Monthly Archives: June 2010

Money’s key function is means of exchange (beats bartering). Most money is created by the financial system. When it creates a loan, ‘new’ money is created. (A new entry is created in the asset ledger of the financial institution, which is the loan that you need to repay. A similar entry is created on the […]

If you can access it, be sure to read Predictions of a Bond Market Bubble are Wrong, by David Rosenberg writing in today’s FT. It clarifies much confusion about the inflation/deflation outlook and is consistent with the periodic emphasis here on the irrational fears of inflation in the midst of a global surfeit of productive […]

I am by training and background a professional economist. In 2005 I began writing a dissertation on the international monetary dimensions of the Great Depression. As recently as 2009 I was downplaying the notion that my studies had much to say about the current business cycle. Today, however, we are seeing a policy approach that is […]

more to come

We believe … that the present direction of economic policy may soon prove to be unsustainable. If the conditions do not exist for the realisation of a development plan based on the objectives outlined, there will be an extemely high risk of debt-driven deflation and the consequent disintegration of the euro zone. This is because some countries […]

Abridged by Brad de Long. (Politicians) talk about the need to restore “confidence in the markets”. The argument here is that deficits do positive harm by destroying business confidence… fear of higher taxes, fear of default, fear of inflation…. The parallel with what happened in 1931 is irresistible. In February of that year, Philip Snowden, […]

17 Jun, 12.30 Argentina v South Korea World Cup Group B 17 Jun, 15.00 Greece v Nigeria World Cup Group B 17 Jun, 19.30 France v Mexico World Cup Group A

Moody’s today cut Greece sovereign debt to ‘junk’ status, citing threats to growth. “If they still need to take additional measures to reduce the debt because of slow growth, that would be a difficult political decision … because obviously that entails still more sacrifice on the part of the population,” Moody’s told Reuters. And that’s the […]

Slovenia’s Milivoje Novakovic evades a tackle by Algeria’s Hassan Yebda. Photo: Reuters/Christian Charisius. Italy’s Giorgio Chiellini fights for the ball with Paraguay’s Lucas Barrios. REUTERS/Carlos Barria