tag:blogger.com,1999:blog-2546602206734889307.post4813890928565866335..comments2024-03-19T08:41:43.759+00:00Comments on mainly macro: UK 2015: 2010 Déjà vu, but without the excusesMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2546602206734889307.post-45989914613903302152014-08-22T06:29:01.466+00:002014-08-22T06:29:01.466+00:00Ralph, remember MOSLER'S LAW: "There is n...Ralph, remember MOSLER'S LAW: "There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-54601994740710473912014-08-21T19:47:52.925+00:002014-08-21T19:47:52.925+00:00Simon,
I’m baffled as to what makes you think “....Simon, <br /><br />I’m baffled as to what makes you think “. A negative demand shock, like another Eurozone recession, will quickly send interest rates to their zero lower bound again, and we will have little defense against this deflationary shock.” Given zero interest rates and not enough aggregate demand, what’s to stop the state simply printing money and spending it? That would raise demand.<br /><br />The state can spend the money on public sector stuff, or a right of centre government might spend the money by cutting taxes while leaving public spending unchanged. That way household spending would rise. Either way, the problem is solved.<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-89920592547435102262014-08-21T17:06:45.537+00:002014-08-21T17:06:45.537+00:00Perhaps you didn't notice that "bond vigi...Perhaps you didn't notice that "bond vigilantes" do not take on Central Banks that issue sovereign currencies that float. They only take on countries that are USERs of someone else's currency, that they can't "print" more of, when they need it.<br /><br />A classic (failed) example being the EU Currency Union, where the States USE a foreign currency, the EURO; over witch, individually, they have no "monetary policy" control. If you can't spend ("print" for those watching on CBeebies) new money into existence, you have to earn; beg; borrow or steal it from somebody else, that is when the bond vigilantes can screw you. The moral being, don't join a "currency union" if you can avoid it. (Scotland take note).<br /><br />If the bond vigilantes tried to force up the interest rate on a Pound Sterling Gilt, by selling it left right and center, The BoE can step in and say it will buy unlimited quantities of that Gilt if the interest rate goes above 2.4% say. The market price of that Gilt will go up, such that the Gilt yields 2.39%. The BoE just has to threaten to do it, it may not have to buy any of it to achieve the rate it wants. The ECB did the same thing with "Outright Monetary Transactions" OMT. It just had to threaten the Bond market and the peripheral States interest rates dropped.<br /><br />Remember that a sovereign currency central bank is the ISSUER of its particular sovereign nation currency. You can't get Pounds Stirling from any where else except the BoE. Likewise, the only place you can get Euros from, is the ECB. Every body else is a currency USER and they don't have a bottomless pit of money like a Central Bank. You can have a financial shock every other year and the Central Bank can never run out of its own money. There is no Bill it can't pay in its own currency. It can't default in its own currency. (Unless it wants to). Also remember that collection of annual government budget deficits, the so called "national debt" is the the private sectors savings; Pound for Pound; Euro for Euro.<br /><br />All the best AcornAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-72156058105775286782014-08-21T13:17:38.503+00:002014-08-21T13:17:38.503+00:00Let us review the BBC in economics.
In 2010 ther...Let us review the BBC in economics. <br /><br />In 2010 there was Hugh Pym, now moved to Health. <br /><br />There was Stephanie Flanders, who left, in her own words, to see that "We'll be living with the after-shocks of the 2008-09 financial earthquake for a long time yet. I'm going to carry on writing and thinking about all of that, and the deeper forces shaping the global economy. Though we haven't worked out the details, I promise in future you'll still be able to find out what I'm thinking about the world, if you want to. But from now on, it won't be at the BBC. In many ways, I will be doing the same thing in my new job at JP Morgan Asset Management that I have been doing as Economics Editor: explaining what is happening in the economy and markets, and why it matters."<br /><br />Replacing them has been Kamal Ahmed who "Kamal joined the BBC after four and a half years as business editor of the Sunday Telegraph's award-winning team."<br /><br />And Linda Yueh, who said on the BBC in 2009 that interest rates must go up at some point soon, and who "has maintained her academic links as a fellow of St Edmund Hall, University of Oxford, as an adjunct professor at London Business School, and as a visiting professor at Peking University. She was previously economics editor at Bloomberg TV and a corporate lawyer resident in New York, Beijing and Hong Kong. She is also the author of several books."<br /><br />I see further bad signs of familiar BBC intellectual decline, as the state broadcaster continues to pose as a player in the neoliberal marketplace in the hope no one will notice its a state broadcaster.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-43793528723816058152014-08-21T10:54:52.527+00:002014-08-21T10:54:52.527+00:00Hindsight revisited?Hindsight revisited?Anonymousnoreply@blogger.com