Currently viewing the tag: "Bank of Japan"

The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term […]

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The publication, earlier this week, of the Federal Reserve’s Federal Open Market Committee minutes of January 29-30 seemed to have a similar effect on equity markets as a call from room service to a Las Vegas hotel suite, informing the partying high-rollers that the hotel might be running out of Cristal Champagne.  Around the world, […]

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Under President Obama the debt of the United States government has grown by about 50%, and now stands at close to $16 trillion. Every year, the US government spends between $1.2 and $1.5 trillion more than it takes in. Every day that financial markets are open the US government has to borrow an additional $4 […]

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Shinzo Abe, Japan’s new prime minister, has some exciting new ideas about how to make Japan’s economy grow. How about the government borrows a lot of money and spends it on building bridges and roads all over the country? If that doesn’t sound so new, it is because it isn’t. It is what Japan has […]

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Are you feeling optimistic yet? Are you confident that policy-makers have things under control? – If so, you must believe that we can solve any economic problem by throwing freshly printed money at it. Even problems that are evidently the result of previous periods of ‘easy money’- such as overstretched and weak banks. The ECB […]

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“The government can always pay.” This is a statement that has no basis in fact. Any rational analysis will quickly expose it to be a fallacy. Economic theory, economic history, and plain good old horse sense can demonstrate effortlessly that this statement is an illusion. Yet, it is today a widely held and deeply cherished […]

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Infinite stupidity

On November 14, 2011 By

“The unlimited resources” of the European Central Bank (ECB) is quickly becoming the new magic mantra in political commentary and financial market analysis, now that the bigger euro-dominos are beginning to wobble and everybody realizes that nobody has the firepower to bailout Italy, or to ‘recapitalize’ (i.e. bailout again) all the banks that lent to […]

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Is the global ‘recovery’ faltering? Is the United States economy heading for a ‘double-dip’? These are the headlines after recent disappointing economic data releases, in particular the weak employment report last Friday. Truth be told, there never was a proper ‘recovery’, if the term is to denote a process of true healing, of fundamental betterment. […]

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The widely-read Lex column in today’s Financial Times ran an article on gold ETFs (exchange-traded funds) that regurgitates a couple of assumptions on gold that are popular in the mainstream media and financial market circles. They are: 1) gold must be in a bubble and 2) this bubble must soon pop. As Lex put it: […]

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Oh dear, oh dear. The mainstream media again gets things completely the wrong way round. The commentary after the ECB’s token interest rate hike of 0.25 percent on Thursday – a timid and rather cosmetic attempt at stepping back from a super easy monetary policy stance – revealed once again an astounding inability to look […]

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