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 zijn.

Sinds begin 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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With Impeccable Timing, ‘Economic Miracle’ in Spain Unravels – Don Quijones
24 april 24
Since the granddaddy of all housing bubbles popped in Spain between 2008 and 2009, unleashing one of the deepest recessions in living memory, the nation’s public debt has more than doubled, from just over 40% of GDP to almost exactly 100% today. Last year, despite the fact that Spain grew faster than almost any other European economy, the government managed to rack up a deficit of 5.2%, one full percentage point above the target that it had set itself a year earlier and over three percentage points above the Eurozone average.
It’s the third-highest deficit-to-GDP ratio in the Eurozone after Greece and Portugal. That’s some claim for Europe’s supposed economic success story.
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How Systems Break: First They Slow Down – Charles Hugh Smith
20 april
Alternatively, we can cling to a state of denial, and the dominant system will be replaced by arrangements that are not necessarily positive.
The reality that cannot be spoken is that all the financial systems we believe are permanent are actually on borrowed time. One way we can judge this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels.
Another is to look at the extremes the system reaches without returning to “normal”: for example, interest rates, which rather than normalizing after seven years of suppression are being pushed to negative rates by increasingly desperate central bankers.
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Financial regulation: Not yet an efficient outcome – Angus Armstrong, E Philip Davis
22 april
Since the Global Crisis, a number of regulatory policies have been discussed, proposed and sometimes implemented to address shortcomings in the regulatory framework. This column presents the views of the speakers at a recent conference on whether we have reached an efficient outcome. For most of the speakers, the answer was a resounding “no”.
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China Ocean Freight Index Collapses to Record Low – Wolf Richter
17 april
The amount it costs to ship containers from China to ports around the world, a function of the quantity of goods to be shipped and the supply of vessels to ship them, just dropped to a new historic low.
The China Containerized Freight Index (CCFI) tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. It reflects the unpolished and ugly reality of the shipping industry in an environment of deteriorating global trade.
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Inflation as a Policy – Henry Hazlitt
22 april
In his classic little history of fiat money inflation in the French Revolution, Andrew D. White points out that the more evident the evil consequences of inflation became, the more rabid became the demands for still more inflation to cure them. Today, as inflation increases, apologists emerge to suggest that, after all, inflation may be a very good thing—or, if an evil, at least a necessary evil. The chief spokesman of this group is Prof. Sumner H. Slichter of Harvard.
Slichter’s testimony and writings overflow with fallacies. I confine myself here to three: (1) That a “creeping” inflation of 2 percent a year would do more good than harm. (2) That it is possible for the government to plan a “creeping” inflation of 2 percent a year (or of any other fixed rate). (3) That inflation is necessary to attain “full employment” and “economic growth.”
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A Proposal to Eliminate the Distortions Caused by Bailouts – V. V. Chari, Patrick J. Kehoe
5 januari 2016
By limiting debt-equity ratios and taxing asset size, policymakers can correct distortions and externalities caused by bailouts
We argue that bailouts create tax distortions, subsidy distortions and debt-size externalities. We show that an orderly resolution provision as in the Dodd-Frank Act addresses the tax and subsidy distortions but not the debt-size externalities. A regulatory system that imposes limits on the debt-equity ratio of firms and imposes a Pigouvian tax on their size eliminates the distortions and completely corrects the externalities.
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***The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable – Chalres hugh Smith
18 april
The next few years will strip away the illusions of “growth” and reveal which dominates our society and economy: privilege or social mobility.
Among the many lessons of empires is one shared by virtually every empire: once the privileged few limit the rise of those from humble origins (i.e. social mobility), the empire is doomed to rising instability and collapse.
Just as a reminder of how wealth and income are increasingly concentrated in the top of the wealth/power pyramid:
The greater the concentration of wealth and power, the lower the social mobility; the lower the social mobility, the greater the odds that the system will collapse when faced with a crisis that it would have easily handled in more egalitarian times.
