Tuesday, 12 December 2017

WSJ

Sound Money for Ukraine

Posted by Alex Chafuen
February 26, 2014
in Blog

Another brilliant piece by Judy Shelton: “As Ukrainians mourn their dead and vow to prosecute their recently deposed leader, the valor of those who died must now inspire others to build a new Ukraine worthy of their struggle and sacrifice. Democracy and a better future must be secured in pragmatic terms. Economic benefits must begin […]

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Is Deleveraging “Bad for the Economy”?

Posted by Tyler Watts
December 19, 2011
in Blog

A while back there was a story in the Wall Street Journal (“America’s Debt Cutting Hampers Growth,” Oct. 22) about deleveraging in the U.S. economy. American households, burned by the recession, have a new-found frugality and are reducing their overall debt loads for the first time in decades. Looks like a lot of people learned […]

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Why We Can’t Escape the Eurocrisis

Posted by Gonzalo Schwarz
November 2, 2011
in Blog

EU and U.S. debt are interlinked through the banking system. By GERALD P. O’DRISCOLL JR. When is a bailout not a bailout? When the bailor is short of funds. The recently announced debt plan in the European Union comes up short in almost all respects. The debt crisis is not just an EU problem, but a […]

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“Barney Frank’s Latest Bad Idea” – WSJ

Posted by Tom Duncan
May 31, 2011
in Blog

“Mr. Frank’s bill is simple and remarkably short by Washington standards: two pages. It would strike the language in Section 12A of the Federal Reserve Act that provides for voting membership by the New York Fed and rotating voting membership by the other 11 Federal Reserve banks on the Federal Open Market Committee (FOMC). Monetary […]

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“The Return of Stagflation” – WSJ

Posted by Tom Duncan
May 24, 2011
in Blog

“‘Stagflation” is an ugly word for an ugly situation: persistent high inflation combined with high unemployment and stagnant demand in a country’s economy. The term was coined by British politician Iain Mcleod in a speech to Parliament in 1965. We haven’t experienced it here in the United States since the bad old days of the […]

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“Bernanke’s Code: A Guide to Fed Chairman’s First Q&A” – WSJ

Posted by Tom Duncan
April 27, 2011
in Blog

“When Federal Reserve Chairman Ben Bernanke makes his debut press conference Wednesday, his every word will be parsed for signs of where he hopes to take U.S. monetary policy. Specifically, many people want to know when the central bank will begin raising interest rates, and when it will begin off-loading some assets, including Treasurys and […]

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“Monetary Reform: The Key to Spending Restraint” – WSJ

Posted by Tom Duncan
April 26, 2011
in Blog

“No man in America is a match for House Budget Committee Chairman Paul Ryan on the federal budget. No congressman in my lifetime has been more determined to cut government spending. No one is better informed for the task he has set himself. Nor has anyone developed a more comprehensive plan to reduce, and ultimately […]

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“Markets Get Ready to Navigate Fed’s Departure” – WSJ

Posted by Tom Duncan
April 25, 2011
in Blog

“Senior Fed officials believe they will be able to push up the fed-funds rate, the traditional benchmark for short-term interest rates, but not by the usual means of simply selling relatively small amounts of Treasury securities to soak up bank reserves. Instead, they are looking at a new tool, raising the interest rate that the […]

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“Crises Nudge Debt Loads to Brink” – WSJ

Posted by Tom Duncan
March 28, 2011
in Blog

“The financial strains created by crises in Japan and Europe highlight a growing problem: The rich world is getting close to the point where it won’t be able to bear the costs of another disaster. Japan and Europe face very different crises—one brought on by nature, the other man-made. But from a financial perspective, they’re […]

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“AIG, Fed, in Sub-Prime Bond Standoff” – WSJ

