Category Archives: MONETARY POLICY

MACROECONOMICS AFTER THE GREAT RECESSIO0N

 

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LINK TO IMF CONFERENCE PAGE WITH INTRODUCTORY VIDEO & DETAILED CONFERENCE PROGRAM

 

The IMF annual Research Conference  commencing today brings together the world’s leading  economists and policymakers as contributors and participants.

Olivier Blanchard, the former IMF Chief Economist being honoured at the conference, played a key role in addressing and demystifying unconventional monetary and macroeconomic challenges for policy makers,  economists and the rest of us.

Key messages from the conference will be discussed further on this blog.

RECORD RISE IN UK ALL SECTOR PMI POINTS TO ECONOMIC REBOUND

 LINK TO MARKIT AUGUST REPORT

The rapid transition in the UK  with the appointment of Theresa May as Prime Minister following the resignation of David Cameron has led to a welcome turnaround in UK business activity and sentiment with   support  from the the Bank of England

Prime Minister May has made it clear Brexit means Brexit. But it will be months and may be even years before we know what Brexit actually means.

This blog was launched to support work I have been doing  addressing the unconventional monetary policies adopted by central banks since the global financial crisis erupted in 2008.  A key element of the book is identifying reliable and accessible information resources for ordinary  investors in extraordinary times.  Markit is an important resource.

Previous postings on this blog have suggested keeping gold on the agenda for consideration when asset allocation decisions are being made.  A weaker currency is good for exporters but not for savers.

 

INFORMATION ON BREXIT

 

# Note added 11th April 2016

Monday 4th April  was an ambitious date to commence publishing on  an issue of enormous international interest.  Publication will commence when the information framework has been designed and tested as a useful resource, 

Posted on March 30th 2016  Commencing  Monday 4th April . This website will, as a content aggregator, publish links to news and commentary on the 23rd June British Referendum on either remaining in or leaving The European Union.

 

 

 

 

$5.5 TRILLION NEGATIVE YIELDING GOVT BONDS

# 5th February :  Above  Chart added reflecting negative Govt Bond Yields  across the yield curve notified by  The Daily Shot 

## Note Added 3rd Feb 2016:  Link to Bloomberg Quick Take on negative interest rates  – Link to Goldwatcher comment on the end of the long term debt cycle and negative interest rates

The total balance of government bonds with negative yields hit $5.5 trillion after the BOJ action on Friday according  to JPMorgan (via the Financial Times) and noted in The Daily Shot letter today

I posted a comment on www.thegoldwatcher.com   yesterday on approaching the end of the debt supercycle that started with the end of WW2 over seventy years ago. The comment addresses Ray Dalio’s warning that policy makers could find themselves pushing against a string.

Monetary policy works with a lag. When central banks were fighting inflation the analogy of pulling a stone with an elastic band was a popular way of explaining  the lag – you pull and pull and nothing happens ….. then the elastic tightens and wham,  the stone rockets back!

What happens when central banks find themselves pushing against a string?   Trillions of dollars and other currencies with negative yields?

 

 

 

 

THE FEDERAL RESERVE : INFORMATION +SIMPLE ARITHMETIC=COMMON SENSE

 The Fed Wants A World That Makes Sense Again

Noah Smith : Bloomberg

Years of positive economic signs led to the Fed’s decision to raise interest rates for the first time since 2008. Former Fed Vice Chairman Don Kohn explains that the focus now is on the long-term trajectory of the economy.

Don Kohn Brookings

Fed  Rate Changes over last 60 years Charts from Business Insider

APRIL 2015 INVESTOR LITERACY COMMENT QUOTING PAUL McCULLEY ON FED  INTEREST RATE PROSPECTS