billy blog Mon 2010-09-20 09:39 EDT

The consolidated government -- treasury and central bank

...The notion of a consolidated government sector is a basic Modern Monetary Theory starting point and allows us to demonstrate the essential relationship between the government and non-government sectors whereby net financial assets enter and exit the economy without complicating the analysis unduly. This simplicity leads to many insights all of which remain valid as operational options when we add more detail to the model...the mainstream macroeconomics obsession with central bank independence is nothing more than an ideological attack on the capacity of government to produce full employment which also undermines our democratic rights...The vertical transactions which add to or drain the monetary base that I have outlined here are transactions between the government and the non-government sector... These transactions are thus unique -- they change net financial assets in the economy. All the transactions between private sector entities have no effect on the net financial assets in the economy at any point in time...

Billy Blog; central bank; consolidated government; Treasury.

Mon 2010-05-24 10:11 EDT

Hussman Funds - Weekly Market Comment: Don't Mess with Aunt Minnie - May 24, 2010

John P. Hussman

...Last week, we observed an Aunt Minnie featuring a collapse in market internals that has historically been associated with sharply negative market implications....Treasury Secretary Eddie Haskell/Timothy Geithner has scheduled a trip to Europe this week to urge European leaders "to pay better attention to potential market reactions to policy moves, and to accelerate the European rescue program." This promises to be a fiasco. What could European leaders possibly find more arrogant than to be lectured on bailout policy - not simply by the U.S., but specifically by a one-trick pony bureaucrat whose chief trick is the ability to smoothly talk the language of prudence while simultaneously pillaging the fiscal stability of an entire nation for the benefit of bondholders who made bad loans?...Providing Greece (and possibly some of its neighbors) a graceful exit from the Euro requires greater courage but lower ultimate cost - particularly to the citizens of Greece itself - than a policy of forcing heavy austerity, dislocations, and internal deflation within Greece. The effect of austerity policies will be to damage the revenue side of the Grecian economy enough to leave the deficits little changed in any event. One would like to go back a decade in time and choose different policies that would have allowed Greece to maintain the Maastricht deficit limitations, but it is far too late to push a full-grown genie back into an itty-bitty bottle...

2010; 24; Aunt Minnie; Hussman Funds; Mess; weekly market comments.

Wed 2010-05-19 11:53 EDT

billy blog >> Blog Archive >> When you've got friends like this ... Part 2

Part 2 in a series I am running about the propensity of self-proclaimed progressive commentators and writers to advance arguments about the monetary system (and government balances) which could easily have been written by any neo-liberal commentator. The former always use guarded rhetoric to establish their ``progressive'' credentials but they rehearse the same conservative message -- the US has dangerously high deficits and unsustainable debt levels and an exit plan is urgently required to take the fiscal position of the government bank into balance. In doing so, they not only damage the progressive cause but also perpetuate myths and lies about how the monetary system operates and the options available to a currency-issuing national government...

Billy Blog; blogs Archive; friends; Part 2.

Wed 2010-05-19 11:52 EDT

billy blog >> Blog Archive >> When you've got friends like this ... Part 1

...I am forming the view that many so-called progressive economic think tanks and media outlets in the US are in fact nothing of the sort...Today I read two position pieces from self-proclaimed progressive writers which could have easily been written by any neo-liberal commentator. True, the rhetoric was guarded and there was talk about needing to worry about getting growth started again -- but the message was clear -- the US has dangerously high deficits and unsustainable debt levels and an exit plan is urgently required to take the fiscal position of the government bank into balance. Very sad...since when has the progressive agenda consisted of worrying about deficit reduction as a policy aim? Placing a focus on some specific targetted deficit outcome will almost always lead a policy maker astray in a modern monetary economy. It is not a progressive position...

Billy Blog; blogs Archive; friends; Part 1.

