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The Fed confirms its move to forward guidance and permanent zero
Recently, I wrote a series of posts predicting that the Fed would give up on QE and move toward forward guidance in order to be able to normalize policy. Nevertheless, I have also been saying for quite some time I believe the US zero rate…
More on Germany’s deflationary bias
Martin Wolf has written a column in the FT with which I agree, claiming that Germany is a weight on the world. The essence of his argument is that Germany’s export-led growth model is a ‘beggar-thy-neighbor’ policy in a world short of…
Why an eventual Grexit is still unavoidable
Europe is in the sweet spot right now, with recovery looking like it has taken hold. Greece remains an outlier. The question is what will happen to Greece over the medium- to- long-term. I believe the answer is an exit from the euro zone.…
More on growth in Euroland, the U.S. and the U.K.
I want to pick up where I left off yesterday and highlight the growth dichotomy between Euroland on the one hand and the U.S. and the U.K. on the other. Yesterday I wrote that the risk is to the upside in the U.S. (and the U.K.) if…
Predicting Europe’s endgame policy response
This morning I made the argument that the global economy is growing across the breadth of developed and developing economies. I still have a problem with Europe though as I believe the risk is to the downside. Basically, the policy response…
Risk to the upside in the U.S. contrasts to Europe
The latest data out of Europe shows the economy in the euro zone continuing to expand and suggests that we are probably in a technical recovery. In Europe, however, the threat to recovery is to the downside, whereas in the U.S. the main…