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.

In verband met het wegvallen van vorige week van dit wekelijkse overzicht is het overzicht ditmaal iets groter dan gebruikelijk. We hebben gelijk de gelegenheid te baat genomen het verschijnsel Bitcoin extra aandacht te geven. Omdat sommige namen van cryptocurrencies u mogelijk onbekend zijn, hebben we deze artikelen gemerkt met een X~X. Zie bijvoorbeeld ook de gepubliceerde interviews dit weekend.
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X~X Economists relaxed about Bitcoin: New CFM-CEPR expert survey on cryptocurrencies, the financial system, and economic policy – Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis
21 december
Cryptocurrencies have been a staple of news headlines in 2017. The latest Centre for Macroeconomics and CEPR survey suggests that the majority of leading European economists do not believe that these currencies are currently a threat to the stability of the financial system, or will be in the next couple of years. A majority of panel members, however, are in favour of greater regulatory oversight, primarily because of concerns that the anonymity and opacity of cryptocurrencies facilitate tax evasion and other criminal activities.
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X~X Regulating Cryptocurrencies–and Why It Matters – Charles Hugh Smith
18 december
Nations that attempt to limit cryptocurrencies’ ability to solve these problems will find that protecting high costs and systemic friction will grind their economies into dust.
There’s a great deal of confusion right now about the regulation of cryptocurrencies such as bitcoin. Many observers seem to confuse “regulation” and “banning bitcoin,” as if regulation amounts to outlawing bitcoin.
Further confusing things is the regulation of cryptocurrency exchanges, where cryptocurrencies are bought and sold.
In China, for example, cryptocurrencies are not outlawed, but exchanges were shut down until regulators could get a handle on how to deal with the potential for excesses such as fraud, misrepresentation, etc.
A Wild West free-for-all is conducive to scammers, and so some thoughtful regulation that protects users is to be welcomed.
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X~X Will Ethereum Be The Next Facebook? – Kenneth Tan
22 december
2017 has been an amazing year for Ethereum.
Prices has hit an all time high of $800, and it is now the processing nearly double the number of transactions of bitcoin at a million a day.
As we enter 2018, I think Ethereum will be the next Facebook due to the massive amount of use cases that i am finding in major industries that benefit greatly from decentralization & transparency.
Ethereum is basically the app store for blockchain.
It allows creators to build and run apps without having to worry about the underlying “operating” system just like Apple.
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X~X Cryptocurrencies Rip Higher As Dip-Buying Replaces Panic-Selling – Tyler Durden
23 december
Yesterday’s triple-legged panic-selling across the crypto-space, which saw Bitcoin and Ethereum down 30 and 40% respectively at their worst ended around 10amET and while the mainstrea media was happy to declare (once again) the death of Bitcoin et al., the entire crypto world has soared since – almost erasing the entire day’s losses.
Across the board, cryptocurrencies are soaring…
Which has pushed Bitcoin, Ethereum, Ripple, and Litecoin back to almost unchanged from Thursday…
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Bank of Canada’s Poloz Is Right to Be Worried – Peter Diekmeyer17 december
Bank of Canada governor Stephen Poloz cited numerous worries plaguing the economy during his speech to Toronto’s financial elites at the prestigious Canadian Club. However, the title of Poloz’s presentation, “Three things keeping me awake at night” seemed odd, given positive recent Canadian employment, GDP and other data.
Poloz highlighted high personal debts, housing prices, cryptocurrencies and other causes for concern, along with actions that the BoC is taking to alleviate them. His implicit message was (as always) “We have things under control.” But if that’s all true, then Canada’s central bank governor should be sleeping like a baby. So, what is really keeping Mr. Poloz up at night? Three possibilities come to mind.
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China’s Raging Against Dying Of The Light (Or Why Peak Employment Is Imminent) – Chris Hamilton
21 december
China’s working age population is clearly defined as those aged 16 to 50 years old for females (55 for “white collar” females) and 16 to 60 years old for males. China mandates retirement at these outer age limits. Perhaps of some interest should be that this working age population peaked in 2011 and has been declining since. This decline will continue indefinitely as China has a collapsing childbearing population (detailed HERE), net emigration (outflow), and a still decidedly negative birthrate.
There is no evidence to believe the working age declines will abate any decade soon. As the chart below shows, China’s potential workforce will be shrinking indefinitely… and by 2030 China’s potential workforce will be over 100 million fewer than the 2011 peak (an 11% decline)…and only further down from there.
