Nominal GDP

Richard Koo: If Helicopter Money Succeeds, It Will Lead To 1,500% Inflation

"if businesses and households were to resume borrowing in earnest, the US money supply could balloon to 15 times its current size, sending inflation as high as 1,500%. The corresponding ratios are 28 times for Japan and Switzerland, five times for the eurozone, and 11 times for the UK. Once private-sector demand for loans recovers in these countries, confidence in the dollar, euro, and yen will plummet."

This 'Market' Discounts Nothing Except Monetary Cocaine

In short, the market is not trading on a rebound in GDP, revenue growth or a breakout of already elevated profit margins. It’s just high on one more dose of monetary cocaine that in short order will prove to have been not even that.

"Something Big" Indeed Came - Bernanke's Japan Visit Unveils "Helicopter Money", Sparks Monster Rally

When we first heard this past Thursday that private blogger and Citadel employee Ben Bernanke was going to "secretly" meet with both the BOJ's Haruhiko Kuroda and Japan PM Abe, we warned readers that "something big was coming." Two trading days later, with the USDJPY higher by 200 pips and soaring after something big indeed came overnight from Japan: nothing less than the first "lite" instance of helicopter money .

Imagine...

Now imagine what might happen next...

There Is An Alternative To Yellen's Keynesian Bubble - Stockman Rages "Abolish The Fed"

The approximate hour Janet Yellen spent wandering in circles and spewing double talk during her presser yesterday was time well spent. When the painful ordeal of her semi-coherent babbling was finally over, she had essentially proved that the Fed is attempting an impossible task. And better still, that the FOMC should be abolished. The alternative is real simple. It’s called price discovery on the free market; it’s the essence of capitalism.

Steve H. Hanke's picture

The Saudi Squeeze

The rate of growth in a country’s money supply, broadly measured, will determine the rate of growth in its nominal GDP. For Saudi Arabia, the following table presents a snapshot of the relationship between the growth in the money supply (M3) and nominal GDP.

Why The Next Decade Will Foil Financial Plans

"This time is 'not different'. The only difference will be what triggers the next valuation reversion when it occurs. If the last two bear markets haven’t taught you this by now, I am not sure what will. Maybe the third time will be the 'charm'."

Fitch Cuts Japan's Credit Outlook To Negative

Following Abe's decision to delay the April 2017 increase in the consumption tax, warnings about Japan's rating (recall that Japan's consolidated debt/GDP ratio is the highest in the world at 400%) were inevitable, and moments ago Fitch was the first to come out and while "affirming" Japan's AA rating, it was the first major agency to cut its outlook from Stable to Negative. Expect the other two big agencies to do the same, followed inevitably by downgrades.

"The Whole Shebang Is Broke" - The Only Thing That's Growing Is Debt

Despite what the media try to tell you, as do the close to 100% manipulated economic data emanating from various -tightly controlled- sources, the economy is not growing, and it hasn’t for years; the only thing that grows is debt. And you can’t borrow growth. The single best thing to do for all of us not in positions of politico/economic power is to recognize the irreversible collapse of the system. Simply put, the whole shebang is broke.

Just Three Things

Historically speaking, it is unlikely that with reported earnings early in the reversion process that we will see a sharp recovery in the second half of the year as currently expected by the majority of mainstream analysts. As long as the Fed remains accommodative, the deviation between fundamentals and fantasy will continue to stretch to extremes. The end result of which has never “been different this time.”