Post Tagged with: "financial history"
China: no hard landing, but no solution
I have been arguing for a while that as long as the Chinese government retains its capacity to raise debt we are not going to see a sharp slowdown in economic growth – at least until 2013. Any indication that the economy is slowing too quickly will be met with a relaxation of credit controls, and the concomitant rise in investment will spur growth
Government tax coercion versus fiat money liberty
This is a polemic on fiat currency. it is long and detailed. But I believe it is both thorough and logical
Deficit Deal Could Derail Growth
Comstock Partners argues that while the stock market seems ready cheer any agreement that increases the debt ceiling and avoids a default, such cheering may be extremely short-lived as the economy sinks further under the burden of additional near-term cuts in spending. This conclusion is based not on any particular political ideology or economic theory, but on the historical record
Dilemma over current account vendor financing
There seems to be an aggrieved sense on the part of creditor nations that after providing so much helpful funding to undisciplined debtors, the creditors are going to be left with losses. There is, they claim, something terribly unfair about the whole thing. To me this whole argument is pretty surreal. Not only have the creditors totally mixed up the causality of the process, and confused discretionary foreign lending with domestic employment policies, but an erosion in the value of the liabilities owed to them is an almost certain consequence of their own continuing domestic policies
Is the deficit ceiling debate a Smoot-Hawley moment?
If I had to make parallels for today’s time in history, I still say this is Hoover’s time, not Roosevelt’s and certainly not Clinton’s
The Confidence Trick of Fiat Currency
In my view, fiat currency is a confidence trick. The key to confidence in a fiat currency is the belief of citizens that the government issuing the currency will manage its finances in a way that promotes general “life, liberty and prosperity”. If confidence erodes, tax evasion will rise, citizens will begin surreptitiously using other media of exchange to transact and inflation and currency depreciation will spiral out of control
Here’s Why The Economy Feels So Bad
As we have said numerous times, economic growth following major credit crises is always slower than average, while recessions occur more often as consumers deleverage the vast amount of debt built up during the boom. In our view it will take years to work our way back to normal. Here’s how we compare the current recovery to the last eight expansions that lasted at least two years
The Looters
If you were reading the newspaper back in May, you might have seen a small reference to a statement from Treasury Secretary Geithner to the effect that he could delay the day of reckoning until August. You probably didn’t see any specifics, but some kind of accounting gimmick was involved, you were led to believe. No biggie. Don’t worry. In fact, what happened was that Geithner declared a “debt issuance suspension period” (DISP), to be in effect from May 16 to August 2. No new debt would be issued. Ok, that sounds good. But what about the aforementioned bills that would come due in the interim
Chart of the day: Debt Ceilings – A historical perspective
This comes from the Washington post: Since 1980, the debt ceiling has been raised 39 times. It was raised 17 times under Ronald Reagan, four times under Bill Clinton and seven times under George W. Bush. Congress is currently in a contentious debate with the White House on whether to raise the ceiling by the
Tax Holiday: Homeland Investment Charade
It is not clear that there is a political consensus for a stand-alone tax holiday. There may be support for the stand-alone tax holiday as part of a larger corporate tax reform effort. If it is enacted, job growth and capital investment is unlikely to be aided, if for no other reason than the lack of capital is not the reason for the jobless recovery and sluggish investment
Chart of the Day: UK National Debt 1922 to Present
As a result of the two great wars in the 20th century, the UK’s national debt soared such that by the end of World War II, public net debt was well over 200% of
Chart of the Day: Depth and duration of jobs crisis
Last week I showed you one way to look at the jobs crisis in graphical form. Here’s another from Calculated Risk.