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A few comments on Helicopter Money
This post is going to just be a collection of thoughts I have on the subject of helicopter money based on conversations I have had with people for and against the idea.
Job growth is slowing, so when will the Fed hike rates?
The latest jobs report came in at 160,000 jobs added to US non-farm payrolls. As this number was below expectations, it effectively sidelines the Fed in June. And given we are in an election year, the chances of two rate hikes occurring are…
Democratic values in the EU and the rise of the German right wing
In the United States, the Republican Party is baffled by how their electorate has favoured Donald Trump for nomination for President in 2016. Equally, the Democrats are scurrying to quell the massive inflow of votes to Bernie Sanders, whose…
Bill Gross on helicopter money and Universal Basic Income
Technological advancement in a world of high private debt means a substitution of capital for labor without big increases in demand. It is a recipe for low or negative growth. Add in demographic challenges in many countries and you have a…
Where would the US be today without the shale stimulus?
When one thinks about why the US has outperformed, a lot of the analysis is destined to focus on fiscal and monetary policy. And while I think that’s an important thought process to go through, I believe that bank recapitalization and shale…
The Importance of China’s New VAT
Yesterday, China announced one of the most important tax reforms of the past twenty years. It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT. Manufacturing companies have been subject to a VAT…
The Bank of Japan’s inaction and the Fed’s tightening bias with GDP slowing
Soft data in the US and Japan was not enough to spur central banks in either country into action over the last two days. For me, it highlights first how vulnerable the global economy is. But, more than that, it points to the ineffectiveness…
Fed policy in an election year of slowing growth
US and global economic growth is slowing. And this has caught the Fed out given its rate hike in December. The question, now, therefore is whether the Fed continues to hike in the face of this slowing, given the election looming in…
Is the Fed panicked about the downshift in the US economy?
The minutes from the Federal Reserve Board's last meeting have come out and they are dovish. While on the one hand, we should praise the Fed for showing it is data-dependent as it has professed to be, on the other hand the abrupt change in…
How the US economy is shaping up in 2016 and how the Fed will react
The US economy - while still far from recession - is still downshifting. At the same time, the Federal Reserve - while less hawkish than in December - is still in tightening mode. This combination still makes recession a reasonable worst…