201706.26
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Weird Obsessions

People often ask why I care so much about China. In some ways the answer is obvious, meaning that China is the world’s second largest economy (the largest under certain methods of measurement). Therefore, marginal changes in the Chinese economy are important to understanding our own global situation. But it goes much deeper than that….

201705.18
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Why JPY?

One of the most prominent features of the “rising dollar”, if not the “rising dollar” itself, was an almost out of control shortage in FX basis. Though cross currency basis swaps with Japan received all the attention, with very good reason, the basis was off against the euro, franc, and a host of other majors….

201704.24
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To The Asian ‘Dollar’, And Then What?

The Bretton Woods system was intentionally set up to funnel monetary convertibility through official channels. The primary characteristic of any true gold standard is that any person who wishes can change paper claims into hard money. It was as much true in any one country as between those bound by the same legal framework (property)….

201610.26
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What Progress Does Not Look Like

It is a long road to recovery, an actual one, if we are to be left to the pace of economists struggling to make sense of the analog world. They are truly digital creatures, who would look at information and make no judgment until the models tell them what to think. You or I would…

201608.02
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It Was All A Dream

Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of…

201607.11
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Magic Number Bias

As an outsider, it is difficult to gain the pulse of Japanese politics. Viewing it all only from an economic or financial perspective is immediately too narrow. There is far more than just Abenomics at stake, though Prime Minister Abe used the crutch of Abenomics’ failure so far as somehow a benefit. There are other…

201607.06
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End All The Myths; They’re Almost Done Anyway

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have…

201606.21
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Re-investigating The Simple Assumptions

In February 1999, the Bank of Japan announced that its call money rate would be zero “until deflationary concerns subside.” Other than a temporary shift in 2001 and 2006, deflationary concerns remain. How effective was monetary policy? That point has been partially answered by the introduction of QE over and over and over again. The…

201606.20
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The European Basis For New Monetary Science

Looking back it almost sounds like a completely different world. In the end, however, the world hasn’t changed, perceptions have. On May 10, 2012, German newspaper Spiegel reported that Bundesbank’s (Germany’s central bank) chief of its economics department, Jens Ulbricht, testified in the German parliament that German inflation was likely to be, “somewhat above the…

201606.14
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Rationalizing ‘Rational’

Walter W. Heller was said to have been an “educator of Presidents.” As an economist and Presidential advisor in the inner circles of DC, Heller worked with more candidates and officeholders than perhaps any other man. As he himself described, his influence went all the way back to Adlai Stevenson and kept on through Kennedy,…