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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Do “Unconventional” Monetary Policies Work? – Philip Arestis, Malcolm Sawyer
27 juli
The “unorthodox” Quantitative Easing (QE) monetary measures, along with another “unorthodox” monetary policy, namely negative interest rates, have been implemented by a number of countries in the years following the global financial crisis. This is as a result of the normal policy monetary instrument, the rate of interest, being reduced to nearly zero by a number of central banks. We discuss these measures but most importantly we discuss the extent to which they have been successful in terms of their targets.
QE includes two types of measures: (i) one is “conventional unconventional” measures, whereby central banks purchase financial assets, such as government securities or gilts, which boost the money supply; (ii) another is “unconventional unconventional” measures; in this way central banks buy high-quality, but illiquid corporate bonds and commercial paper. The purpose under both measures is not merely to increase the money supply but also, and more importantly, to increase liquidity and enhance trading activity in these markets.
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***Central Bankers are Driving Us All Into the Dirt – Harry Dent
29 juli
The Great Unwind has started.
One of the major triggers I’ve been warning about is already happening, even before we understand and/or admit that we are in a recession.
Global corporate debt now sits at a record $51 trillion and is poised to hit $75 trillion by 2020 – just four years away. If interest rates rise and the economy slows, it will be very hard for companies to roll these bonds over – and then we get what S&P Global Ratings is calling “Crexit.”
The bond markets dry up for corporate lending, especially higher-yield junk bonds. This would set off a chain of corporate defaults and bankruptcies that would cause central banks to start to lose control of the economy, as they did in 2008 forward.
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Why a “Dollar” Should Only Be a Name for a Unit of Gold – Frank Shostak
25 juli
Prior to 1933, the name “dollar” was used to refer to a unit of gold that had a weight of 23.22 grains. Since there are 480 grains in one ounce, this means that the name dollar also stood for 0.048 ounce of gold. This in turn, means that one ounce of gold referred to $20.67.
Now, $20.67 is not the price of one ounce of gold in terms of dollars as popular thinking has it, for there is no such entity as a dollar. Dollar is just a name for 0.048 ounce of gold. On this, Rothbard wrote,
No one prints dollars on the purely free market because there are, in fact, no dollars; there are only commodities, such as wheat, cars, and gold.
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*** Why Real Reform Is Impossible: We Can’t Believe the Mighty Titanic Could Actually Sink – Charles Hugh Smith
26 juli
Unfortunately for those partying on the upper First Class decks, they are as doomed as the steerage passengers when the ship goes down.
Why did passengers remain on the Titanic even as its bow sank deeper into the ice-cold Atlantic? They believed the experts and authorities because they wanted to believe the ship was “unsinkable.” And why did they want to believe the ship was “unsinkable”?
Two visceral realities fueled their misplaced faith in the ship’s supposed safety:
1) The warm ship seemed so mighty, and the alternative–open lifeboats drifting in the dark cold night–seemed so vulnerable, uncomfortable and risky.
2) It was much easier to believe the experts’ assurances that the ship was safe than it was to clamber into a small lifeboat and bob around the open Atlantic.
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Stocks Were Already Crashing the Last Two Times this Happened. So What Gives? – Wolf Richter
26 juli
The foundations have crumbled. All bets are off.
Over the last 20 years, margin debt – when investors buy stocks with borrowed money – went through three multi-year run-ups, each topped off with a spike, followed by a reversal and decline: during the final throes of the bubbles in 2000 and 2007, each followed by an epic stock market crash – and now.
That pattern of jointly soaring and then declining margin debt and stocks even occurred during the run-up and near-20% swoon in 2011.
The grand cycle began in February 2009, at the trough of the Financial Crisis, when margin debt had dropped to $200 billion. It was followed by a multi-year record-breaking run-up, topped off with a spike that culminated in an all-time peak of $507.2 billion in April 2015. Then margin debt reversed and began to decline. On cue, the stock market began to decline a month later. Margin debt zigzagged lower, and stocks did too. But in February this year, stocks suddenly bounced off sharply – without margin debt.
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The Single Supervisory Mechanism and multinational banks – Giacomo Calzolari, Jean-Edouard Colliard, Gyöngyi Lóránth
30 juli
The presence of multiple national authorities in the EU poses substantial coordination problems for the supervision of multinational banks. The Single Supervisory Mechanism aims to solve the resulting coordination failures. This column explores how banks could strategically react to the introduction of a supranational supervisor. The banking system is likely to endogenously react by reverting to an organisational form for which supranational supervision is actually less essential.
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Why We Need Profits – Jakub Bozydar Wisniewski
27 juli
Monetary profit isn’t the only kind of profit, and people may do many things for psychic profit. Nevertheless, in a complex and industrialized world, monetary profit is essential in building sustainable economies.