Tue 2010-04-20 10:58 EDT

Get the Yuan Right, Prove Pundits Wrong: Hype over an 'imminent' increase in yuan value ignores China's greater need for higher interest rates and fewer bubbles

Andy Xie

Unless China exits its economic stimulus quickly, the nation's inflation rate could rise to double digit levels sooner than many expect. The right sequence of events for a proper response to inflation would be to raise interest rates and then, if necessary, move the yuan exchange rate. But acting on the currency first, especially in small steps, would further inflate China's property bubble and inflation, potentially leading to a major economic crisis in two years. A small increase in the yuan's value would fail to resolve two pressing problems: inflationary pressure at home, and political pressure from the United States. Moreover, a small appreciation would attract hot money, stoking inflationary pressure...

bubble; higher interest rate; hype; imminent; increased; proving pundits wrong; Yuan right; yuan value ignores China's greater need.

Jesse's Café Américain Tue 2009-12-01 10:06 EST

Morgan Stanley Fears UK Default in 2010

Jesse

As you may recall we are bears on sterling, and view the UK as the Iceland of the G20.The monetary policies of the Bank of England were as bad as those of the Greenspan - Bernanke Fed. The difference is that the UK does not hold the world's reserve currency as a captive source of revenues. As an aside, we see that Bank of England advisor and economic franc-tireur Willem Buiter has decided to seek greener pastures as chief economist with Citi in the States. Timely exit. Bravo, Willem.

2010; Jesse's Café Américain; Morgan Stanley Fears UK Default.

TraderFeed Sat 2009-10-10 13:48 EDT

Quick Look at TIPS and Beyond

Brett Steenbarger, Ph.D.

U.S. Treasury Inflation-Protected Securities (TIP; above) are making multi-month highs, amidst the weak dollar and strong gold. I've noticed a tick up in inflation talk among traders as well. With unemployment--not inflation--making the headlines, the Fed hardly has the political cover to begin serious talk of rate increases. With the Reserve Bank of Australia hiking rates, however, there are concerns that we are just a bit closer to the long-awaited exit from monetary ease. Meanwhile, higher Aussie rates only fuel the carry trade that has traders selling U.S. dollars and finding higher yielding alternatives elsewhere.

quick look; tip; TraderFeed.

Tue 2009-04-21 00:00 EDT

naked capitalism: Fed Rescue Programs: No Exit?

exit; Fed Rescue Programs; naked capitalism.

Mon 2008-06-23 00:00 EDT

naked capitalism: Bond Insurers Seeking to Exit $125 Billion of Credit Default Swaps

125; bond insurer seeks; Credit Default Swap; exit; naked capitalism.

Tue 2008-06-17 00:00 EDT

Mish's Global Economic Trend Analysis: Exxon Exits Retail Gas Business

Exxon Exits Retail Gas Business; Mish's Global Economic Trend Analysis.

Thu 2007-12-27 00:00 EST

Money Matters: Free Trade Rammed Down Our Throats

by Elaine Meinel Supkis; Japanese carry trade "flood of money exiting Japan is the root cause of the coming equity collapse"

Free Trade Rammed; money matters; throat.

Thu 2007-09-13 00:00 EDT

US Heads for Recession as Foreign Investors Rush for the Exit from US Dollar Holdings :: The Market Oracle :: Financial Markets Forecasting & Analysis Free Website

US Heads for Recession as Foreign Investors Rush for the Exit from US Dollar Holdings, by Mike Whitney; The Market Oracle

Analysis Free Website; dollar holdings; exit; Financial Markets Forecasts; Foreign Investors Rushing; Head; Market Oracle; Recession.

Thu 2007-05-03 00:00 EDT

Democracy Now! | Chalmers Johnson: "Nemesis: The Last Days of the American Republic"

Democracy Now! | Chalmers Johnson: Nemesis: The Last Days of the American Republic; "one of the reasons we had no exit plan from Iraq is that we didn't intend to leave"

American republic; Chalmers Johnson; day; Democracy; nemesis.