Posted by Tom Duncan
March 21, 2011
in Blog

“American International Group Inc. is trying to force the hand of the Federal Reserve on a large portfolio of subprime-mortgage bonds it wants to repurchase, putting the central bank in the position of weighing taxpayers’ interests against those of the government-controlled insurer. Earlier this month, AIG disclosed an offer to pay $15.7 billion, or roughly […]

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“To Avert Criticism, Fed Avoids Saying ‘Core'” – WSJ

Posted by Tom Duncan
March 14, 2011
in Blog

“Fed officials have for years cited “core inflation,” a measure that excludes food and energy prices. That is because core inflation tends to be a useful predictor of inflation over a couple of years, which they call the medium term, a period that is key to monetary-policy decisions. But this focus has drawn criticism that […]

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“Economists React: Inflation Higher Than Expected” – WSJ

Posted by Tom Duncan
March 11, 2011
in Blog

“Despite government efforts to rein in inflation, China’s consumer price index in February rose 4.9% from a year earlier for the second straight month–well above the government’s target of 4%–the National Bureau of Statistics said Friday. China’s producer price index, a measure of inflation pressures in the pipeline, rose 7.2% from a year earlier, up […]

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“Oil Jump Presents Conundrum for Fed” – WSJ

Posted by Tom Duncan
March 8, 2011
in Blog

“Two top Federal Reserve officials on Monday offered conflicting views on the right response to higher oil prices, kicking off what’s likely to be a lively debate within the central bank. While Dallas Fed President Richard Fisher signaled higher oil prices may lead the central bank to roll back its huge monetary stimulus to prevent […]

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“Why Dollar’s Reign Is Near An End” – WSJ

Posted by Tom Duncan
March 3, 2011
in Blog

“The greenback, in other words, is not just America’s currency. It’s the world’s. But as astonishing as that is, what may be even more astonishing is this: The dollar’s reign is coming to an end. I believe that over the next 10 years, we’re going to see a profound shift toward a world in which […]

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“Ron Paul to Bernanke: ‘Define the Dollar'” – WSJ

Posted by Tom Duncan
March 2, 2011
in Blog

“Long-time Fed basher Rep. Ron Paul (R., Texas), who wrote a book titled “End The Fed,” squared off Wednesday with Fed Chairman Ben Bernanke at a hearing on Capitol Hill and wasted little time going after the central bank. “The real cause of price inflation, which is a deadly threat to us right now, is […]

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“Commodity-Price Gains Dog Bernanke’s Inflation” – WSJ

Posted by Tom Duncan
March 2, 2011
in Blog

““I just see a continuation of rising prices for the average family,” at a time where the Fed is constructing policies to ward off what it sees as the threat of deflation, Sen. Bob Menendez, a New Jersey Democrat told Bernanke. When told by Bernanke that core inflation levels were quite low and Fed policies […]

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“Dollar’s Fall Rocks Far-Flung Families” – WSJ

Posted by Tom Duncan
February 25, 2011
in Blog

“The world’s currencies are gyrating, but the strains are being felt beyond financial capitals and corporate boardrooms. Millions of families in developing countries rely on relatives sending dollars, euros and other weakened currencies from abroad to prop up spending at home.” Read more.  “Dollar’s Fall Rocks Far-Flung Families”  James Hookway  Wall Street Journal, February 25, […]

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“The Federal Reserve Is Causing Turmoil Abroad” – WSJ

Posted by Tom Duncan
February 23, 2011
in Blog

“China and India blame the U.S. Federal Reserve for their difficulties in maintaining stable prices. The International Monetary Fund and the United Nations, always responsive to the complaints of developing nations, are suggesting alternatives to the dollar as the pre-eminent international currency. The IMF managing director, Dominique Strauss-Kahn, has proposed replacement of the dollar with […]

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“Split in Economy Keeps Lid on Prices” – WSJ

Posted by Tom Duncan
February 18, 2011
in Blog

“Goods inflation has outstripped services inflation for long stretches since mid-2007, something that hadn’t happened since the 1970s. For most of the last 30 years, goods prices had been held down, in part, by cheap imports from low-wage countries like China. But recently, China and other developing markets have become huge consumers of commodities, which […]

