Krugman

Weekend Reading: Will They, Or Won't They?

Will they, won't they, should they or shouldn't they? Those are the questions being hotly contested by the mainstream media on a daily basis. Of course, the reality is the Federal Reserve faces the huge obstacle of weak global growth and deflationary pressures which could very well keep them on hold well into 2016. The potential loss of credibility in the Fed by the markets could be the bigger issue to be concerned with. For now, we wait.

"Let's Go For A Big Cut" - ECB "Consensus Forming" For Far Greater Negative Rates, Reuters Reports

Compare and contrast:

- In the US, after 7 years of ZIRP and QE, the expected December rate hike is supposed to push up inflation and confirm the economy is improving; it is naturally bullish for stocks.
- In Europe, a year and a half of NIRP and a year of QE, a December rate cut further into negative territory is supposed to push up inflation and confirm the economy is improving; it is naturally bullish for stocks.

The BoJ Owns 52% Of The Entire Japanese ETF Market , And Now It Wants More

Haruhiko Kuroda owns 52% of all Japanese ETFs. And now he wants more. Facing a lack of willing JGB sellers, the BoJ now faces the possibility that ramping up its easing efforts will entail expanding the bank's already elephantine equity portfolio. "At a fundamental level, I don’t support the idea of central banks buying ETFs or equities. Unlike bonds, equities never redeem. That means they will have to be sold at some point, which creates market risk."

Sprott Money's picture

The Krugman Con

Gold’s biggest enemy is a brilliant Nobel Prize winning economist, university professor and columnist for the New York Times. Sadly, he is also a con man. 

America's "Inevitable" Revolution & The Redistribution Fallacy

"There are so many fault lines that the nation seems consumed by a conflict of all against all... there is an inevitable “revolution” coming because our politics, culture, education, economics and even philanthropy are so polarized that the country can no longer resolve its differences."

Japanese Firms Admit Abenomics Failed, Government Now "Left Trying To Redistribute Wealth"

Do not believe in official statistics, Japanese retailers seem to be saying, as they cut earnings forecasts and warn of lackluster consumer spending, a key growth engine for Japan at a time when exports and factory output are stalling. Despite government statistics claining a 2.9% rise in household spending, Reuters reports Japanese retailers exclaimed "Consumer spending has ground to a halt," as Japan heads for a quintuple dip recession. Amid falling wages and higher costs, on apparel maker warned "shoppers are tightening their purse strings." The government's initial growth strategy did not really expand the pie, "now the government is simply left trying to redistribute wealth."

ECB Will Boost QE By 120% To €2.4 Trillion, S&P Predicts

When a lot of Keynesian cowbell doesn't work, the only cure for the deflationary fever must be more Keynesian cowbell which explains why Japan is about to double down on Abenomics, and why the ECB will almost invariably expand PSPP now that the deflationary boogeyman is back in Europe. Indeed, S&P is now out calling for ECB Q€ to last for nearly two years longer than originally planned and for the size of the program to be expanded to a Dr. Evil-ish €2,400,000,000,000.

The Real Reasons Why The Fed Will Hike Interest Rates

With a complex and disaster-prone system of interdependence causing social strife and chaos, why not just simplify everything with a global currency and perhaps even global governance? The elites will squeeze the collapse for all it’s worth if they can, and a Fed rate hike may be exactly what they need to begin the final descent.