Learn Economics

Learn economics. Topics in Economics can give even the newbie insights into how the economies of the world work with a focus on China and the USA. There are 30 topics listed with articles on those subjects, as well as a glossary of terms.

I have written a lot of vetted articles that are exclusive** to Talkmarkets. Sorting a portion of them by subject will give the reader an opportunity to make sense of it all. I am adding a glossary of terms at the bottom of this page.

For readers interested in economic subjects of the day, these top 30 themes are my efforts to make understanding economics easier.

Please keep in mind that many economic and moral decisions change as we approach the zero lower bound for interest rates. As bonds go negative, things change. That which was a moral duty when rates are 5 percent, like say lowering to 4 percent to stimulate the economy, don't work when we approach zero. 

If anything, the closer to zero that we go, the less lending and less banking stability are achieved! Banks in America do not really want negative rates. It may affect their behavior. It may cause them to abuse their counterparties. But it seems that the relentless decline in rates and bull markets demand lower rates. 

The ultimate goal has to be,sadly, slow growth, or not much growth. MMT, which has absolutely no credibility when rates are above zero, suddenly may have some credibility when rates go negative! 

1. China! 

US Escalates Trade Hostility

Trump China and Phase 2 Negotiations

Skinny Deal: Whose World View Is Currently Winning?

Dangerous History Repeats

Trump May Be Wrong About Winning a Trade War

Trump's Punishment of China: The Start of a Radical Rejection of Foreign Capital?

Scott Sumner Destroys Financial Times Fear of China

Is the USA Too Weak to Let China Succeed?

2. Housing and AI Bubble Causes:

I created this chart which shows the Great Recession Started when LIBOR rates became greater than fixed swaps rates. Banks could not pay out interest as the tables were reversed!

5. History of Hoarding the New Gold (Treasury Bonds):

6. New Normal and Economic Theory:
7. Helicopter Money:

10. Edward Lambert Effective Demand Limit (meaning growth is limited by labor share of GDP):

Economist Edward Lambert
Edward Lambert on Bond Demand, the Coming Recession and the New Normal

Is USA Low Capacity Utilization Low Enough to Prevent Recession?

Capitalism: Problem, Solution or Both? 

11. Liquidation by the Fed,  Obsessed with Pruning Wages!

Trump Economic Plan Revealed: What Should the Fed Do?

Historically, the Fed did not act to lower rates fast enough. As Trump's tariff plan matures and does damage, the Fed may wish to be cautious. The article above explains why.This becomes the exception to my criticism of the Fed for not letting wages catch up to GDP prosperity, historically.

Fed Great Depression and Great Recession Liquidations Go Unexplained

Central Banker Procyclical Craziness

Kashkari Reveals Dark Secret Fed Plan for Wages

Ron Feldman's Fed Secret and Treasury Bond Behavior

Fed's Andolfatto, Powell, and the Secret Goal of the Fed

Is the Fed Wrong in Caring About Wages, Not Inflation?

Attacking the Everything Bubble without Destroying the Economy

12.  Government Shocks and Interventions:

John Mauldin Discusses What Could Go Wrong

Trump Shock: Selgin, Coppola and Lambert

Trump Fail; Tourism Declines in USA

Meng's Arrest Vs. the Rule of Law

Belt and Road: the Sri Lanka Port

China PPP, Asian Infrastructure Investment Bank & Powerhouse Economics

Are Policy "Refugees" Jumping the Trump Tariff Ship?

15. Sovereignty and Cashlessness: 

Banks Close in Rural Areas as World Cashlessness Advances

Larry Summers 100 Dollar Bill Ban and Westfalia Lost

Miles Kimball's Sneaky Way of Destroying Cash

Riksbank: Cash Must Be a Protected Legal Right for Good Reason

16. Reserve Currency and Triffin Paradox:

Henry Kissinger Schools Mercantilist Trump About Reserve Currency

Does Donald Trump Want a Financial Depression?

17. Eurodollars, Repos, and Jeffrey P Snider:

Why Did the Fed Turn Dovish? Not Just Trump

Fed and Trump Fail the Eurodollar

Unstable Repos and the London Connection

Scarcity and the Hoarding of Bonds as Gold in Repo

Repo Watch Looking for the Next Economic Crisis

The essence of Jeffrey P. Snider's thesis is that yes, the Fed expanded its balance sheet after the Great Recession, and it did QE. But it did not fix the broken Eurodollar system and even from 2008 through 2018, there has been a chronic shortage of Eurodollars. It did not really allow full recovery. Therefore, shrinking the balance sheet now is a deflationary danger confronting the financial system in 2018 and perhaps going forward. 

