If you cite inflation statistics these days you inevitably run into the same counterpoints from those who have long been predicting hyperinflation in the USA. And despite the fact that there are still no signs of hyperinflation (or even high inflation) in the US economy the hyperinflationists remain convinced that they will one day be right. One of the classic [...]
Special Reports
A LOOK INSIDE THE FED’S LIMITED TOOLKIT
By now, we all know that QE2 wasn’t all that effective in helping the economy. And after extraordinary measures, ZIRP, bank bailouts, endless loans, etc, some are saying that the Fed is completely out of bullets. Still, like a group of masochists, we are looking to Jackson Hole and Bernanke’s speech to shed some light on what the Fed [...]
THE INNOVATION INITIATIVE
Let’s leverage our greatest resources and understanding of the monetary system in an effort to unleash a whirlwind of innovation of the likes that mankind has never witnessed before.
QUANTITATIVE EASING 3 – ANOTHER MONETARY NON-EVENT?
Yesterday’s stock surge off the lows was attributed to comments by several Fed officials who said they are now in favor of the Fed implementing QE3 if the economy continues to deteriorate. I think it would be useful to review what QE2 did and what it did not do. Now, before we begin it’s important to understand that markets are [...]
WHY THE BALANCE SHEET RECESSION WILL NOT LAST AS LONG AS JAPAN’S
In a recent story I pointed out that Richard Koo said it was not significant that the USA has been faster to respond to the current balance sheet recession. Now, he was primarily referring to the ineffectiveness of monetary policy during a balance sheet recession and the fact that it doesn’t matter how quickly you cut rates or implement QE [...]
WHY WE BELIEVE WE ARE IN A SECULAR BEAR MARKET
Looking back at the long history of the U.S. stock market it is clear that there are long periods when the trend is distinctly up or down. We call these long trend “secular” markets as opposed to the commonly-known cyclical market trends that last about four years on average. In our view we are currently in a secular bear market that began when the market peaked over 11 years ago in early 2000.
THE BALANCE SHEET RECESSION CONTINUES
This may very well be the most important data point that we are currently receiving every quarter. Yesterday’s Z1 released by the Federal Reserve showed a continuing decline in household credit. The latest reading showed a -2% decline in total household debt growth versus last year. The Fed summarized the data: “Household debt declined at an annual rate of [...]
DOW 20,000? NOT ANYTIME SOON
This past week, as I watched our recent predictions about economic weakness and a market correction
unfold in front of me, I ran across the James Altucher article entitled “Next Stop: Dow 20,000 –10 reasons why the market will soar.” I am always intrigued by the never ending optimism that abounds in most market journalists but James Altucher is no slouch so it really got my attention.
CREATIVE DESTRUCTION AND FINANCE
Joseph Schumpeter is famous for coining the phrase “creative destruction”. He described it as a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” This is a necessary component of capitalism. The strong survive and the weak die. A new paper out of the University of Alberta [...]
BUFFETT’S “SILLY TALK” ABOUT THE U.S. DEBT
* This post was written in 2011 before Mr. Roche founded Monetary Realism, a post-MMT school that was formed due to several disagreements Mr. Roche and many other former MMT proponents had with the school of thought. For more info on the difference in views please see here. For more on MR’s views please see here. Some pundits are unhappy with the [...]
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