• Paulson abandons TARP asset purchase and risky assets plummets 20 Nov 2008
• [PREMIUM] The Fed’s Rate easing and Obama’s Mortgage refi plan are bullish 26 Jan 2012
• How safe are your assets? 20 Sep 2008

• Milton Friedman’s 1948 Functional Finance Proposal 17 Jan 2012
• Economics 101 on government budget deficits 13 May 2010
• How To Reduce Government Budget Deficits 4 Feb 2011

• A Modest Proposal 25 Jun 2010
• A Modest Proposal for Ending Debt Limit Gridlock 27 Mar 2011
• Fannie and Freddie: The politics of finance 9 Sep 2008

• Roubini: How to avoid the horrors of ‘stag-deflation’ 2 Dec 2008
• Japanese opposition would avoid U.S. dollar bonds if elected 12 May 2009
• Is Japan next on the road to quantitative easing? 16 Jan 2009

• Byron Wien’s Ten Surprises for 2012 4 Jan 2012
• Byron Wien’s Ten Surprises for 2011 3 Jan 2011
• Video: Edward Hugh at the LSE on the Internet and Credit Crisis 16 Feb 2011

• Misunderstanding Modern Monetary Theory 17 Jul 2010
• Krugman on Modern Monetary Theory 15 Aug 2011
• Paul McCulley does Modern Monetary Theory 14 Jul 2010

• Why didn’t the Fed release a statement on the dollar liquidity bailout? 16 Sep 2011
• ECB: despite talk of rate cuts, the focus is liquidity 26 Sep 2011
• Additional US dollar liquidity-providing operations over year-end 15 Sep 2011

• How austerity in Europe works 3 Nov 2011
• Investing Like It’s The Sure Thing? 5 Jun 2010
• Dollar Bounce – Not the Real Thing 18 Oct 2010

• Japan is even worse than the economic data suggest 25 Apr 2011
• Pre-Market: Asian Economic Data Boosts Sentiment 13 Jul 2011
• Poor Economic Data in Europe Increase Global Growth Concerns 12 Aug 2010

• PIMCO on British National Solvency 14 Jun 2010
• Auerback: In Europe, national solvency first, then aggregate demand 11 Nov 2011
• BBH Special FX: Dollar Lifted by Woes in Rest of the World 22 Apr 2010

• Why Is Money? 13 Aug 2010
• On Modern Money 13 Mar 2011

• Zero rates do not promote saving 29 Dec 2009
• On who is saving and what it means as well as other links 21 Aug 2010
• Spain’s High Risk Election Process 4 Aug 2011

• China to diversify out of U.S. dollars 6 Sep 2009
• Why are the Swiss now issuing debt in U.S. Dollars? 2 Feb 2009
• The government has a printing press to produce U.S. dollars at essentially no cost 6 Dec 2010

• The Gold Standard and Fiat Currency: Metalism vs. Nominalism, Part One 22 Aug 2011
• Don’t underestimate the power of printing money, part 2 23 Mar 2009
• Government tax coercion versus fiat money liberty 28 Jul 2011

• Is Gold Just Another Fiat Currency? 31 May 2010
• Why would anyone accept a ‘fiat’ currency? 18 Jul 2011
• Going Off on Rogoff – There is No Hard Debt Constraint for Fiat Currency 2 Mar 2010

• Plus ça change – LDC edition 27 Jun 2011
• Catalysts for Change in the FX Driver 2 May 2011
• Central Bank Reserves: IMF COFER Data Shows Little Change 30 Jun 2010

• Sell Bernanke and the U.S. dollar; Buy gold and silver 13 Dec 2010
• Did JP Morgan cause Lehman’s bankruptcy? 5 Oct 2008
• Ben Bernanke: The Chauncey Gardiner of Central Banking 10 Nov 2010

• Bob Janjuah is ‘tactically bearish’ now 24 Jan 2011
• Getting bearish again 23 Aug 2009
• Felix Zulauf turns bearish, expects major correction and QE3 14 May 2011

• Is the U.S. dollar carry trade replacing the one in Japanese yen? 27 Oct 2009
• The Euro As A Carry Trade Funder … Surprising? 26 May 2010
• China slams U.S. for inflating global asset prices via carry trade 15 Nov 2009

• The Mosler Plan for Greece 29 Jun 2011
• Thoughts on the French Restructuring Plan for Greece 27 Jun 2011
• My Thoughts on the French Restructuring Plan for Greece 28 Jun 2011

• Currency crisis is gathering storm 25 Oct 2008
• On Creators of Currency and the Sovereign Debt Crisis 7 Sep 2010
• Jeffrey Gundlach cautious on High Yield, also sees Munis 15-20% lower 9 Mar 2011

• Does Quantitative Easing Work in Boosting the Real Economy? 2 Nov 2010
• Hellmeyer Interview Part 2: The uber-bullish case for the global economy and real assets 8 Dec 2010
• Cotton Hoarding in China Shows There is Serious Commodities Speculation 17 Feb 2011

• Bill Gross opines on investing in a world of crony capitalism 8 Jan 2010
• A New World Order 19 Mar 2010
• America’s economic policy mix is a threat to the world 2 Nov 2010

• QE2 Won’t Save Our Sinking Ship 18 Oct 2010

• Chart of the day: Japanese Yen 24 Oct 2008
• Chart of the Day: US Stock Performance in September 2010 Not the Best Since 1939 4 Oct 2010
• Chart of the Day: M1 Money Multiplier 1 Apr 2011

The claims about “unsustainable deficits” gained new urgency this week as S&P warned that it was downgrading US federal government debt from stable to negative (see here for recent debate).

This appeared to be a blatantly political move, designed to influence the debate in Washington, adding fuel to the fire to cut budget deficits.

The deficit hysteria has nothing to do with economics, government solvency, or involuntary default. A sovereign government can always make payments as they come due by crediting bank accounts—something recognized by Chairman Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.

• Next Stop: US sovereign debt downgrade 16 Jul 2008
• US government discusses Fannie and Freddie bankruptcy 9 Jul 2008
• Citigroup talks with US Government as bankruptcy looms 22 Nov 2008

• Chart of the day: Excess Reserves 3 Dec 2008
• Why the Federal Reserve wants to drain excess reserves 31 Dec 2009
• Chart of the Day: Market Share of GDP and Foreign Exchange Reserves 17 Dec 2010

• Does the Money Multiplier Exist? 12 Aug 2010
• Chart of the Day: NY Spot Gold and Commodities Respond To Fed Money Printing 4 Nov 2010
• Chart of the Day: Net Payers and Receivers of EU Money 6 Dec 2010

• The Fed, Gold, and Gold Stocks 6 Nov 2010
• Casey Gold Summit Offers Investment Nuggets 15 Oct 2010
• The #1 Reason Why Gold Collapsed 20 Oct 2010

• National City Faces `Informal’ Probe Tied to Lending 8 Aug 2008
• Libor-OIS spread at an all-time high 25 Sep 2008
• Ireland faces two-year recession 13 Jun 2008

• More thoughts on quantitative easing from Morgan Stanley 27 Mar 2009
• A few thoughts on the Fed’s quantitative easing strategy 11 Aug 2010
• Is quantitative easing really inflationary? 21 Jul 2009