monetary policy

By Michael Hudson It all seems so long ago! On October 23, 2008, Alan Greenspan choked up a mea culpa for his deregulatory policy as Federal Reserve Chairman. “Those of us who have looked to the self-interest of lending institutions to…

Here is a good 17-minute Bloomberg video with Marc Faber. He talks a lot about Mexico and he is bullish on that economy. As for the US, his view, like mine, is that printing money does give a temporary boost to economic activity. However,…

M1 is the narrowest definition of money. It includes currency and coins, traveller's checks, and checking accounts (so-called demand deposits).  The chart below from the St. Louis Fed shows the relationship between base money that the…

By Comstock Partners The massive U.S. debt problem that we have been discussing so often for many years has now become widely known both to investors and the general public. It has been a major topic of discussion in the media as well as…

In September 2008, the Federal Reserve let banks turn more than $118 billion in junk bonds, defaulted debt, and other securities into cash. The role of a central bank in a crisis is to act as a lender of last resort by helping market…

Short-Run Actions Have Consequences In the spring of 2003 there was worldwide concern that the U.S. economy was falling into a “Japanese-like” malaise; the recovery was stalling, deflation was likely to occur and unemployment was…

By Marc Chandler Many market observers seem to be exaggerating the role of some Federal Reserve officials, in particular James Bullard, who has mentioned exiting from QE2 before completing the $60 bln of purchases. Plosser, a voting…

The Fed could announce a federal funds target of 3% but the tsunami of excess reserves now out there swamps any conceivable demand, so the federal funds rate would be guaranteed to remain stuck at zero. The target would be meaningless.…

ECB President Trichet remained hawkish in comments today, noting that inflation is persistently above the target of just below 2%. Yet ECB monetary policy is not base don one pillar but two. The other pillar is money supply. Money supply…

This is from the blog Political Irony (hat tip UMKC). Higher consumer price inflation than we see now will probably result in demand destruction and recession before the Fed reacts. The slack in the economy would mean this becomes a…