Category Archives: Uncategorized
Technical Notes for ‘Banking Buffoonery’
This is an appendix to our earlier post, “Banking Buffoonery, Modeling Mysticism and Why Krugman Should Be Sweatin’ Bullets.” We discuss the Bank of England report and IS-LM model in more detail, using a Q&A format.
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Tagged Austrian economics, Bank of England, Detlev Schlichter, endogenous money, Frances Coppola, IS curve, IS-LM, monetary base, Paul Krugman, Pieria
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Banking Buffoonery, Modeling Mysticism and Why Paul Krugman Should Be Sweatin’ Bullets
We have a few things to say about the recent debunking of established monetary theories. In case you missed it, the Bank of England issued a report in March explaining that standard textbooks get money and banking all wrong. The … Continue reading
Technical Notes for ‘3 Underappreciated Indicators’
This is an appendix for our earlier post, “3 Underappreciated Indicators to Guide You through a Debt-Saturated Economy.” We’ll share a few extra charts and describe our use of the Fed’s flow of funds data, in Q&A format.
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Tagged bank-created money, credit market instruments, government deficits, monetary policy, monetary targeting, money supply aggregates, money supply growth, money supply targeting, net bank lending, non-money savings, personal savings rates, personal sector
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3 Underappreciated Indicators to Guide You through a Debt-Saturated Economy
If you’re my generation or older, you may remember taking the original Pepsi Challenge – the Coke versus Pepsi taste testing booths that you would find at sporting events, fairs and similar venues. I took the Challenge and stuck with … Continue reading
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Tagged Austrian business cycle theory, bank balance sheets, Chicago Plan, creeping inflation, current account deficits, debt ratios, economic volatility, fractional reserve, Great Inflation, mainstream economic thought, money printing, non-money savings, Pepsi challenge, personal savings rates, public deficits, quantitative easing, recession indicators, risky borrowing, vicious loop, virtuous loop
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Is This What a Credit Bubble Looks Like?
There’s been some buzz recently about a pick-up in business lending. The six largest banks increased business loans at an average annual rate of 8.5% in the first quarter, according to a Wall Street Journal report last week. Other first … Continue reading
Bulls vs. Bears: Some Profit Margin Stories Are Better Than Others
[M]argins have been rising smartly–faster than Greenspan can ever recall. His only explanation: productivity… Greenspan argues that the U.S. is undergoing a productivity revolution not seen since early this century… In the longer term, he’s betting that as the world … Continue reading
Message to the Fed: Here Are a Few Things That You Can’t Do
[A]sset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of … Continue reading
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Tagged business fixed investment, capital expenditures, corporate cash, credit market liabilities, disposable personal income, financial obligation ratio, FOMC statement, household debt service, household financial obligations, housing boom, job creation, monetary intervention, mortgage demand, mortgage rate spread, net business debt, personal income, wealth effects
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Did Today’s Flow of Funds Report Predict the Fed’s Next Confession?
In return for speaking fees reported to be “at least” $250,000, Ben Bernanke confessed a few of the Fed’s missteps while speaking to guests of the National Bank of Abu Dhabi on Tuesday: “Bernanke says he underestimated impact of subprime … Continue reading
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Tagged Ben Bernanke, flow of funds report, FOMC, household balance sheet, Internet bubble, National Bank of Abu Dhabi, portfolio balance channel, S&P 500 valuation
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What Needs to Happen Before We See a Big Recovery?
In a Bloomberg article last May, Caroline Baum summed up the economy nicely in a single question: Four-and-a-half years of an overnight rate near zero and aggressive securities purchases by the Fed have succeeded in raising asset prices. The question … Continue reading
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Tagged Arnold Kling, breadwinner jobs, bubble finance, Caroline Baum, creative destruction, household savings rate, Joseph Schumpeter, private domestic demand, PSST theory, real disposable income
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