School Is Out In Japan
The operative theory behind QE relates to the academic exercise of overcoming the real world constraint of nominal interest rates, called the zero lower bound (ZLB). Once the offending central bank has pushed rates to the ZLB, conventional monetary science posits only extraordinary means to overcome this limitation. After all, central banks cannot be impotent .. read more
This Is What It Sounds Like, When Doves Cry
When even Eric Rosengren, Boston Fed President, is thinking about “tapering” you know something is a tad askew in FOMC-land. Again and again, these doves (including Charles Evans at the head of the Chicago Fed branch) had advocated the heaviest of hands of monetary intervention. QE 3 & 4 could not have been big enough .. read more
Greenspan’s Market Persists
I wanted to concur but take Joe’s weekend proposition in a slightly different direction. I think it is relatively clear that the Federal Reserve and Chairman Bernanke are intentionally hinting at “tapering” QE purchases in order to “talk the market down”. There are a lot of similarities between the monetary communications right now and 1996 .. read more
Confessions Of A Gloomy Gus
I have recently been accused of being a paid up member of the gloom and doom club. Well, actually accused might be too strong; informed is probably more accurate. I don’t spend a lot of time thinking about how these weekly missives might be perceived but based on recent feedback the perception out there seems .. read more
The Proper Perspective on Jobs and Income
The headline employment growth for May 1974 totaled 165,000 jobs. That followed a weaker report from April where only 89,000 new jobs were created. Only a few months before, the headline beancount of job quantity was 304,000. For the seven months between November 1973 and May 1974, the headline averaged +135,000. That was notable because .. read more
Sunday Gold Fix – The Gold Crash of ’75
The tendency of mainstream economists toward hostility and outright dismissal of gold is directly related to their view of monetary mechanisms that largely took over in the 1970’s. For the most part, gold acts as a very visible measure investment of disapproval of central bank actions intended to foster or create stability. Inflation is only .. read more
Batten Down The Hatches
Back in November I wrote a weekly commentary that I called Looking For Silver Linings. The market had been taking a beating in the post election period and I wasn’t feeling particularly good about my forecasting skills. I had written a commentary just two weeks before arguing that the election really didn’t matter that much .. read more
The Joyless Street
By Brian Cronin In striking a blow for democracy, it looks like the preliminary decision of the German Constitutional Court has had an effect on other nations signing on for the permanent bailout fund, the European Stability Mechanism. You will recall the court said that any change to the upper limit of Germany’s commitment (€190 .. read more
