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Why the Market’s Ignoring the No. 1 Threat to Stocks Investors who fled in fear over potentially massive tax increases associated with the “fiscal cliff” have barely broken a sweat over corresponding spending cuts that are only two weeks away. The so-called sequestration of $110 billion a year in discretionary spending will happen March 1 if Congress does not come to an agreement. With little indication that Washington is anywhere near a compromise [...] jessescrossroadscafe.blogspot.com “Well, the trillion-dollar-coin thing — deal with the debt ceiling by exploiting a legal loophole to have the Treasury mint one or more large-denomination coins, deposit them at the Fed, and use the cash in the new account to pay bills — has really taken off. Last month I spoke with a senior Fed official who had never heard of the idea; these days it’s all over. [It has been around [...] We talk to Stephanie Kelton, Chair of the Economics department at University of Missouri-Kansas City, about the economics behind Modern Monetary Theory (MMT).
Moments ago, the Fed released its latest Z.1, aka the Flow of Funds, which is the primary source of information of that one component of modern finance which all modern economists continue resolutely to ignore because it blows all their anachronistic theories on monetary theory out of the water: shadow banking data. But more on that later. for now, here is the graphic summary of that most important of conventional data [...] It may appeal to the devotees of Modern Monetary Theory, but for us mere simpletons, it doesn’t pass the most basic of stink tests. The logical extension of its premise is that sovereign central banks can just merrily issue debt ad infinitum, that we all live off the waves of liquidity that result, and if the shit hits the fan, the ECB/Fed/IMF/ FAIRY GODMOTHER will step in and save the day [...] telegraph.co.uk All key indicators of China’s money supply are flashing warning signs. The broader measures have slumped to stagnation levels not seen since the late 1990s. By Ambrose Evans-Pritchard, International business editor 6:32PM BST 13 May 2012 Narrow M1 data for April is the weakest since modern records began. Real M1 deposits – a leading indicator of economic growth six months or so ahead – have contracted since November. They are shrinking faster that at any time [...] By Scott Silva Editor, The Gold Speculator
Today, there are new reports that the Federal Reserve is planning to inject more cash into the ailing economy though another round of Quantitative Easing (QE3). You have read in these pages before that More QE is on the Way (1-22-13, The Gold Speculator). The new bond-buying program would be “sanitized” by coincident selling of short-term instruments in an effort to control increased inflation that would result from [...] Saturday quiz – January 21, 2011 – answers and discussion Posted on Sunday, January 22, 2012 by bill Here are the answers with discussion for yesterday’s quiz. The information provided should help you understand the reasoning behind the answers. If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application [...] While the liabilities can in theory keep rising for ever within EMU, they signal grave imbalances, such as the North-South trade gap so long ignored until it proved fatal. They ultimately leave debtor central banks deep under water if the eurozone breaks up. “We are in unknown territory in terms of monetary theory,” said Mr Dor.
“We are in unknown territory in terms of monetary theory,” said Mr Dor. Maybe not: terra incognita has [...] David Stockman concludes his two part series on Crony Capitalism (part one here) with this scathing take down of the Federal Reserve. Hopefully this is nothing new to anyone at this point… First posted in Marketwatch. The destructive result of the Federal Reserve’s earlier housing and consumer credit bubble became the excuse for embracing a destructive zero interest rate policy which is self-evidently fueling even more destruction. This destruction [...] This administration can only hope to spend 10% of GDP from borrowed money to get 2-3% growth. The depression we are in and which will be much worse in a few months to two years, is rooted in decades of bad policies based on flawed economic and monetary theory. We used debt and inflation and spending to end recessions and all that did was make more jobs dependent on government spending. [...] It is what happens when you don’t deal with problems when they are small. These policies that now have us bankrupt were passed decades ago when we were a high growth nation and thought the gravy train would never end. Unlike Norway that looks decades into the future and saves oil revenues in an investment fund ($300 billion in the fund now), and will fund many of their social programs for [...] |
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