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abenomics

China Profoundly Disagrees With FOMC Assessments

By |2014-09-17T15:16:31-04:00September 17th, 2014|Economy, Federal Reserve/Monetary Policy|

With Brazil in recession and much of the “resource” part of the supply chain nearing that or worrying about it, you can surely bet that there are “unexpected” problems in the Chinese economy. As much as the word “decoupling” is being used once again (though in 2008 it was reversed, with the world supposedly able to decouple from US weakness) [...]

Seven Years Without Trend and the Clock Is Ticking

By |2014-09-03T17:59:22-04:00September 3rd, 2014|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They say the road to hell is paved with good intentions, but that is not the only ingredient in the asphalt used to make the highway to Perdition. Typically, intent is augmented (or actually degraded) by a degree of incompetence that masquerades as complexity. The breadth of that observation is staggering in the current circumstances as Japanification has seemingly gained [...]

Pity Japan

By |2014-07-24T10:43:46-04:00July 24th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I have little doubt that the most perverse aspect of orthodox economics is the idea of monetary neutrality. Taken as nothing more than an article of faith, monetary practitioners use the principle as cover to undertake drastic and blunt intrusions into markets and economies, with no guilt over having done so because they can simply invoke neutrality and proclaim some [...]

Japan Gets What It Wanted

By |2014-07-07T16:25:46-04:00July 7th, 2014|Economy, Markets|

Even though this was released last week, I place a great deal of importance on earned income as an economic indicator so I wanted to mention it anyway. A healthy economy will produce healthy wage gains because work is the basic exchange that creates wealth. Actual, productive wealth is the foundation for long-term economic expansion, of the sustainable kind, so [...]

Draghi Hiding A Small Course of Abenomics?

By |2014-06-04T15:24:15-04:00June 4th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The ECB is widely expected to cut rates again tomorrow, and may include a program to “encourage” securitization of loans to small and medium businesses (SME). For now, the idea is to reduce the “drag” on Europe’s purported recovery, as, once again, the central banking regime turns to debt as the one and only solution. As I noted last week, [...]

Cruel Trick of Revisions

By |2014-04-01T15:37:36-04:00April 1st, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

I suppose there is some cosmic and ultimately cruel irony to the fact that the new release of wage data in Japan happened today, April Fool’s Day. All the hopes that were pinned on last month’s positive reading in scheduled wages, the permanent income component, were flushed down the memory hole of statistical revisions. For a fleeting moment, Abenomics had [...]

Shoveling Fleas

By |2014-03-28T10:04:01-04:00March 28th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is a tendency of the modern age (post-modern) to disregard conventions of the past as mere anachronisms suited only to academic curiosity about how people lived in less “civilized” times. There is much to be said about that impulse, not the least of which is the caution of such hubris. In seeking out history you often find that those [...]

Asian Titanic

By |2014-03-19T16:33:30-04:00March 19th, 2014|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I think it is very clear that the Bank of Japan is becoming more and more sensitive to swings in the Japanese stock market. Policy pronouncements, toothless as they usually are, seem to correlate very well with downturns in stock prices. Perhaps some of the Federal Reserve literature is making its way East. There were no doubts, none whatsoever, last [...]

Follow Up On Japan

By |2014-03-04T12:59:10-05:00March 4th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I have been pointed toward an alternate explanation for what I described as Japan’s potential tipping point. Scott Sumner (and others) is arguing that the tremendous increase in importation of goods into Japan is a sign Abenomics is actually working. His reasons relate to the orthodox idea of a “demand shock”, ostensibly how he classifies the yen devaluation, triggering what amounts [...]

The Veil Slips Again

By |2014-02-06T12:26:57-05:00February 6th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

QE’s hope is that in the course of redistribution any spurt of temporary activity caused by such monetary deck shuffling will lead to follow-on activity (the cult of aggregate demand). As we see in the US, the redistribution appears to have had the reverse effect, including effects on global trade. In Japan, the other nation so fully devoted to QE, [...]

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