amin Shams, were the two academics that drew market-moving conclusions about bitcoin last year, while the digital currency was trading around $20,000. After sifting through 2 terabytes of trading data, they alleged that bitcoin was being manipulated by someone using the cryptocurrency Tether to purchase it. Tether remains a relatively little-known crypto, which is pegged to one US dollar. Part of its appeal is that it can “stand in” for dollars when necessary, according to Bloomberg.
Griffin and Shams authored a paper in June, with the results of their findings ultimately catalyzing many digital assets to move lower, despite the fact that the CEO of Tether publicly denied that its currency was used to prop up bitcoin.
Griffin works at the University of Texas at Austin, and has become quite an unpopular figure on Wall Street for similar work he has done in the past on ratings companies, the VIX and investment banks. In most of his findings, he claims that these well-known financial instruments and players are, in one way or another, rigged. And the professor seems to enjoy exposing precisely that: rigged, manipulated markets and shady players.
——————————————————————————————————
QE Party Is Drying Up, Even at the Bank of Japan – Wolf Richter
8 oktober
Despite repeated speeches to the contrary.
As of September 30, total assets on the Bank of Japan’s elephantine balance sheet dropped by ¥5.4 trillion ($33 billion) from a month earlier, to ¥537 trillion ($4.87 trillion). It was the fourth month-over-month decline in a series that started in December. This chart shows the month-to-month changes of the balance sheet. Despite all the volatility, the trend since mid-2016 is becoming clear:
——————————————————————————————————
China Should Consider Launching its Own Stablecoin – Ana Berman
10 oktober
The Chinese government should consider launching its own yuan-backed stablecoin despite the current ban on cryptocurrencies, an op-ed in Chinese financial journal CN Finance reports Tuesday, Oct. 9.
An expert from the People’s Bank of China (PBoC), Li Liangsong, and professor of Fudan University Wang Huaqing wrote an article called “Analysis of Digital Stable Coins” for CN Finance — a bimonthly journal affiliated with the PBoC.
In the opinion piece, the authors provide a brief review of USD-backed coins, such as Tether, the Gemini dollar, and Paxos Standard. The researchers expect them to increase the role of dollar on a global stage and to suppress other fiats, with the yuan among them.
——————————————————————————————————
***The Wild West of information markets: What we need to know before law and order can rule – Dirk Bergemann, Alessandro Bonatti
11 oktober
The growth of social media over the past decade has brought a parallel explosion in the size and value of information markets. This column presents the findings from a comprehensive model of data trading and brokerage. The model identifies three aspects of information markets – the value of information, the nature of competition in these markets, and consumers’ incentives – which are in particular need of further research and understanding.
——————————————————————————————————
Conflicting Government Data Shows the Importance of Sound Economic Theory – Ryan McMaken
11 oktober
On Tuesday, I looked at some recent research suggesting that both wealth and incomes are declining — all while the Fed’s monetary policy has become ever more interventionist and regulatory.
The conclusions involved were premised on some assertions about Fed policy.
Fed regulatory changes now favor large Wall-Street-centered borrowers over smaller Main-Street-centered borrowers. This has led to greater wealth gains for financial-sector firms, but does not help growth for most ordinary-sized firms and employers.
Fed policies encouraging ultra-low interest rates have led to yield-chasing by investors which brings greater gains in higher-risk more sophisticated investments. More ordinary, safer investment instruments used by ordinary people see fewer gains.
Fed policy has led to a financial system with large amounts of asset-price inflation in stocks, but not in housing. This means greater income gains for higher-income, higher-wealth households, because higher-income households tend to be more invested in stocks than in housing (proportionally).
——————————————————————————————————

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.

Eerdere afleveringen van dit wekelijkse overzicht vindt u hier.