Here’s another interesting piece from Randall Wray, the economics professor from University of Missouri-Kansas City (that same school which employs Bill Black of “The Best Way to Rob a bank is to own one” fame).
Wray has a lot to say most, but not all, of which I found convincing – but that’s a story for [...]

I have said on a number of occasions that a sovereign nation that issues debt in its own fiat currency cannot default involuntarily.  The case most people point to as a counterfactual is Russia in 1998.  I mentioned Russia in a recent post:
Countries that have gone bust, Russia, Mexico, and Argentina were borrowing in foreign [...]

Several notable economists prognosticated on what Japan should do to get out of their malaise in the 1990s but none of them understood the problem or the options available to the sovereign government. They all gave poor advice. The way Japan recovered after that decade of poor economic outcomes was through fiscal policy. Monetary policy [...]

This is a post I wrote in response to an ongoing debate about financial crises, credit revulsion and deficit spending over at Naked Capitallism. See the four links in the first paragraph for the precursor articles.
DoctoRx, Rob Parenteau and Marshall Auerback have each written articles here to bring clarity to some issues I first raised [...]

Marshall Auerback here with a few thoughts on employment policy and the limit to government spending in a fiat currency regime.
The Detroit story Edward just posted illustrates that we should start by eliminating the notion that society requires a buffer stock of unemployed people to discipline wage demands and protect profits.  Not only is this immoral and [...]

Dick Berner, Chief North American Economist at Morgan Stanley, thinks we are in for a sizable uptick in GDP for Q3.  I must be honest; I am sceptical about this, but Berner is a well-regarded economist  whose views can’t be dismissed out of hand.  He says:
Incoming data… confirm that the deepest and longest post-war recession [...]

Central banks are not the only ones printing money to help get through this financial crisis.  Private citizens are increasingly turning to the printing press to help alleviate their financial problems as well.  My translation of an article from Finanzas, a major Spanish finance website, explains.
A total of 413,000 counterfeit euro banknotes were withdrawn from [...]

As If you didn’t know this already, the wall of money being funnelled through Chinese banks is creating a massive speculative bubble in shares.  The Telegraph reports:
Under orders from the government, China’s banks have flooded the economy with new credit this year, advancing more money in the first six months than the total for 2008. [...]

I wrote a note regarding the Q1 2009 GDP report which mentioned that the price deflator showed a large pick up in actual inflation. While I don’t think we are off to the races immediately, I do see inflation as a medium-term threat and this was a reminder.

The guys over at Brown Brothers Harriman take a different tack. So, in the interest of giving you a different view, I am posting what they had to say. I will bold the parts that I believe are most important to their argument. While I would point out that the Price deflators have accelerated, it is hard to debate the logic in much of what they say regardless of your medium-term concerns about inflation.

Let’s talk a little about the data released on Friday. On the plus (contrarian) side, everybody is talking about the unemployment number and NOBODY happened to mention that consumer credit was UP on Friday, even before TALF. I think we are very close to the bottom. I think that New York Fed President Dudley is screaming to the investment funds, hedge funds, private equity to do these deals with TALF.