18. Brexit (Economic Benefits):

Currency Hegemony, GDP Growth, and Why Brexit Was Good for the UK

Brexit Impact on the City of London

19. Self Driving Cars:

Top Ten Reasons Self Driving Cars Are Useless

Dreadful News Regarding Self Driving Cars

The Waymo Tesla Self Driving Con

20. Bond Demand:

BIS Explains Repo but There Is More With the Banks

Everyone Said Bond Yields Would Go Up After QE Ended

Blackrock: Cap on Yields Because of Monumental Bond Demand

Economists Reveal Massive Market Forces in Bonds Before and After QE

Fed Weakness, Future Insatiable Bond Demand with Short Supply

Keeping Interest Rates Low Is a Function of Demand, Not of Politics

21.  Negative Interest Rates

Negative Rates, Climate Science, and a Fed Warning

BIS Explains Repo but There Is More With the Banks

Negative Interest Rates and Why Banks Want Fannie and Freddie

Summers and Roubini Talk Negative Interest Rates, Sound Logic But Uncharted Waters

MM Boys and Tight Money. Market Monetarist Terms Listed for You

Clearing Up Negative Interest Rate Confusion. Kocherlakota Weighs In

22. Japan and Perpetual Bonds:

Are Perpetual Bonds Helicopter Money? The New Japanese Plan

Is Japan Falling Back Into Deflation? Only One Monetary Solution Left

Japan Is Practicing Tranche Warfare. Abe Is Frightened!

Where Does Japan's Economy Stand?

23. Modern Monetary Theory (MMT):

Modern Monetary Theory and Its Bad Assumptions

Is the Fusion of MMT and the Green New Deal Creating a Cult?

Fed Will Crush Trumponomics and MMT--Bond Yields Capped

24. Economic Alchemy (Turning Lead Into Gold):

BIS Explains Repo but There Is More With the Banks

The Derivatives Monster Creates a Bull From Capital, Not Labor

Will the Fed and Central Bankers Give Up Alchemy to Save the World?

The False Economy; R-Star Estimates Bleak

25. Interest on Bank Excess Reserves:

The Fed Did Not Save Real Estate But Gives Banks Welfare Checks

Negative Rates Bad, Negative IOR Good Says Scott Sumner. The IOR Debate

26. Macroeconomics:

Stock Markets Fear the Fed More Than War

Scott Sumner's 15 Minute Macroeconomics Lesson

Pros and Cons of Attacking the Federal Reserve Bank

China Could Be the Next Basel Victim or Not

Trump May Shrink Shipping and Air Shipping Capacity Utilization

Trumponomic and Great Recession Nuggets from Market Monetarists

Trickle Down Didn't Work for Trump, Bush and Hoover. Here's Why

27. Inflation, Reflation, CPI and PCE:

Top Ten Reasons the Fed Raises Interest Rates When There Is No Inflation

Fake Inflation Expectations Meet Good and Bad Inflation

Reflation Cannot Save Trump From a Painful Recession

Fed VP Williamson Destroys Inflation Hawks

Larry Kudlow's Strange Views About Inflation

Trumponomic and Great Recession Nuggets from Market Monetarists

28. Leading Indicators, Recession and the Federal Reserve:

Dr Lambert's Effective Demand Recession Indicator

The Teetering State of Retail

Interest Rates Are Not a Leading Indicator

A Great Depression Lesson for Our Time

Tim Duy's Fascinating Take on the State of the Economy

Tim Duy: Stocks Won't Crash; Look for These Indicators

29. Wall Street and the Fed:

Paul Krugman Wants to Bless Us But It Is Mostly for Wall Street

Why Delaware Exists

The Fed Scares Everyone About Treasuries from Time to Time. Is It a Scam?

Did Goldman Sachs Have Anything to Do with Market Volatility?

30. Business Cycle:

Why Did the Fed Turn Dovish? Not Just Trump

Kalecki's End of the Business Cycle; Bond Wars

Caterpillar Confirms Kalecki's Historical Truth About the Business Cycle

Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.

While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)


Base Money 
Base money is Fed money, called High Powered money sometimes. It is money that is not created by banks out of thin air. That money is called broad money. Base money is backed by securities, with the exception of Eurodollars. Eurodollar money is likely to become regulated more and more.

Exit of the United Kingdom from the European Union. There is a dark side to Brexit and a bright side to Brexit. The dark side has to do with racist reasons some have for leaving the Eurozone. I write about the bright side of Brexit. The bright side is that having one's own currency, which the British would preserve through Brexit, is a way to grow the economy and prevent stagnation in the economy.

Broad Money 
Broad money is created when banks make loans. However, it is not strictly fiat money because banks generally secure their loans. Fiat money is money created with no anchoring to a security.

Clearing houses 
Transparent centers where derivatives are cleared, and given collateral to back them. Clearing houses are intermediaries between buyers and sellers.

Counterparties take on risk in order to achieve a loan, or for other reasons. Banks often use counterparties to push risk off their balance sheets.

Derivatives are securities whose price is based upon the price of underlying securities. Derivatives are contracts between prices, based on underlying price. Over the counter derivatives sometimes are blind, and do not have collateral backing. Clearing house derivatives have collateral attached, and clearing houses can be unstable through systemic risk if the counterparties they bring together are unstable. Derivatives are used for speculation and hedging. 