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X~X Hedge Fund Behind Mystery “Bitcoin To $50,000” Bet Revealed – Tyler Durden
22 december
The crypto space was thrown into chaos today as the price of bitcoin and its peers plunged overnight, cementing the pioneering digital currency’s worst week since December 2013, only to rebound dramatically into the close, wiping out virtually all losses. Also today, just as the rout was nearing its trough, we shared a story from the Wall Street Journal about a mystery trader who placed a $1 million bet that bitcoin will climb above $50,000 by December 28, 2018.
That trade was a call option purchased on the LedgerX platform, which received permission from the CFTC over the summer to launch the first swap execution facility for the clearing of bitcoin-linked derivatives, and began trading in the fall, before CME and CBOE launched their own bitcoin futures. As the WSJ detailed previously, if bitcoin is below $50,000 on Dec. 28, 2018, the options will expire worthless, and the $1 million will be lost. But if bitcoin rises above that level, the options give the owner the right to buy 275 bitcoins for $50,000 apiece—a transaction that would cost $13.8 million.
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(X~X) (How To Survive Today’s Bubbly Market – James Rickards
23 december
To paraphrase one of the great gems of Wall Street wisdom, “Nothing infuriates a man more than the sight of other people making money.”
That’s a pretty good description of what happens during the late stage of a stock market bubble. The bubble participants are making money (at least on a mark-to-market basis) every day.
Meanwhile, the more patient, prudent investor is stuck on the sidelines – allocated to cash or low-risk investments while watching everyone else have fun. This is especially true today when the bubble is not confined to the stock market but includes exotic sideshows like cryptocurrencies and Chinese real estate.
It gets even worse when investors are taunted by headlines like the one in a recent article, “Investors Can Either Buy Bubbles or Be Left Far Behind.” The article is a case study in the “Bubblicious Portfolio.” Infuriating indeed. Actually, it should not be.
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X~X The Bitcoin Bubble – Yves Smith et al
20 december
This post focuses on why bitcoin has gone from being a mere speculative mania to a potential risk to the economy. Futures contracts make is possible to engaged in levered speculation. The booms and busts that have had destructive real economy effects have involved borrowed funds, because the collapse blows back to lenders, who almost without exception have intertwined relationships with other lenders and/or the payments system.
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The real consequences of CoCo issuance: A first comprehensive analysis – Stefan Avdjiev, Bilyana Bogdanova, Patrick Bolton, Wei Jiang, Anastasia Kartasheva
22 december
The promise of contingent convertible capital securities as a bail-in solution has been the subject of considerable theoretical analysis and debate, but little is known about their effects in practice. This column reviews the results of the first comprehensive empirical analysis of bank CoCo issues. Among other things, it finds that the propensity to issue a CoCo is higher for larger and better-capitalised banks, and that their issue result in statistically significant declines in issuers’ CDS spreads, indicating that they generate risk-reduction benefits and lower the costs of debt.
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What Mainstream Economists Get Wrong About Secular Stagnation – Servaas Storm
21 december
Forget the myth of a savings glut causing near-zero interest rates. We have a shortage of aggregate demand, and only public spending and raising wages will change that.
Nine years after the Great Financial Crisis, U.S. output growth has not returned to its pre-recession trend, even after interest rates hit the ‘zero lower bound’ (ZLB) and the unconventional monetary policy arsenal of the Federal Reserve has been all but exhausted. It is widely feared that this insipid recovery reflects a ‘new normal’, characterized by “secular stagnation” which set in already well before the global banking crisis of 2008 (Summers 2013, 2015).
This ‘new normal’ is characterized not just by this slowdown of aggregate economic growth, but also by greater income and wealth inequalities and a growing polarization of employment and earnings into high-skill, high-wage and low-skill, low-wage jobs—at the expense of middle-class jobs (Temin 2017; Storm 2017). The slow recovery, heightened job insecurity and economic anxiety have fueled a groundswell of popular discontent with the political establishment and made voters captive to Donald Trump’s siren song promising jobs and growth (Ferguson and Page 2017).
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***Next Phase in Forcing Biometric Tracking on Consumers – Don Quijones
23 december
Ironically, banks in Mexico lead the way.
In 2018, banks in Mexico will face new regulations that will oblige them to collect biometric data (finger prints and iris scans) on all of their customers. Whenever a customer asks for a new home or car loan, cashes in a paycheck, applies for a credit card or opens a new savings account, the bank in question will have to request the customer’s digital fingerprints and then match those fingerprints with data against information in the database of the National Electoral Institute.