It is relatively easy to understand and appreciate the benefits of direct cooperation. The value of familial gift-giving, mutual help between friends, and barter exchange is typically obvious enough even to the economically untrained mind. However, as social cooperation reaches ever more complex levels, its character becomes increasingly abstract, and, in intellectual terms, its proper appreciation becomes increasingly demanding.
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How Much Do Shady Financial Practices Cost You, Exactly? – Lynn Parramore
22 juli
Average U.S. household loses over $100,000 to destructive activities of bankers and financiers
America’s financial system is broken for all but a few at the top — that much is plain. The rest sense that we are stuck on the minus end of some great financial formula, but given the complexity and size of Big Finance, it’s hard to pin down exactly why it happens and how it all adds up.
Enter economist Gerald Epstein of the University of Massachusetts, Amherst. He has dived in and crunched the numbers, and the results are eye-popping. Epstein and his colleague Juan Antonio Montecino look at exactly how families, taxpayers and businesses get ripped off by dubious financial activities and tally up the costs in a new paper for the Roosevelt Institute, “Overcharged: The High Cost of Finance.” (The Institute for New Economic Thinking has also supported several papers by Epstein).
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Are Advertising “Bribes” Unethical? – Matthew McCaffrey
25 juli
Wherever there are entrepreneurs finding new ways to earn money, it’s a safe bet government regulators won’t be far away. So it is with the online entrepreneurs known as “influencers.” Internet personalities like PewDiePie build enormously successful businesses using little more than a microphone and some video equipment, and naturally, government isn’t going to stand for that.
Consequently, the Federal Trade Commission is cracking down on undisclosed sponsorship deals between video game developers and the online influencers who play and review their products. The FTC claims that some influencers failed to properly disclose their financial relationships, which in turn deceived viewers, who were unaware of possible conflicts of interest. I’ve discussed the economic implications of these cases elsewhere, so here I’ll focus on some of the ethical issues.
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Back in work, still out of pocket: Labour market recovery since the Great Recession – Stefano Scarpetta, Mark Keese, Paul Swaim
25 juli
The labour market recovery in OECD countries has been steady but slow since the Great Recession. More worrying is the fate of wage growth over the same period. This column assesses the implications of stagnation in the labour market for growth, wages, and inequality. It finds that structural weaknesses in labour market performance have become more visible as markets recover from the Great Recession. The policy response must include macroeconomic policies aimed at strengthening investment, and structural policies to support growth while nudging workers towards higher-skilled jobs.
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Gold Now in a Sustained, Structural Bull Market; On Average, History Suggests ~175% Incremental Upside – Brandon J. Ferro
29 juli
The last time we discussed gold on the site was a few weeks back in this post; therein we suggested a break-down in USDZAR was at hand and that should history hold, it would help propel and/or coincide with additional upside in the metal.
However, the above was merely a tactical, nearer-term call.
Strategically, it’s been even longer since we updated our longer-term framework for gold. In fact, it’s been three months since we did that in this post. In that May piece we suggested the metal continued to track favorably vs. our bullish expectations, but in the near-term it faced a major test having rallied nearly +25% off its Dec-15 low, a historical demarcation point whereby cyclical retracement rallies were either snuffed out with a resumption of a secular bear beginning afresh, or, the same moves continued higher, indicative of a new secular bull being underway.
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Did Debt Exist Before Money? It Doesn’t Matter – Michael V. Szpindor Watson
25 juli
Did credit precede money? Maybe. Does it matter? Nope.
One hundred years ago A. Mitchell Innes rejected the standard story on the origins of money, whereby money spontaneously emerged as barter became progressively costly with the increasing division of labor and greater abundance of goods on the market. Money was the solution to the costliness of barter: a common medium of exchange was used, rather than searching for another person with the thing you wanted who also wanted the thing you wanted to trade. Today Innes’ argument is most popularly championed in David Graeber’s book Debt: The First 5,000 Years. The debate between Mengerians and Innesians has resulted in several published books and exploded onto the blogosphere where Bob Murphy (here, here, here), George Selgin (here, here), David Henderson (here), and Brad DeLong (here) attack David Graeber’s book, with responses from the proponents of Innes.
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Waarschuwing! Onderstaande link leidt naar een volledig essay in Pdf.
Macro-Finance – John H. Cochrane
28 juli
Macro-finance addresses the link between asset prices and economic fluctua-
tions. Many models reflect the same rough idea: the market’s ability to bear risk
varies over time, larger in good times, and less in bad times. Models achieve this sim-
ilar result by quite different mechanisms, and I contrast their strengths and weak-
nesses. I outline how macro-finance models may illuminate macroeconomics, by
putting time-varying risk aversion, risk-bearing capacity, and precautionary savings
at the center of recessions rather than variation in “the” interest rate and intertem-
poral substitution. I emphasize unsolved questions and profitable avenues for re-
search.
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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.