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Browsing Category
Monetary System
The Global Economy – Old Maids Who Won’t Play Anymore
by Claus Vistesen (with apologies to Frederick Goodall) The financial and economic discourse is a funny beast really; it can, if harnessed properly, shed light on future investor and market performance, it can give a diversified and…
Why the U.S. economy is weak
My friend Rob Parenteau says "most professional investors are high frequency macro data and short run asset price driven." He basically means they have no real macro analytical framework to use when making investment…
The ‘Flations – Part II
Frederick Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession (McGraw-Hill, 2009). Inflation versus deflation discussions are the rule for columnists,…
The Government’s Bank
How does the government pay for stuff? That's a question we should all be asking ourselves. I'm speaking here both from a philosophical and functional perspective. You and I have to earn our money by working. Usually we deposit this money…
Why Is Money?
By Annaly Capital Management Back in June we wondered out loud, “What is a dollar?” That exercise—as well as the recent schizophrenic behavior of the currency market and the lamentations regarding the Fed’s “printing press”—has led us to…
Random Shots
It has been a while since I have had a round of these and in the current macro/market environment I thought it an excellent occasion to take some pot-shots at the market discourse. So, read on if you want to see what it looks like when I am…
The ‘Flations
Frederick Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession (McGraw-Hill, 2009). The incessant debate of whether the economy is inflating or deflating…
Hiding Bank Losses
In a recent post on the money multiplier, a reader Luis Enrique asked about bank lending and capital constraints. Anecdotally, much of the reduction in credit is supply-constrained as well as demand-constrained. That means it's a matter of…
Does the Money Multiplier Exist?
Editor's Note: Do not confuse the use of the term 'loanable funds' used here with the theory of loanable funds which implies government spending crowds out private spending because of a limited pool of 'loanable funds' in an economy. The…
A few thoughts on the Fed’s quantitative easing strategy
I am on holiday for a few weeks. But I am going to write a brief post here on QE because I think it is an important subject. For months now we have heard that the Federal Reserve could start buying up Treasury securities in another…