When the economy is expanding faster than the population and the tide is lifting all ships large and small, the majority of people feel their chances of getting ahead are positive (even if the actual chances remain low).
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Safeguarding the Euro – balancing market discipline with certainty – Thorsten Beck
25 april
A lot has been achieved in terms of institution building to turn the Eurozone into a sustainable currency union. The Eurozone Crisis, however, has shown that the Eurozone is still not a properly functioning currency union. This column, first posted 12 February 2016, points to three areas of further reform to achieve such a goal. These include the disentanglement of sovereigns and banks, completion of a banking union, and an institutional convergence for a fully integrated financial system.
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How Central Planners Crippled Japan’s Economy – Jonathan Amselem
21 april
The greatest tragedy of the 2008–2009 financial meltdown was not that it happened. The collapse of asset prices was the necessary result of near zero interest rates. No, the most devastating aspect of the financial meltdown is that central planning alchemy lost no credibility. Policymakers around the world are still turning to Keynesian and socialist interventionism to address problems caused by Keynesians and socialists. The twin sledgehammers of central banking and almost unlimited state power have so distorted global markets (again) that some economies are now terminal. The latest victim of the interventionists and micromanagers is the nation of Japan. A once genuinely productive and innovative nation has, over the years, slowly succumbed to the cancerous rot of interventionism.
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Who the Heck Is Buying the US Stocks that Chinese and other Foreign Investors Are Massively Dumping? – Wolf Richter
19 april
The Chinese move, ranging from individual investors to corporate entities, into overseas real estate, particularly in West Coast cities in the US, in Vancouver and Toronto in Canada, but also in trophy cities in Australia, New Zealand, and some other countries, has become legendary.
More recently, Chinese companies, supported by state-owned banks and PE firms, have pushed into global M&A on a large scale, including in the US, buying companies lock, stock, and barrel.
But at the same time they’ve been dumping US stocks and bonds.
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Towards a fiscal union for the Eurozone – Céline Allard, John C Bluedorn
22 april
The turbulence experienced by the Eurozone in 2010-12 highlighted the shortcomings of the currency union. This column suggests that the crisis was exacerbated by a combination of a lack of market adjustment mechanisms, rapid financial integration, and underlying design issues. While substantial progress has been made to address some architectural issues, minimal elements of a fiscal union are still needed in our view to increase the union’s resilience to shocks and to prevent the re-emergence of broader economic and financial stress.
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Lessons Learned – John H. Cochrane
23 april
Harald Uhlig got me thinking again about fiscal policy and inflation, in his skeptical comments on the fiscal theory discussion, available here. At left, two of his graphs, asking pointedly one of the standard questions about the fiscal theory: Ok, then, what about Japan? (And Europe and the US, too, in similar situations. If you don’t see the graphs or equations, come to the original.) This question came up several times and I had the benefit of several creative seminar participants views.
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Soros Warns of 2008-Like Debt Growth in China. How Risky are Its Banks? – Yves Smith
21 april
The lead story at Bloomberg is George Soros’ dire warnings about China a speech yesterday. He is talking his book; he’s short the renminbi, and pumped for China to float the Chinese currency against a broader basket of currencies, which would also lead it to decline against the dollar.
Soros made a doomsday call against Europe in 2012 that did not pan out, and he has been aggressive there in trying to influence policy, both on economics and on Ukraine. And he acknowledged that the timing of ugly end games is uncertain.
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*** “We Cannot Afford another Draghi”: Germany Attacks ECB – Don Quijones
19 april
Relations between the government of Europe’s biggest economy, Germany, and Europe’s most powerful financial institution, the European Central Bank, have soured to the point of curdling.
The latest volley of barbed remarks came from Germany’s dour Finance Minister Wolfgang Schäuble, who has never been one to mince his words. Speaking at an awards ceremony outside Frankfurt on April 8, he told the audience that the stellar rise of right-wing populist Alternative für Deutschland party was due in large part to the ECB’s loose monetary policy.
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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.