Nobel Laureate

Meanwhile, As The World Watched The Election... This Happened

So here we are, disgust from so many, euphoria from others, and LOTS of uncertainty about what’s to come. Meanwhile, all the disgust and euphoria - these are intense emotions that cloud judgment. We human beings tend to make very bad decisions... and miss a lot of important cues... when we’re emotional.

'Last Economist Standing' John Taylor Urges "Less Weird Policy" At Jackson Hole

Infamous rules-based economist John Taylor attended the first monetary-policy conference in Jackson Hole in 1982, and he may be the only person to attend both the 1st and the this year's 35th. With Fed policy the easiest (relative to economic fundamentals) every in history, Taylor has one wish for an outcome... "less weird policy"

Why Donald Trump's "Sound Money" Stance Scares The Mainstream

The notion that something good might come out of a Trump policy elicits guffaws in certain economic circles. However, by insisting that the U.S. Treasury label China a “currency manipulator” and by promoting trade that is both free and “fair,” Mr. Trump may be laying the groundwork for a significant breakthrough in international monetary relations - one that could ultimately validate the rationale for an open global marketplace and restore genuine free trade as a vital component of economic growth.

Stephen Roach Says Trump's Right On Globalization: It's A Broken System

"While seemingly elegant in theory, globalization suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump in the United States. And it also underpins the increasingly virulent anti-China backlash now sweeping the world. Those who worship at the altar of free trade, including me, must come to grips with this glaring disconnect."

"The Great White Hope"

“Angry white male” is now an acceptable slur in culture and politics. So it is that people of that derided ethnicity, race, and gender see in Donald Trump someone who unapologetically berates and mocks the elites who have dispossessed them, and who despise them. Is it any surprise that militant anti-government groups attract white males? Is it so surprising that the Donald today, like Jess Willard a century ago, is seen by millions as “The Great White Hope”?

Finance + Stress = Suicide (Or Trump)

The mortality rate for whites 45 to 54 years old with no more than a high school education increased by 134 deaths per 100,000 people from 1999 to 2014. For the first time in history the life expectancy of white American women had decreased, due primarily to drug overdose, suicide and alcoholism. The demographic groups that are experiencing the highest rates of drug overdose, suicide and alcoholism are also the most likely to be supporters of Donald Trump in his campaign for the U.S. Presidency. It does not take a Nobel Laureate to observe a high level of distress among white middle-class Americans. Trump simply taps into that angst.

Pimco Economist Has A Stunning Proposal To Save The Economy: The Fed Should Buy Gold

"In the context of today’s paralyzed political-fiscal landscape how silly is it to suggest the Fed purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce?  Admittedly, this suggestion is almost too outrageous to post under the PIMCO logo, but NIRP surely would have elicited a similar reaction a decade ago. But upon reflection, it could be an elegant solution since it flips the boxes on a foreign currency “prisoner’s dilemma”. Most critically, a massive gold purchase has the potential to significantly boost inflationary expectations, both domestic and foreign."

Central Bank Money Printing - The Rotten Philosophy That Lies Beneath

Taking away from the government its power of compelling the citizenry to accept money that it monopolistically controls and abuses may serve as an important legal and economic change to force the government and those who live at its spending trough to face the reality of the welfare state’s ideological and fiscal bankruptcy before it is too late to avert a complete collapse of the society.

Frontrunning: December 11

  • Futures down sharply as oil hits seven-year low (Reuters)
  • Oil slides to new seven-year low as IEA warns of worse glut (Reuters)
  • But... but... they all said... Cheap Oil Gives Little Help to U.S. Spending (WSJ)
  • Disappearances in China Highlight Ruling Party Detention System (BBG)
  • China’s Credit Rebounds as Stimulus Helps Boost Loan Demand (BBG)
  • Junk Fund’s Demise Fuels Concern Over Bond Rout (WSJ)