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Germany leading by example
Here's an example of Germany's leading by example on fiscal policy.
Why the US Treasury should issue zero coupon consols
Imagine you could issue 30- or 50-year paper today at 3 or 4%. And you have a strong suspicion that - in the future - 2-year paper won’t be 1.15% like it is today. You think it could be 4, 5 or 6%. Why not lock in the long-term rates of…
Why the Trump Administration’s calls for lengthening bond maturity make no sense
The problem with the Trump administration’s talk about lengthening the maturity of debt issuance is that it confuses the future path of interest rates with the steepness of the yield curve. They talk about locking in low rates. And what…
Two things you should know about Germany’s budget surplus
You probably heard that Germany recorded its third consecutive year of government budget surpluses. This year it was the highest full year surplus since German reunification - 24 billion euros. A lot of the commentary on this will stress…
Is Trump just a conventional politician who uses over-the-top bluster?
Forget about the executive orders and Trump press conferences. This is all for show - reality TV, if you will. Concentrate instead on what actually happens, what policies are actually implemented and what impact this is going to have on the…
Why the election timetable favours the Five Star Movement in Italy
Yesterday, I was talking to a veteran journalist based in Rome. He remarked that youth unemployment in southern Italy was 60% and that this was one of the biggest problems to deal with politically. The spectre of strong, able-bodied young…
The negotiations over Greece aren’t about Greece
Earlier today, I was listening to an interview with IMF head Christine Lagarde dance around the issue of the unsustainability of Greece’s debt load. And she said something very telling. She said that debt haircuts were not on the table but…
Not All Germans Love The Euro These Days
Bloomberg View had a good column today on the popularity of the European single currency. The article shows how the euro has gone from being unloved in Germany at introduction in 2002 to well accepted, while the opposite has happened in…
Some incomplete comments on the current US economic environment
This is going to be a quick hit post to get some thoughts down on paper because a few threads are coalescing for me that I want to give some coherence to. The essence of the threads revolves around the tension at the Fed between normalizing…
Europe’s delusional economic policies
Yesterday three big things happened in three different eurozone economies that I think are interrelated. And I am going to tell you what I believe they mean for the European political economy by tying them together in this post under the…