Effective Demand Limit
The effective demand limit, which was expressed in an equation by Dr Edward Lambert, is a limit that is reached when lack of adequate share of GDP is shared by labor. It is a leading indicator.

Eurodollars are US dollars deposited in foreign financial institutions. Eurodollars are used in a Eurodollar market, a money market. Eurodollars cannot be created out of thin air and are loaned out as base money. 

Fiat Money
Money created out of thin air is fiat money. Fiat money is money created without being offset by a security. So, it is not right to say that when a bank creates money for a loan on a house, that that is fiat money. The house is the security, the collateral, making that money not strictly fiat money. Fiat money is created with no security offset.

Fixed Rate 
Rate banks usually charge customers for swaps. This is the higher fixed rate. Sometimes swaps are required by banks for midsized and small firms qualifying for loans. Banks often take the floating LIBOR rate, which is a lower rate. 

Greenspan Conundrum 
In 2005, Greenspan pointed out efforts to raise short term rates should have pushed long rates up. But of course, that did not happen. The conundrum is that long rates stay low. The reason is there is massive demand for long bonds. It is simple supply and demand, not a conundrum. Greenspan's structured finance has created the derivative/collateral/new normal financial monstrosity we now have.

Putting up collateral in the derivatives markets requires some collateral to take a haircut. Often times this is corporate debt, not as pristine as treasury or other sovereign debt. Haircuts can be as much as 20 percent of the value of the collateral.

High Powered Money is Fed money that is held by the public. The change in the money supply of high powered money controls inflation/deflation. Reserves used to be counted as high powered money but excess reserves are not, as they don't leave the banking system.

Interest on reserves and interest on excess reserves. These are terms used interchangeably. The Fed pays banks interest on reserves which are base money.

Leading Indicators
Leading indicators, or leading economic indicators are warning predictors or upbeat predictors that are based on various economic measurements, such as money supply, loan demand, auto sales, retail sales, effective demand limit, capacity utilization, and other measurements. Lagging and concentric indicators are not as effective in predicting future economic activity. There is sometimes debate on which indicators are leading and which are not.

London Interbank Offered Rate. Libor is a floating rate as opposed to fixed swaps rates, which are higher unless there is a financial meltdown. Where a financial meltdown happens, the LIBOR rate can exceed the fixed rates, freezing the banks.

The discipline in economics most concerned with overall GDP (gross domestic product) and large economic issues such as interest rates and Fed behavior, as opposed to microeconomics.

The discipline in economics most concerned with the behavior of firms and individuals and how they react to the greater macroeconomic environment. 

New Gold 
New gold is actually debt. It can be corporate debt, or it can be treasuries. Treasuries are the highest form of debt, and are considered better collateral than real, physical gold in the swaps, or derivatives markets. 

New Normal 
Abnormally slow growth and low long bond yields, once thought to be abnormal, are now normal after the 2007-2008 credit crisis and the Great Recession of 2008-2012.

In economics, the tendency of the Fed and banks to curtail lending as the economy enters a recession is procyclical. If banks were more countercyclical, recessions could be less harsh on the people as they would have access to more credit during tough times.

Repo is short for "repurchase agreement". It is a promise to buy back a security at an agreed upon price.

Repo Fail
If a transaction does not go through, and the holder of bonds decides to keep the collateral bonds instead of completing the repo transactions, it is known as a repo fail.

Square Mile
The Square Mile is the original City of London, or Londinium, home of world finance and Roman ruins. It is protected by two mythical Roman statues, Gog and Magog. The existence of these statues very well could have Biblical significance. 

Sterilization is the act of the Fed tightening in one aspect of policy in order to loosen the money supply in another aspect of policy. 

Structured Finance 
Structured finance, often using swaps, pushes risk off banks and onto counterparties. It often puts risk onto clearing houses as well. 

Exchanging one form of loan for another. Banks most often, but not always, take the lower LIBOR rate which is a floating rate, in exchange for their customers who want inflation protection and take the higher fixed rate. This usually works into the banks favor and when it doesn't the banks freeze up and Great Recessions with credit crises begin. 

Taper Tantrums
Efforts by investors to push up yields on long bonds after the Fed tapers the buying of long bonds. In 2013 and in 2017 these tantrums proved short lived.

Velocity of Money
Prosperity is often determined by the velocity of money, or how much money turns over within the economy within a certain period of time. 

Westfalia or Westphalia Peace 
This was an agreement between sovereign European nations to treat each other with respect. It is the perfect sovereignty, as opposed to the perverted sovereignty of Adolph Hitler or even Donald Trump. The excesses of globalization, ie. with banks having too much power over the nations, is another failure of interaction of the nations that destroys perfect sovereignty. 

For those who have questions, contact me at bgamall4 at yahoo dot com.

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