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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*** Our State-Corporate Plantation Economy – Charles Hugh Smith
21 april
We’ve been persuaded that the state-cartel Plantation Economy is “capitalist,” but it isn’t. It’s a rentier skimming machine.
I have often discussed the manner in which the U.S. economy is a Plantation Economy, meaning it has a built-in financial hierarchy with corporations at the top dominating a vast populace of debt-serfs/ wage slaves with little functional freedom to escape the system’s neofeudal bonds.
Since I spent some of my youth in a classic Plantation town (and worked on the plantation as a laborer in summer), the concept of a Plantation Economy is not an abstraction to me, but a living analogy of the way our economy works.
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Stanley Fischer on the Balance Sheet: There will be no Tantrum on Wall Street – C.Jay Engel
18 april
Regarding the Fed’s balance sheet shrinkage narrative, one of the concerns is an unfavorable market response. The bond market (to the extent an actual market even exists) in 2013 panicked when the Fed began to taper it’s asset purchases. While many are concerned the markets could panic, Fed Vice Chair Stanley Fischer on Monday denied this as a true concern. After all, they’ve been talking about this for some time — even in the FOMC minutes — and the bond market has hardly shrugged.
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Eligibility easing and the lender of last resort – Thomas Huertas
21 april
Central banks helped contain the Global Crisis using a policy of ‘eligibility easing’. The policy expanded the collateral that could be used to access liquidity facilities and the range of counterparties that could request liquidity. This column argues that although eligibility easing successfully reduced the need for central banks to act as lender of last resort or to provide emergency liquidity assistance, the time has come to determine its future role as a macro-prudential tool.
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The Federal Reserve Is, and Always Has Been, Politicized – Ron Paul
17 april
Audit the Fed recently took a step closer to becoming law, when it was favorably reported by the House Committee on Oversight and Government Reform. This means the House could vote on the bill at any time. The bill passed by voice vote without any objections, although Fed defenders did launch hysterical attacks on the bill during the debate as well as at a hearing on the bill the previous week.
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Stock Markets Sit Blithely on a Powerful Time Bomb – Wolf Richter
21 april
No one knows the full magnitude, but it’s huge.
How big is margin debt really, and how much of a threat is it to the stock market and to “financial stability,” as central banks like to call their concerns about crashes? Turns out, no one really knows.
What we do know: Margin debt, as reported monthly by the New York Stock Exchange, spiked to another record high of $528 billion. But it’s only part of the total outstanding margin debt – which is when investors borrow money from their broker, pledging their portfolio as collateral.
An example of unreported margin debt: Robo-advisory Wealthfront, a so-called fintech startup overseeing nearly $6 billion, announced that it would offer its clients loans against their portfolios.
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A new bargaining perspective on sovereign debt restructuring – Marcus Miller, Sayantan Ghosal
17 april
Lacking some supra-national, overseeing authority, sovereigns in default typically renegotiate with their creditors. In these negotiations, the owed principal typically receives a ‘haircut’. This column explores whether overburdened sovereign debtors can strategically leverage delay as they bargain with their creditors. Under asymmetric information, a delay in the form of offers that the debtor knows won’t be accepted can work out in the debtor’s favour. The findings suggest that strategic delay can be used to show where restructuring is necessary.
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The Fed’s Risky Uncharted Course – Robert L. Luddy
17 april
The Federal Reserve Bank, also known as “The Fed,” was created in 1913 to regulate the banks and to ensure a stable dollar.
The Fed has strayed from its initial charter and is now the primary enabler of federal deficit spending and debt, which is now almost $20 trillion. The Fed’s primary tool is low interest rates, which distort financial decisions and expand the money supply, which leads to risky economic choices.
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China’s Credit Excess Is Unlike Anything The World Has Ever Seen – Andrew Brown
22 april
From a global macroeconomic perspective, we encourage readers to consider that the world is experiencing an extended, rolling process of deflating its credit excesses. It is now simply China’s turn.
For context, Japan started deflating their credit bubble in the early 1990s, and has now experienced more than 20 years of deflation and very little growth since. The US began its process in 2008, and after eight years has only recently been showing signs of sustainable recovery. The euro zone entered this process in 2011 and is still struggling six years onward. We believe China is now entering the early stages of this process.
Having said that, we believe that Chinese authorities have a viable plan for deflating their credit excess in an orderly fashion. Please stay posted as we will review this multi-pronged, market-based approach in our next column.
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Why Brexit, Bombs, and Trump Can’t Move Oil Prices – Dan Dicker
22 april
2017 hasn’t seen much volatility in oil prices, something we might not have expected with a new administration, a change in Fed policy, Brexit and a hundred other smaller events this year. So, what’s left to move oil prices, if the most common inputs aren’t having much impact?