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“Deja Deflation Fear” – WSJ

Posted by Tom Duncan
February 18, 2011
in Blog

“Alas, consumers cannot choose to pay the “core” price at the grocery store or gas station. They feel the increase in food and energy prices in reduced purchasing power whether or not the Fed cares about those prices. Wall Street may see a “wealth effect” from rising stock prices, but average Americans see a slower […]

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“Bill Gross Cuts Government Bond Holdings Again” – WSJ

Posted by Tom Duncan
February 14, 2011
in Blog

“The Pimco Total Return Fund is the world’s largest bond fund, so Bill Gross’ market moves and musings can carry a lot of weight in the markets. Gross is founder and co-chief investment officer of Newport Beach, Calif.-based Pimco. Billy has been griping quite a bit lately about the current policy stance of the Fed, […]

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“Time For Fed to Step Up Its Transparency” – WSJ

Posted by Tom Duncan
February 7, 2011
in Blog

“Among ideas being considered to create more openness: more news conferences with Chairman Ben Bernanke, who last week had a rare question-and-answer session with reporters. But attempts to increase transparency should go beyond monetary policy to include bank supervision. Consider stress tests the Federal Reserve is conducting to decide if big banks can return capital […]

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“Ben Bernanke’s ’70s Show” — WSJ

February 7, 2011
in Blog

“In the 1970s, despite rising inflation, members of the Federal Reserve’s policy committee repeatedly chose to lower interest rates to reduce unemployment. Their Phillips Curve models, which charted an inverse relationship between unemployment and inflation, told them that inflation could wait and be addressed at a more opportune time. They were flummoxed when inflation and […]

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“Bond Market Flashes Inflation Warning” – WSJ

Posted by Tom Duncan
February 7, 2011
in Blog

“The U.S. bond market has begun sending a message that inflation risks are rising and the Federal Reserve may be too slow to act, potentially marking a significant turning point in the economic recovery. In the past week, Treasury-bond yields have jumped to their highest levels since last spring. Yields on 10-year Treasurys surpassed 3.5% […]

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The Wrong Way to Double Exports – Judy Shelton

Posted by Judy Shelton
January 26, 2011
in Blog

Beware of President Obama’s call for a doubling of U.S. exports over the next five years as a way to reduce the unemployment rate. The obvious quick route to export success for any nation is to depreciate its currency. Dollar depreciation is already being pushed by the Obama administration as the key solution for resolving […]

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“Global Price Fears Mount” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman. In […]

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“New Push at Fed to Set an Official Inflation Goal” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Federal Reserve officials last year, prodded by Chairman Ben Bernanke, seriously considered adopting an explicit target for inflation of 2%, but Mr. Bernanke failed to forge a consensus and backed away. The issue could resurface in 2011. The Fed informally has said its goal is inflation of around 2%. But after years of internal debate […]

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“Dodd-Frank and the Return of the Loan Shark” – WSJ

Posted by Tom Duncan
January 19, 2011
in Blog

“Banks can also drop riskier borrowers completely. In his letter to shareholders last spring, Jamie Dimon of J.P. Morgan Chase reported that, “In the future, we no longer will be offering credit cards to approximately 15% of the customers to whom we currently offer them. This is mostly because we deem them too risky in […]

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“A Worried Government Trapped On Inflation” – WSJ

Posted by Tom Duncan
January 18, 2011
in Blog

“There is a moral dimension, too. Coupled with interest rates being close to zero, inflation is an instrument of war against savers. It rewards those who have been irresponsible — governments that borrow too much and consumers who do similar — and punishes those who have behaved responsiblely by choosing to live within their means […]

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“M&S Warns of Rising Inflation” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“Marks & Spencer Group PLC is facing the specter of rising inflation as it fights for market share in the fiercely competitive U.K. grocery and clothing market, just as the government’s austerity cuts start to bite. The U.K. high street bellwether has enjoyed a strong third quarter, including the key Christmas period, when same-store sales […]

