The Last Monetarists
Thursday and Friday presented the unusual spectacle of American equities, Treasuries and the dollar all falling at the same time.
The price of 10-year Treasury Notes dropped more last week than any week since June 2008; the rate rose above 3.4% for the first time since last November. The dollar tumbled below [...]
Looking for the Lost: the Shrinking American Consumer
Economic analysis anticipates the future through mathematical equations. If interest rates are reduced by a certain percentage then the economy can be expected to grow by x factor. The difficulty in accurate prediction arises from the assumptions disguised within the formulas. For the American consumer it [...]
How Will We Know When the Recession Ends?
There are two standard definitions of recession. The first, two succeeding quarters of negative GDP is traditional, straightforward and evident as the statistics are released. By this definition the United States has been in recession since the third quarter of 2008 when the economy contracted by 0.5% followed [...]
The Curious Case of Missing Intervention
Has central bank currency intervention gone out of style? Two extreme cases in the past year should have beckoned intervention: the all time high of the euro against the dollar last summer and the 15 year high of the yen in late January. But despite the damage that [...]
Credibility and the ECB
It has been a long road for the European Central Bank and its head Jean Claude Trichet. In less than a year the most anti-inflationary of the world’s central banks has moved from strict monetary conservatism to the verge of sub 1.0% interest rates and to serious consideration of quantitative easing, [...]
