Showing posts from May, 2016

Responsibly Expand the Monetary Base Before It Is Too Late

 This article was first published by me at Talkmarkets: According to Batman:  "Better three hours too soon than a minute too late." Unfortunately, the Federal Reserve Bank has never taken that advice. One hopes that someone will get serious about the expansion of the monetary base since GDP is slowing in the face of inflation that is not raging. You want fiscal responsibility? Then understand and promote the concept of helicopter money as it was meant to be. It may prove to be more responsible than Paul Krugman's slight of hand Keynesianism, and more responsible than John Cochrane's fiscal instability views, both discussed below. They seem to push for diminished fiscal credibility as policy because they know you can't default on your own currency. Compared to those guys, Lonergan's helicopter money p

Donald Trump Threatened with Scalping After Slapping New Mexico Governor

This article may be slightly adult in nature. Donald Trump was threatened by numerous tribes with scalping after being photographed slapping the female governor of New Mexico. Other Republicans like Paul Ryan said that she was a nice lady. Trump also threatened to boot New Mexico out of the union as protestors ran wild and Donald never forgets that sort of thing. Revenge is the likely reason that he slapped the governor. Jeb Bush and others said the Republican governor, Susana Martinez, was the future of the Republican Party. Well, we certainly want to forget the past, and ole Jeb is the past. Go away Jeb! In fact, the Republican party, den of thieves that it is, likely won't hold together with the Donald beating on all the women politicians. Even Hillary Clinton has been advised to wear boxing gloves for the first televised debate. She is said to have a pretty big right hook and took husband, Bill, down with it after the Monica thing. So, what makes Donald Trump so will

Zero Hedge Does Not Understand Helicopter Money

 This article was first published by me on my personal blog at Talkmarkets: Zero Hedge does not understand the concept of Helicopter Money. I am a fan of the blog, and it has very interesting and informative articles. Also, Michael Snyder is afraid of the concept. I am here to help! For one thing, it would be used to prevent NIRP and a cashless society. Helicopter money would certainly be preferable to those ideas. If you want to fear something, Michael, fear NIRP, fear the destruction of cash. I can help you fear those things because they scare me. As far as Snyder's fears, the central bank can always be protected when times are good, for sacrificing a little base money for the people when times are bad. Tyler Durden has said that helicopter money is Keynesian. But it really isn't. It is not a fiscal stimulus. Yes, it stimulates fiscally,

BOJ Shock Explains Negative IOR and Negative Bond Difference

This article was first published by me on Talkmarkets: For some unexplained reason, Japan's central bank, the BOJ, did not cut interest rates on bank reserves, which are already negative. They talked as if they were going to do so. This lack of added stimulus has the markets down and bond prices up. Draghi in the Eurozone has already decided to buy more sovereign bonds, and while that increases bank reserves and the money supply (but only if the banks lend the money), investors pay the tax for negative yield. And with a scarcity of good sovereign bonds worldwide, mainly as collateral for derivatives, negative yields are driven down simply by central banks taking them out of circulation, making them even more scarce. So, in Japan and in the Eurozone bond yields are turning negative. We know that prices for Japanese bonds went up and

Eric Lonergan Precisely Defines Helicopter Money

This article was first published by me on Talkmarkets: htt p:// Eric Lonergan is an economist, hedge fund manager and writer. According to his bio, he has written for Foreign Affairs , the Economist and the FT. He has contributed advice to governments . He first proposed the concept of transferring money to households by proactive monetary policy in 2002. He is not the father of helicopter money (Milton Friedman is), but he is a significant messenger of helicopter money for the modern era. He is the foremost economist when it comes to defining Helicopter Money. The helicopter money (HM) debate that he started was based on the concept made famous by Milton Friedman. Whatever you think about Friedman, or about neoliberalism, or about monetarism in general, put that all aside. HM is different and better and more fair, and could at least slow the divide between rich and poo

China could Be the Next Basel Victim or Not

 This article was first published by me on Talkmarkets: China could indeed be the next Basel victim. After all, Japan was the first victim, and Basel 1 finished off the Japanese economy so that deflation is the norm. And the United States and certain Euro nations were the second victim, a group victim, of Basel 2. So, it is logical to assume that China is next and the Swiss could bring that about by counting old loans as being non performing. Here comes something similar to mark to market, to the banking system near you. Before discussing a quick review of Basel and China's status, I have held out hope that the new thinking by central banks could really stop this liquidation nonsense. Procyclicality must be looked upon as being a form of liquidation. I am encouraged by Ben Bernanke's recent statements and by some push by the new Basel to stop procycli

Central Banker ProCyclical Craziness. Fed Exposed

 This article was first published by me on Talkmarkets: Central banks are engaged in procyclical behavior, which makes absolutely no rational sense. After this behavior is discussed, the Basel 3 solutions are discussed at the end of this article. Maybe an exposed Fed could even be redeemed. Procyclical behavior is really bad and must be changed. Market Monetarist Lars Christensen  said this about central bank behavior, and this pretty much defines what that behavior is: Concluding, central banks during booms tend to take on more risk – they overweight risky assets – while they during busts tend to reduce risk – underweight risky assets. Hence, central banks consistently act in a pro cyclical fashion. This is of course is not only bad in terms of ensuring the highest and most stable return at the lowest possible risk, but it also adds to the swings in the economy

Pros and Cons of Helicopter Money. Bernanke Misunderstood

 This article was first published by me at Talkmarkets: I thought it might be interesting to look into the pros and cons of Helicopter Money. After all, Ben Bernanke earned the title, "Helicopter Ben", for discussing the concept back in 2003. I have criticized the Fed, and Bernanke himself, severely both here, and here, but with regard to Helicopter Money, I don't think that a true understanding would cause most to have a strong concern. I think Bernanke has been misunderstood about this important issue. But there are pros and cons to the process, so they are discussed here. Helicopter money is generally thought by the uninformed as Fed base money deposited directly into the bank accounts of ordinary citizens, or all citizens. It will not work that way, although theoretically it could. It is more likely that tax cuts wou