Nobel Laureate

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)

"Irreversibly Broken & Dysfunctional" - There's Something Wrong In The Markets

Today’s dilemma – for financial markets and central bankers – is that pushing back against nascent “risk off” unleashes another forceful bout of “risk on.” At this point, it’s either Bubble on or off – destabilizing either way. The global Bubble has grown too distended and the market backdrop too dysfunctional. Central bankers over the past 25 years have created excessive “money,” while incentivizing too much finance into financial speculation. There is now way too much “money” crowded into the securities and derivative markets, and the upshot is an increasingly hostile backdrop for leverage and speculation.

For WHO, Red Meat Is A Red Herring

Our booming green-industrial complex built up by administrations of both parties in the US is effectively using the United Nations, its thirty two “sister” institutions — such as the World Bank, UNESCO, and numerous “tribunals” — and hundreds of training and research centers. This huge international bureaucratic buildup is already employing over a million “international civil servants” to administer what our socialist visionaries hope will become the world government of the future.

Systemic Fragility & The Fed's "Hobson's Choice"

The previous Bubble was of the Fed’s making, and our central bank lost control. It became a Hobson’s Choice issue in the eyes of the Fed, and they fully accommodated the Bubble. These days, the Fed and global central bankers face a similar but much more precarious Bubble Dynamic: The Fed specifically targeted higher securities market prices as its prevailing post-mortgage finance Bubble (“helicopter money”) reflationary mechanism. This ensured that the Fed would again be unwilling to impose any monetary restraint before it would then become too risky to remove accommodation (Einstein’s definition of insanity?). In concert, global central bankers now aggressively accommodate financial Bubbles.

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."