Normally large global trends of production, OPEC plans, rumors of war, and actual hostilities will have a significant impact on prices. In recent days, however, we’ve seen a large tomahawk missile strike on Syria and a use of the “Mother of all Bombs” in Afghanistan, with nary a quiver out of oil prices.
What tends to impact oil prices more than anything else – at least when other inputs are being discounted – is the movement of money in and out of futures markets. Those bets represent what players with a real financial interest think about future oil prices. Further, those bets are not just an indication of how financial players are thinking, they can be a primary indicator of what the next intermediate (and even long-term) move on oil prices will be.
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Brexit, globalisation, and de-industrialisation – Jim Tomlinson
21 april
Many commentators have portrayed Britain’s referendum decision to leave the EU as being motivated by a popular rejection of globalisation. This column argues that in seeking to understand the economic basis of the Brexit vote, we should concentrate not on globalisation but on the long-term impact of de-industrialisation, which has left a legacy of a much more polarised service sector labour market, with large numbers of people condemned to poorly paid and insecure jobs.
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Your Complete Guide To Sunday’s French Presidential Elections First Round – Tyler Durden
22 april
One month after a startling reversion by the G-20 finance ministers and central bankers, who during their latest meeting in Baden-Baden dropped a decade-long tradition of rejecting protectionism and endorsing free trade, pressured by Trump’s delegate Steven Mnuchin, the IMF has done the same, and according to a communique from the IMF’s steering committee released on Saturday in Washington echoed the G-20 reversal, and said that officials “are working to strengthen the contribution of trade to our economies” while omitting a call from its last statement in October to “resist all forms of protectionism.”
The International Monetary and Financial Committee – which is the IMF’s top advisory panel, composed of 24 ministers and central bankers from nations including the U.S., China, Germany, Japan and France – released the statement during the spring meetings of the IMF and World Bank. Since joint statements at gatherings such as the G-20 and the IMF require assent from members, the change in the U.S. position on trade from the Obama administration is forcng modifications in language that was previously uncontroversial.
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***What Is the “Correct” Growth Rate of the Money Supply? – Frank Shostak
19 april
Most economists believe that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money, which must be accommodated.
Failing to do so, it is maintained, will lead to a decline in the prices of goods and services, which in turn will destabilize the economy and lead to an economic recession or, even worse, depression.
Since growth in money supply is of such importance, it is not surprising that economists are continuously searching for the right, or the optimum, growth rate of the money supply.
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Against False Arrogance of Economic Knowledge – Amit Bhaduri
17 april
The problem of any branch of knowledge is to systematize a set of particular observations in a more coherent form, called hypothesis or ‘theory.’ Two problems must be resolved by those attempting to develop theory: (1) finding agreement on what has been observed; (2) finding agreement on how to systematize those observations.
In economics, there would be more agreement on the second point than on the first. Many would agree that using the short-hand rules of mathematics is a convenient way of systematizing and communicating knowledge — provided we have agreement on the first problem, namely what observations are being systematized. Social sciences face this problem in the absence of controlled experiments in a changing, non-repetitive world. This problem may be more acute for economics than for other branches of social science, because economists like to believe that they are dealing with quantitative facts, and can use standard statistical methods. However, what are quantitative facts in a changing world? If one is dealing with questions of general interest that arise in macroeconomics, one has to first agree on ‘robust’ so-called ‘stylized’ facts based on observation: for example, we can agree that business cycles occur; that total output grows as a long term trend; that unemployment and financial crisis are recurring problems, and so on.
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*** Ricardo and comparative advantage at 200 – Douglas Irwin
19 april
The idea of comparative advantage is an essential part of every economists’ intellectual toolkit. On the 200th anniversary of the publication of “On the Principles of Political Economy and Taxation”, this column salutes David Ricardo’s achievement of setting out the theory for comparative advantage for the first time.
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Globalization and the End of the Labor Aristocracy, Part 2 – Jayati Ghosh
17 april
The past two decades have witnessed an explosion in the treaties, agreements, and other mechanisms whereby global capital imposes it rules upon governments and their citizenries. Unlike the conditions imposed on developing countries by the IMF and the World Bank, these rules apply even to countries that are not debtor-supplicants to international financial institutions. They require all countries to restrict their policies, though these restrictions are especially damaging to the prospects of autonomous economic development in the “periphery” of the world capitalist economy.
The Multilateral Trading System
In terms of the multilateral trading system, the Uruguay Round of the General Agreement on Tariffs and Trade (signed off in 1994) moved to a single-tier system of rights and obligations, under which developing countries have to fully implement all rules and commitments. This was a quid pro quo for access to developed-country markets in agriculture, textiles, and clothing—sectors that had previously been highly protected. This has constrained the possibilities for autonomous development in the peripheral countries, reducing the policy choices open to them and denying them some of the most important instruments that had been used by countries of the current capitalist “core” in their own industrialization.
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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.