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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The Dollar Dilemma: Where to From Here? – Ron Paul
22 juni
Introduction: Where We Are
It’s a fallacy to believe the US has a free market economy. The economy is run by a conglomerate of individuals and special interests, in and out of government, including the Deep State, which controls central economic planning.
Rigging the economy is required to prevent market forces from demanding a halt to the mistakes that planners continuously make. This deceptive policy can last only for a limited time. Ultimately, the market proves more powerful than government manipulation of economic events. The longer the process lasts, the greater the bubble that always bursts. The planners in charge have many tools to perpetuate confidence in an unstable system, but common sense should tell us that grave dangers lie ahead.
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The Smart Money Gets Ready for the Next Credit Event – Wolf Richter
19 juni
“It feels like we’re about 12 months away, but we could get into extended innings.”
As corporate indebtedness in the US has reached precarious heights, and as risks are piling up, in an environment of rising interest rates and a hawkish Fed, the smart money is getting ready.
The smart money is preparing for the moment when the air hisses out of the exuberant junk-bond market, when liquidity dries up for over-indebted companies, and when their bonds collapse. The smart money is preparing for the arrival of “distressed debt” – it’s preparing now because these preparations include raising billions of dollars for their funds, and that takes some time.
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Deutsche Bank’s Troubles Raise Worries About the Future of the Euro Zone – Thorsten Polleit
19 juni
The euro banking sector is huge: In April 2018, its total balance sheet amounted to 30.9 trillion euro, accounting for 268 per cent of gross domestic product (GDP) in the euro area. Unfortunately, however, many euro banks are in lousy shape. They suffer from low profitability and carry an estimated total bad loan exposure of around 759 billion euro, which accounts for roughly 30 per cent of their equity capital.
Share price developments suggest that investors have lost quite some confidence in the viability of euro banks’ businesses: While US bank stocks are up 24 per cent since the beginning of 2006, the index for euro-area bank stocks is still down by around 70 per cent. Perhaps most notably, ’Germany’s two largest banks, Deutsche Bank and Commerzbank, have lost 85 and 94 per cent, respectively, of their market capitalization.
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Practical macroeconomic policy evaluation – Narayana Kocherlakota
18 juni
Modern macro models offer insights into the outcomes of adopting entire policy regimes, but in reality, policymakers are rarely required to make such broad-ranging policy decisions. This column suggests how theoretical and applied microeconomics can be used to develop a framework for modern macroeconomic policymaking, and demonstrates how game-theoretic principles could be used to make series of sequential policy decisions. While this approach requires large amounts of data, it would allow academic macroeconomists to refocus on important policy questions.
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Why Central Bankers Think They’re Doing Good for the Economy – Frank Shostak
22 juni
Many commentators are of the view that the US central bank should pursue policies that will prevent the possible decline of the economy into a liquidity trap hole. What is this all about?
In the popular framework of thinking that originates from the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.
Recessions, according to Keynes, are a response to the fact that consumers — for psychological reasons — have decided to cut down on their expenditure and raise their savings.
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How the ECB Helped Spain “Recover” Faster than Italy from the Crisis – Don Quijones
20 juni
A nation of savers v. a nation of debtors.
In April 2017, the IMF predicted that by the end of the year the Spanish economy would overtake Italy’s in per-capita GDP. It didn’t happen, but Spain does continue to close the gap on Italy.
In 2017, Spain maintained its per-capita GDP at 92% of the EU average while Italy’s slipped another point to 96%. During the darkest depths of the Great Recession, back in 2011 and 2012, Spain’s per capita GDP sank 11 points below that of Italy’s. But now the gap has narrowed to just four points, the smallest since 2007, when, on the back of one of the world’s most mind-watering property bubbles, Spain’s economy very briefly overtook Italy’s.
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Euro area reform cannot ignore the monetary realm – Jérémie Cohen-Setton, Shahin Vallee
20 juni
The authors of the recent CEPR Policy Insight argue that the euro area needs an alternative to the current system of fiscal rules and financial penalties to discipline fiscally wayward members. This column, part of the VoxEU debate on euro area reform, argues that by not complementing their proposals with recommendations in the monetary realm, the authors have missed an opportunity to provide a balanced reform package that would not only increase fiscal discipline and risk sharing, but also enhance liquidity provision.