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“New Move to Make Yuan a Global Currency” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“China has launched trading in its currency in the U.S. for the first time, an explicit endorsement by Beijing of the fast-growing market in the yuan and a significant step in the country’s plan to foster global trading in its currency. The state-controlled Bank of China Ltd. is allowing customers to trade the yuan, also […]

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“Bernanke Rejects Bailouts” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“Mr. Bernanke played down the risk of a major municipal-bond crisis, noting that muni markets have been functioning normally, with healthy trading volumes and lots of issuance. But he said that if municipal defaults did become a problem, it would be in Congress’s hands, not his. “This is really a political, fiscal issue,” he said. […]

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“U.K. Think Tank Sees 20% Chance of Euro’s Survival” – WSJ

Posted by Tom Duncan
January 11, 2011
in Blog

“Europe’s common currency, battered for more than a year by a sovereign debt crisis, is unlikely to survive the next decade in its current form, the Center for Economics and Business Research warned Friday. In a list of top 10 predictions for 2011, the CEBR, a U.K.-based think-tank, gave the euro a slim one-in-five chance […]

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“Inflation on the Rise in Latin America” – WSJ

Posted by Tom Duncan
January 7, 2011
in Blog

“Consumer prices are rising at a quick pace in the some of the largest economies in Latin America, complicating the task of governments that want to maintain high growth rates without sparking inflation. On Friday, Brazil announced that consumer prices in 2010 had increased faster than the government’s targeted levels, mainly driven by higher food […]

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“The Fed’s Dual Mandate Is Not The Problem” – WSJ

Posted by Tom Duncan
December 28, 2010
in Blog

“While some clarification of its price-stability mandate might help, the central bank is already required to keep credit growth in check. Its full legal mandate is as follows: “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of monetary and credit aggregates commensurate with […]

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“For Tough Fed Call, Even Hindsight Is Not 20/20” – WSJ

Posted by Tom Duncan
December 27, 2010
in Blog

“The world has changed since the Federal Reserve decided in November to purchase an additional $600 billion of U.S. Treasury bonds to give the U.S. economy a lift. The U.S. economy looks stronger. The government is unexpectedly cutting taxes. The Fed is facing stiff political criticism at home and abroad. In part as a result […]

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“Is the Fed Printing Money?” – WSJ

Posted by Tom Duncan
December 23, 2010
in Blog

“The Fed has been buying bonds since early 2009. When a private investor buys bonds, the investor uses cash or sells some existing asset to raise cash and uses that money to buy bonds. The investor might also borrow money from a bank and use the borrowed funds to buy securities on margin. The Fed […]

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“The Fed’s Bipolar Mandate”

Posted by Tom Duncan
December 15, 2010
in Blog

“The contradictions were as apparent then as now; as Mr. Corker puts it, a central bank cannot have “a bipolar mandate.” The pressure to bring down unemployment using money creation during difficult economic times will inevitably complicate the task of maintaining stable prices. As the Fed pushes money out the door, whether or not there […]

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“Watch What the FOMC Doesn’t Say”

Posted by Tom Duncan
December 15, 2010
in Blog

“The aim of QE2 has been to lower medium-to-longer-term interest rates since the Fed’s main policy variable—the overnight federal funds rate—has been pinned near zero for two years. But since the Nov. 3 FOMC meeting, Treasury yields have done precisely the opposite of what the Fed intended. The two- and five-year note yields have nearly […]

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“Credit-Card Borrowing Dips, but Student Loans Jump”

Posted by Tom Duncan
December 7, 2010
in Blog

“Consumer credit outstanding increased at a seasonally adjusted annual rate of 1.7%, up by $3.4 billion to $2.4 trillion, a Federal Reserve report said Tuesday. The gain was the second in as many months following 19 straight losses. Economists surveyed by Dow Jones Newswires had predicted a $2 billion decline in October consumer credit. The […]

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“Bernanke: China ‘Risking Inflation’ With Currency Policy”

Posted by Tom Duncan
December 6, 2010
in Blog

“Federal Reserve Chairman Ben Bernanke said China is “risking inflation” in its own economy, while threatening other nations, by not allowing its currency to appreciate. In an interview with CBS’s “60 Minutes” posted on the program’s Web site, Mr. Bernanke said China’s policy was “not even in their own interest” in addition to hurting others. […]

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Why Do We Have a Central Bank?

