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  • The Fed Manipulating Stock Prices? So What? [View article]
    Thanks for the rationality SU.

    Too many (Zero Hedge included) get sidetracked by the accounting and what they think should be the "right" numbers for GDP, equities, interest rates, etc. What we should really be focused on is real output and real quality of life. Are our people educated and employed? Is our infrastructure as good as it should be? These are the questions we should be asking instead of ones that in the end are only about numbers on a spreadsheet.
    Mar 15 12:36 AM | 2 Likes Like |Link to Comment
  • The Great Disappearing Public Debt? [View article]
    I'm an American currently living in Singapore, and I can tell you it is far from the economic paradise you claim. It has many underlying problems that are kept in check by an authoritarian regime (albeit one that resembles Mickey Mouse) with the most serious being the massive wealth disparity between the haves and have-nots. Trust me this is not an economic system that the US should or could imitate.
    Feb 24 06:15 PM | 2 Likes Like |Link to Comment
  • American Monetary Lessons From Japan's Last 2 Decades [View article]
    "why not let the Bank of Japan (BoJ) buy many more government bonds now that the main worry is the exploding public debt?"

    The argument against this and other forms of QE is that to the extent they remove government liabilities, they also remove interest payments to bond holders that reduces aggregate demand. There may be rational policy reasons for QE, but very few if any economic ones.
    Jan 25 09:29 AM | 1 Like Like |Link to Comment
  • Papua New Guinea, A Last Frontier Of Energy Exploration [View article]
    Great article. If possible could you provide a link for the BP study?

    I'm involved in m&a in Singapore and oil & gas out of PNG and other nearby areas is getting a lot of attention.
    Jan 21 06:58 AM | 2 Likes Like |Link to Comment
  • If No Trade Reversal Now, Then When? [View article]
    Excellent article, glad to see Prof Pettis back from the holidays.

    What many of the commenters here are missing and what the article correctly identifies is that the overwhelming reason for trade deficits today is not because of the moral superiority of the surplus nations (the Germans earned it), nor the inferiority of those nations with deficits (the profligate should pay), but because of non floating exchange rates.

    The Euro can be viewed as system which forces Europe to use a derivative of the Deutsche Mark, and the Chinese massively intervene with the RMB. By fixing the exchange rate, surplus nations are able to guarantee surpluses; no moral superiority needed.
    Jan 11 04:09 AM | 2 Likes Like |Link to Comment
  • Stiglitz's Crisis Narrative: The End Of Work? [View article]
    A modest proposal to solve this crisis would be the widespread application of the soylent green model.

    Seriously though we live in a world awash in things that need doing. It is the Federal government's duty to maintain aggregate demand by growing the money supply (cut taxes) and to direct funds towards socially beneficial goals (spend money).
    Jan 7 05:02 AM | Likes Like |Link to Comment
  • Dealing With Debt: What Investors Should Expect [View article]
    Much ado about nothing... Has our nation been leveled by war, hit with a monster typhoon, or has much of the population been stricken with plague? Well no, our productive capacity and ability to innovate remain. Thus the only horror we face are accounting items such as debt/GDP and the like... What a joke, excuse me if this doesn't keep me up at night.

    What this very confused (manipulative?) author fails to understand is that unlike Greece, we control our own currency. This means that we determine the interest rates we pay, and can never run out of money. The only limitations that we face are real ones such as how much oil is in the ground and the education level of our people. The rest is merely ACCOUNTING. As long as inflation is under control, government debt can be increased.

    Seriously folks, sit down and think about it for a second: where do the banks get the money they 'lend' to the government? Do you really think the government can run out of money?
    Jan 1 11:07 PM | Likes Like |Link to Comment
  • What Really Caused The Recession? [View article]
    Convincing case. Would be interesting to see real estate prices compared with the trade deficit (and other leakages) and perhaps explain what happened to the market for homes.
    Dec 31 05:38 AM | 1 Like Like |Link to Comment
  • What Really Caused The Recession? [View article]
    "before something is consumed it has to be produced" Obviously, but why was it produced in the first place? No one produces just for the sake of producing, they do so because they are anticipating demand. Demand in the aggregate is limited by spending power which the government can expand or contract via fiscal policy.
    Dec 31 05:36 AM | 1 Like Like |Link to Comment
  • A Warning Sign That Might Help You Avoid The Next Sears [View article]
    Very interesting article. Do you have other examples of when excessively priced protection presaged a drop in prices?
    Dec 29 10:12 PM | Likes Like |Link to Comment
  • Why Free Markets Are Not Always The Best Solution [View article]
    I agree that we should be looking at real goods and services, but by indicting finance as zero-sum you are essentially saying that capitalism creates no value, which historically is clearly not the case.

    A case in point is when investment or consumption leads to increases in production. If my investment in IBM or consumption in IBM services leads to the growth of total output of IBM, then my spending is not simply taking out of someone else's mouth to fill my own and is not a zero sum activity.

    The key point you are missing is that the total supply of goods and services is not fixed AND the limiting factor is often not lack of raw materials but a lack of capital.
    Dec 28 09:02 PM | Likes Like |Link to Comment
  • Who Actually Benefits From The Euro? [View article]
    SU, are you advocating that the rest of Europe emulate Germany economically? To do so would require Europe to adopt German attitudes towards work, authority, laws, and so on, and would be equivalent to cultural imperialism. Why must Europe be punished for being non-German?
    Dec 28 08:50 PM | Likes Like |Link to Comment
  • Why Free Markets Are Not Always The Best Solution [View article]
    Re: "finance is basically a zero-sum game" I'd disagree a bit with you there. It depends the market and strategy. Assets that produce cash flows (equity, debt) are not zero sum as long as one is not betting on the "greater fool" to buy later at a higher price. On the other hand assets that don't produce cash flows (commodities, currencies) depend solely on finding someone to buy later at a higher price.
    Dec 28 01:10 AM | Likes Like |Link to Comment
  • China Steps Up Its Nuclear Program.  [View instapost]
    I wonder how much of the demand for electricity comes from building projects (white elephant or otherwise) including nuclear power stations.
    Dec 27 02:25 AM | Likes Like |Link to Comment
  • The Trouble With Modern Monetary Theory [View article]
    CNBC has a nice write up on MMT here:

    It's a good, balanced article because the author understands the value the MMT perspective adds, but is not shy in criticizing the policy prescriptions some in MMT advise.
    Dec 27 02:15 AM | Likes Like |Link to Comment