Foreign-owned subsidiaries of global banks like BBVA and Citi are thrilled with the initiative arguing that it will help them combat identity theft. Most high street lenders in Mexico have already agreed to help build a single biometric database, says Marcos Martínez, president of Mexico’s Banking Association (ABM).
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X~X The economics of the Bitcoin payment system – Gur Huberman, Jacob Leshno, Ciamac C. Moallemi
16 december 2017
Cryptocurrencies have caught the attention of industry, academia, and the public at large. This column analyses an economic model of a cryptocurrency system featuring user-generated transaction fees, focusing on Bitcoin as the leading example. The Bitcoin system requires significant congestion to raise revenue and fund infrastructure or risk collapse in the long term. Moreover, the current design of the system – specifically the processing of large but infrequent blocks of transactions – makes it less efficient at raising revenue.
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China Admits To Fake Data (Again) – Hidden Debt & Inflated Revenues – Tyler Durden
23 december
It’s not the first time (and it won’t be the last), but a recent nationwide audit found some local governments inflated revenue levels and raised debt illegally, once again crushing China’s credibility on the global stage when it comes to economic performance.
As Bloomberg reports, ten cities, counties or districts in the Yunnan, Hunan and Jilin provinces, as well as the southwestern city of Chongqing, inflated fiscal revenues by 1.55 billion yuan ($234 million), the National Audit Office said in a statement on its website dated Dec. 8.
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X~X Bitcoin vs Fiat Currency: Which Fails First? – Charles Hugh Smith
11 december
What if bitcoin is a reflection of trust in the future value of fiat currencies?
I am struck by the mainstream confidence that bitcoin is a fraud/fad that will soon collapse, while central bank fiat currencies are presumed to be rock-solid and without risk. Those with supreme confidence in fiat currencies might want to look at a chart of Venezuela’s fiat currency, which has declined from 10 to the US dollar in 2012 to 5,000 to the USD earlier this year to a current value in December 2017 of between 90,000 and 100,000 to $1:
Exchange Rate in Venezuela:
On 1 December, the bolivar traded in the parallel market at 103,024 VED per USD, a stunning 59.9% depreciation from the same day last month.
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***What China Can Learn from America’s Great Depression – Richard M. Ebeling
22 december
When Murray Rothbard’s America’s Great Depression first appeared in print in 1963, the economics profession was still completely dominated by the Keynesian Revolution that began in the 1930s. Rothbard, instead, employed the “Austrian” approach to money and the business cycle to explain the causes for the Great Depression, and to analyze the misguided and counterproductive policies that were followed in the early 1930s, which, in fact, only intensified and prolonged the economic downturn.
To many of the economists in the early 1960s, Rothbard’s “Austrian” approach seemed out-of-step with the then generally accepted textbook, macroeconomic approach that focused on a highly “aggregate” analysis of economic changes and fluctuations on general output and employment as a whole. There was also the widely held presumption that governments could easily maintain economy-wide growth and stability through the use of a variety of monetary and fiscal policy tools.
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Globalisation may soon accelerate again – time to get domestic policies right – Richard Baldwin, Vesa Vihriälä
19 december
Despite the setbacks globalisation has faced in recent years from reactionary politics, the advent of artificial intelligence and robotisation are set to ensure its continuation. Domestic policy must therefore be designed in such a way as to reap the rewards of globalisation while avoiding its pitfalls. This column uses the case of Finland to show how this can be done. Finland has grown faster than its peers over two waves of globalisation, despite enduring substantial setbacks. In both its successes and challenges, it is an important example of the need for deliberate policies to prepare for future disruptions.
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X~X De-Homogenizing Cryptocurrencies – Demelza Hays
15 december
For the past month, Bitcoin has reached a new all time high every week. On December 11, Bitcoin reached it’s all time high of over $17,000 per coin. Bitcoin witnessed an impressive 1600% increase in value during the past year. The cryptocurrency market increased from $18 billion in January 2017 to over $475 billion in December. Bitcoin is going through the process of monetization and the cryptocurrency market is being financialized. Cryptocurrency credit cards, automatic teller machines, exchanges, over-the-counter markets, bank accounts, insurance, derivatives, and trading algorithms are available. CBOE Bitcoin futures launched last Sunday, the CME is launching this Sunday, and NASDAQ is expected to join in early 2018. However, the prices are rising too far too fast. Every asset class has ups and downs. If cryptocurrencies are really a new asset class, they must come down at some point.
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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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