201709.25
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Distinct Lack of Good Faith

The erosion of social order in any historical or geographic context is gradual; until it isn’t. Germany has always followed a keen sense of this process, having experienced it to every possible extreme between the World Wars. Hyperinflationary collapse doesn’t happen overnight; it took three years for the Weimar mark to disintegrate, and then Weimar…

201709.08
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The Real Euro Watch

Everyone is now a euro watcher. The European common currency’s exchange value against the dollar has been on the rise, to put it mildly. Despite decades of declaring floating currencies the optimal framework, it really is quite entertaining to watch the furor when these things actually float one way or the other. This recent trend…

201708.25
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What the ‘Rising Dollar’ Accomplished (Apart From That ‘Unexpected’ Global Downturn)

Many if not most people were looking at Janet Yellen’s Jackson Hole speech hoping for some hint or clue as to her “hawkishness” or “dovishness.” As I’ve written before, that’s the wrong to look at the Federal Reserve and its policy. They want to raise rates simply because it’s been one hundred and nineteen months…

201708.21
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Being Rational

In April 2011, the European Central Bank’s staff and Governing Council were all optimistic. They had suffered through the panic and Great “Recession” and then the relapse in 2010 that birthed the term PIIGS. Despite all that and with considerable effort on their part (especially the purchasing of bonds), they thought there was reason to…

201708.21
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Weight Of Recovery

In 1871, W. Stanley Jevons in the preface to his book The Theory of Political Economy writes of a fundamental human issue with Economics. He makes a distinction between it and other sciences which do not suffer, as he said a century and a half ago, “the weight of authority.” Finding such words from so…

201708.07
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Irreführende Statistiken

Germany’s Federal Statistical Office (DeStatis) reported today disappointing figures for Industrial Production. The seasonally-adjusted series fell in June 2017 month-over-month for the first time this year, last declining in December 2016. The index had been on a tear, rising nearly 5% in the first five months of this year. The move was considered by many…

201707.31
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Policy From Behind

When the Mario Draghi as head of the ECB first introduced negative rates in early June 2014, his reasoning was very clear. As he said in the opening of his statement imposing NIRP on Europe, “Today, we decided on a combination of measures to provide additional monetary policy accommodation and to support lending to the…

201707.31
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Islands In The Sun: European Inflation & Unemployment

Inflation in Europe was in July 2017 once again underwhelming. Eurostat’s HICP inflation index grew at a 1.3% annual rate for the second straight month. Other than for February 2017, the inflation rate has been less than the ECB’s 2% target for four and a half years. During that time, Europe’s central bank has vastly…

201707.26 1

Draghi Did Not Keep His Promise

It is like a great many things forgotten now, but five years ago today the head of the ECB compared Europe to a bumblebee. That’s not quite right, however, as Mario Draghi really said the euro was like a bumblebee, but you’d be forgiven for mixing the two up. The purpose of his folksy analogy…