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Interest rates at lows as long Kondratiev wave cycle comes to an end

Edward Harrison — Wed, 21 Mar 2012 18:00:40 +0000

Kondratieff waves are these supercycles that a lot of people have been talking about in the context of the great leveraging that led to crisis in developed economies. We appear to be at the end of one of these waves in bond markets according to some anaylsts

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Is Finland Really A Closet Member Of The Eurozone Periphery?

Edward Hugh — Mon, 19 Dec 2011 02:36:20 +0000

The country’s debt dynamics are far from unsustainable at this point, but given the weakening in the country’s export performance and the steady unwinding of the housing boom we can now anticipate I would expect growth to be weaker than either the EU or the IMF are currently anticipating, and pressure on the country to increase fiscal spending to maintain expectations to rise, with the implication that pressure on the Finnish spread over 10 year German bunds will continue, as the country risks drifting off from being part of the core towards the growing periphery, at least in the eyes of investors

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Central Bank Action Not A Solution

Comstock Partners — Fri, 02 Dec 2011 00:00:28 +0000

European leaders will meet again on December 9th in an attempt to come up with the solution. The important point, though, is that the probable solution would call for European nations to surrender some sovereignty over fiscal policy to a higher authority dominated by the stronger EU nations, particularly Germany. In addition, the new fiscal policy would amount to more austerity. Given that the people in the weaker nations have already been rioting against the austerity programs proposed by their own governments, how will they feel when that austerity is imposed from the outside? And even if these obstacles were overcome, the result would be highly restrictive. As we have repeated ad nauseam, the overall problem is too much global debt. The policy solutions are inherently deflationary and will result in slow growth and disappointing market returns for years to come

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You couldn’t inflate, even if you wanted to

Guest Author — Sun, 27 Nov 2011 01:30:35 +0000

So here we are, with the ECB demanding deflationary austerity from the member nations in return for the limited bond buying that has been sustaining some semblance of national government solvency, not seeming to realize it can’t inflate with its monetary policy tools, even if it wanted to

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Will internal devaluation work?

Edward Harrison — Tue, 11 Oct 2011 23:00:41 +0000

My friend Rob Parenteau doesn’t think it will. His argument against it is similar to the one I have been making about the origins of this crisis. Here’s what I said

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Manufacturing inflation in a wage deflationary environment

Edward Harrison — Mon, 10 Oct 2011 14:00:32 +0000

How does manufacturing CPI inflation benefit an economy in which incomes are falling? When inflation rises and incomes are stagnant or falling, the economy rolls over

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The Golden Constant

Frederick Sheehan — Fri, 07 Oct 2011 12:38:15 +0000

The following is a brief outline of "Gold and the 'Flations," published in the April 2005 Gloom, Boom & Doom Report. General talk has it that gold is a hedge against inflation. We might take this a step further and conclude that a unit of gold will purchase a constant basket of goods when prices are inflating. Standard advice does not include gold in one's asset mix during non-inflationary periods. The evidence presents a more complicated picture

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1930

Edward Harrison — Mon, 03 Oct 2011 17:00:24 +0000

An excerpt from "The World In Depression" by Charles P. Kindleberger

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Japan: Yen upside risk on deflation threat

Marc Chandler — Thu, 29 Sep 2011 14:30:35 +0000

More broadly, the recovery from the March tragedy appears to be running out of steam. Retail sales which surged in the April-June period fell in both July and August and deflation appears to be threatening again. The year-over-year pace of national CPI is expected to slip back to 0.1% in August, when reported in early Tokyo on Friday. The Sept readings for Tokyo are expected to be -0.2% year-over-year

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Long-term interest rates are a series of future short-term rates

Edward Harrison — Mon, 26 Sep 2011 12:53:52 +0000

On how the expectations theory of interest rates explains why debt-induced depressions are fundamentally deflationary in nature

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