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***Gresham’s Law and Bitcoin – Charles ugh Smith
20 juni
Rather suddenly, the state issued fiat currency bolivar lost 99% of its purchasing power.
Gresham’s law holds that “bad money drives out good money,” meaning that given a choice of currencies (broadly speaking, “money” that serves as a store of value and a means of exchange), people use depreciating “bad” money to buy goods and services and hoard “good” money that is appreciating or holding its value.
As this dynamic plays out, eventually there is little “good money” in circulation and the economy suffers accordingly.
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Argentina’s Peso Collapse Is a Warning Sign – Daniel Lacalle
22 juni
The recent collapse of the Argentine Peso and other emerging currencies is more than a warning sign.
It could be the arrival of a “sudden stop”. As I explain in Escape from the Central Bank Trap (BEP, 2017), a sudden stop happens when the extraordinary and excessive flow of cheap US dollars into emerging markets suddenly reverses and funds return to the U.S. looking for safer assets. The central bank “carry trade” of low interest rates and abundant liquidity was used to buy “growth” and “inflation-linked” assets in emerging markets. As the evidence of a global slowdown adds to the rising rates in the U.S. and the Fed’s QT (quantitative tightening), emerging markets lose the tsunami of inflows and face massive outflows, because the bubble period was not used to strengthen those countries’ economies, but to perpetuate their imbalances.
The Argentine Peso, at the close of this article, lost 17% annualized is one of the most devalued currencies in 2018. More than the Lira of Turkey or the Ruble of Russia.
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Why a US-Style Housing Bust & Mortgage Crisis Can Happen in Canada, Australia, and Other Bubble Markets – Wolf Richter
20 juni
Despite persistent and false memes to the contrary.
When a housing downturn gets big enough, there will be a mortgage crisis, and it will hit banks, shadow banks, and mortgage insurers no matter what the mortgage laws are: that’s what the US mortgage crisis has demonstrated. Yet many industry organs and media outlets in Canada, Australia, and other places with acute housing bubbles are trying to hide behind a false meme about US mortgage laws. What happened there cannot happen here, they say.
So we’re going to debunk this meme.
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The new funding structure for the Bank of England suggests that the Treasury thinks the proverbial is going to hit the fan – Richard Murphy
22 juni
Philip Hammond sprung a surprise by announcing a new era in the relationship between the government and the Bank of England last night. The details are here. The Guardian, and many others, comment on the story in a way that is not apparently related to the documentation published, saying:
The Bank of England will be allowed to provide more than £500bn in lending to the economy without seeking the Treasury’s permission, in a move that reinforces the strength of the UK financial system as Britain prepares to leave the EU.
Announcing the plan at the annual Mansion House dinner for bankers in the City of London on Thursday, Philip Hammond, the chancellor, said the changes would help to improve the resilience of the central bank. It would also help with its “ability to meet its monetary and financial policy objectives in the future”, he said.
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European bank mergers: Domestic and cross-border – Patty Duijm, Dirk Schoenmaker
21 juni
The European economy is recovering, and banks are thinking once more about mergers. This column demonstrates that, while cross-border mergers have been predicted before, most European bank mergers have consistently been domestic. Regulatory hurdles and relatively low concentration in some of the countries of Europe suggest this may continue.
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What’s Going On with Trucking and Rail? – Wolf Richter
18 juni
Everything is spiking, setting off “inflationary concerns.”
When consumer products companies, retailers, oil-and-gas drillers, manufacturers, and other companies complain that shipping goods within the US is confronting them with soaring costs, capacity constraints, and delays, they’re not making this up. Trucking companies and railroads – an infamously cyclical industry that suffered through the “transportation recession” from 2015 through much of 2016 – are jacking up their prices with gusto.
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***OPEC “Deal” Ends With Output Confusion, Sets Stage For “Deal Unraveling” – Tyler Durden
23 juni
Just 24 hours after OPEC appeared on the edge of splintering, Iran seemed to cave and in a deal that was described as a victory for everyone, OPEC member states and Russia provided a vague assurance they would boost output by striving to return to full compliance of the original production quotas as set in the 2016 Vienna production cut agreement.
As Goldman summarized in its post-mortem, “no further details were provided, including no country level allocation, no guidance for non-OPEC participants or timeline for the increase.” Furthermore, during the press conference following Friday’s deal, the one question which never got an explicit answer is how much output would be boosted by, with little clarity shed beyond “targeting full compliance at the group level”.
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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.

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