December 6, 2010
in Blog

by Gerald P. O’Driscoll, Jr. Why do nations have central banks? Countries have developed without one, and sophisticated financial systems have evolved in their absence. Some countries with a central bank have suffered for having one. Zimbabwe comes to mind. The Federal Reserve System was created by an act of Congress only in 1913. It […]

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“Public Still Feels Inflation’s Pinch” – WSJ

Posted by Tom Duncan
November 29, 2010
in Blog

“Of course, the inflation any individual faces almost surely differs from the government’s aggregate data. Outside of housing, middle-income consumers have experienced more inflation than other income groups over the past year, in part because they devote a relatively large share of their budget to energy and transportation. For the year ended in October, prices […]

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“Argentina Seeks IMF Help to Start New Inflation Index”

Posted by Tom Duncan
November 24, 2010
in Blog

“Argentina’s government, in an unexpected shift toward economic pragmatism, said it was seeking technical assistance from the International Monetary Fund to design a new inflation index that could help restore credibility to official statistics. Economists said the IMF statistical input, coupled with Argentina’s recent announcement that it would negotiate with the Paris Club of lender […]

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“Central Bankers Give In, And Discuss the Dollar”

Posted by Tom Duncan
November 22, 2010
in Blog

““It’s hard to make a strong case” the Fed’s bond-buying program can now aid the economy through lowering rates, said Stephen Stanley, chief economist with Pierpont Securities. He said that leaves the Fed relying on the “secondary mechanisms” of monetary policy, most notably the trade benefits of a lower dollar. “They want to see [a […]

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“Bernanke Makes Case to Senators”

Posted by Tom Duncan
November 18, 2010
in Blog

“Federal Reserve Chairman Ben Bernanke defended the central bank’s plan to buy government bonds during a private gathering with U.S. senators, responding to several days of attacks from Republicans who say the Fed is causing inflation and weakening the dollar. The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase […]

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“Fresh Attacks on Fed Move”

Posted by Tom Duncan
November 17, 2010
in Blog

“A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve […]

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“Ben Bernanke’s Impossible Dream” – WSJ

Posted by Tom Duncan
November 10, 2010
in Blog

“At Jackson Hole, Mr. Bernanke explained that “if inflation expectations were too low . . . an increase in inflation expectations could become a benefit.” Well, he’s certainly succeeded in raising inflationary expectations. But rising commodity prices and a debased dollar have proved harmful to many businesses because inflated costs mean deflated profit margins. The […]

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“Fed’s Hoenig: Fed Needs To Increase Key Rates, Normalize Policy”

Posted by Tom Duncan
November 5, 2010
in Blog

“The Federal Reserve’s vocal dissenter stood his ground against ultraloose monetary policy Friday in a week that the Fed opened the floodgate to loose additional dollars into the system. Federal Reserve Bank of Kansas City President Thomas Hoenig on Friday said the Fed needs to move rates “off of zero” to ensure a more stable […]

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“Fed to Buy $600 Billion of Treasurys”

Posted by Tom Duncan
November 3, 2010
in Blog

“The Federal Reserve Wednesday unveiled a controversial new plan to buy U.S. Treasurys, hoping to spur growth in a disappointingly slow U.S. economy. After two days of discussions, Fed officials decided to go ahead with a much anticipated program, saying they will buy $600 billion of U.S. government debt over the next eight months. The […]

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