currencies

So how do we explain the European crisis? One theory is that the European crisis was caused by the moral turpitude and spendthrift habits of lazy Europeans along the periphery, in sharp contrast to the hard-working and thrifty countries of…

European shares have given back early morning gains as Berlusconi denies resignation reports. Market attention will remain focused on political developments in the euro zone; Italy likely to overshadow Greece now. Light US data is likely to…

If a central bank guarantees investors credibly that they can invest in certain debt instruments and not suffer principal or interest repayment risk, but only currency and inflation risk, some investors are almost definitely going to buy…

Switzerland reports its October consumer prices on Monday. This could be important. The Swiss National Bank's decision to cap the franc took place on the same day that the August CPI was reported (Sept 6). It showed a 0.3%…

Events continue to spiral beyond the control of European policy-makers. With so much time and effort being put into Greece, the troika now finds itself facing a much bigger problem: Italy. While it has been difficult to remain committed…

Here’s an interpretation of the euro zone I have been meaning to run by you and I touched on it in the update to my post on how austerity in Europe works. In a fixed exchange rate environment like the euro area, you don’t have currency…

Markets are cautiously optimistic ahead of Greek confidence vote, US payrolls and G20. US private payrolls expected to increase by 125k; Greek headlines still likely to drive price action. G20 unlikely to deliver much in terms of policy…

Harvard Economist Kenneth Rogoff has a post up at Project Syndicate which does a good job in laying out the conundrum that Europe faces in the sovereign debt crisis. He theme is exchange rates and currency revulsion. But the underlying…

This post describes how austerity works in the European Monetary System where the euro is used as a currency. I will start by framing the difference between currency users and currency creators, then move to how central banks and government…

This post is intended to be a hopefully brief synopsis of how the monetary system works using an Austrian framing with MMT terminology. If you don’t know what that means, you’ll see what I mean as I proceed. MMTers like to say that money…