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predicting the next recession and the future of the economy

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  • #61
    Re: predicting the next recession and the future of the economy

    ben bernanke writes about helicopter money:
    What tools does the Fed have left? Part 3: Helicopter money

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    • #62
      Re: predicting the next recession and the future of the economy

      here's an interesting article on manufacturing "dying" - in the same sense agriculture died as an employer in the late 19th and early 20th century. 35% of workers used to be farmers. that shifted until only a tiny fraction of that produce much more output with the aid of technology - e.g. driverless gps guided tractors doing the planting. meanwhile agricultural prices are low. more deflationary implications, worth reading. Bruce Greenwald: The Crisis Bigger than Global Warning

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      • #63
        Re: predicting the next recession and the future of the economy

        we already have helicopter money - it's called qe and zirp. see bill gross' new commentary.
        he's predicting another round of qe, perhaps in a year, with interest rates staying historically low and asset prices artificially high.

        i'll just add an observation re trump - he's promised a giant infrastructure re-build; can't you see "the make america great again infrastructure act"? the donald is very comfortable with debt. the build will be financed by debt, which will be bought and held by the fed, while the interest coupons are paid by the treasury to the fed so that the fed can then remit them to the treasury as it does with all its "profits." get it? helicopter money.

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        • #64
          Re: predicting the next recession and the future of the economy

          Originally posted by jk View Post
          we already have helicopter money - it's called qe and zirp. see bill gross' new commentary.
          he's predicting another round of qe, perhaps in a year, with interest rates staying historically low and asset prices artificially high.

          i'll just add an observation re trump - he's promised a giant infrastructure re-build; can't you see "the make america great again infrastructure act"? the donald is very comfortable with debt. the build will be financed by debt, which will be bought and held by the fed, while the interest coupons are paid by the treasury to the fed so that the fed can then remit them to the treasury as it does with all its "profits." get it? helicopter money.
          iirc it was Dick Cheney (speaking to then Treasury Secretary Paul O'Neill) that said Reagan proved deficits don't matter. A Prez Trump might just test that further than all his predecessors, who seem to have done a fine job in that regard I might add.

          With:
          - Chinese policy makers flailing about trying one thing after another and reversing previous directives in a race against their citizens moving money out of the country;
          - EMs at risk of a relapse in the event of a rising US$;
          - Japan becoming the world's NIRP poster child;
          - Europe preoccupied with Brexit, Greek bonds, French labour reforms, German surpluses, creaking Italian banks and Let's-Make-A-Refugee-Deal with Erdogan;
          - Oil exporters unable to agree on anything more than the date of the next confab;

          the US$ and the US economy is starting to look like the best bet in town.

          An aggressive "Fortress America" fiscal infrastructure program funded by Treasury issuance doesn't seem like such a bad option in a world clamouring for US$. It might help normalize interest rates, put to more productive use the capital flows underway today, generate some modest inflation?

          Commodity capacity is in abundance from the prior over-investment. What happens to a US led global economy that enjoys oil capped at a nominal $50+/- for the rest of this decade (not to mention cheaper iron ore, copper and most everything else)? Shouldn't it benefit and grow faster than the recovery from the 08/09 financial crisis when oil rebounded to $100 and stayed there?

          As for US recession although nobody is going to do cartwheels over these stats, they appear constructive to me:

          U.S. Economy Grew More Last Quarter Than Previously Estimated


          The U.S. economy expanded at a slightly faster pace in the first quarter than previously estimated, reflecting less damage from trade and inventories.

          Gross domestic product rose at a 0.8 percent annualized rate in the three months ended in March, the smallest gain in a year, Commerce Department figures showed Friday. That compares with the 0.5 percent advance the government reported last month...

          ...After-tax personal income adjusted for inflation climbed at a 4 percent annualized rate in the first quarter, revised up from a prior estimate of 2.9 percent. The saving rate was also pushed up to 5.7 percent, the highest since the fourth quarter of 2012, from 5.2 percent...

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          • #65
            Re: predicting the next recession and the future of the economy

            one positive of a trump presidency is that he's more likely than any democrat to get congress to go along with a big, deficit financed, infrastructure spend.

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            • #66
              Re: predicting the next recession and the future of the economy

              Originally posted by jk View Post
              one positive of a trump presidency is that he's more likely than any democrat to get congress to go along with a big, deficit financed, infrastructure spend.

              this is where i fault Team NO (R) the most - instead of 'just saying NO' to whatever was proposed, they just 'triangulated' and stonewalled anything that might've actually been constructive

              vs Team Douchebag's academic dweebs monetary MADNESS.

              had they put even 1/4 of the 10 TRILLION that obozo&co has blown for their largest campaign contributors baliouts

              THE ECONOMY OF MAIN ST WOULD'VE BEEN BOOMING 5 YEARS AGO!

              vs the limping-along walking zombie that it in fact is - in spite of the pure bullshit 'stats' puking out of every lamerstream media outlet in north america!

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