Category Archives: Inflation

Bank of England, Bitcoin, BOJ, Budget, Central banks, Commodities, CPI, Crypto, ECB, Emerging Markets, Equities, Europe, Federal Reserve, Fiscal policy, Fixed Income, Government, Inflation, Japan, Keynesianism, Macro, Metals, money supply, Politics, Production, Revenues, Tech, UK, UK Treasury, US Treasury, USA

Burning Holes in Idlers’ Pockets

Posted on by Sean Corrigan

Inflation, Milton Friedman famously said, is a monetary phenomenon. But it is also one given the readiest of outlets through recourse to what we call ‘fiscal’ policy – i.e., by spendthrift governments borrowing money created at their call and forced into the system by means of warfare, welfare, contracting, cronyism, bureaucratic expansion and plain old boondogglery. Arguably, this is where we find ourselves today, in a world where supply is no longer likely to meet demand as abundantly and as effortlessly as has been the case these past twenty years.

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Bank of England, BOE, Bonds, Central banks, Corporatism, Credit, ECB, Europe, Federal Reserve, Fiscal policy, Fixed Income, Inflation, Macro, MMT, Money, Planning, Politics, QE, UK Treasury, US Treasury, USA

Tighten Your Belts: The Rationale

Posted on by Sean Corrigan

Markets seem happy for now to focus on the carrot of a vaccine while ignoring the stick of the further severe restrictions to life and liberty being implemented while we await its delivery. Whether or not it offers a release from bondage, the state’s rediscovered taste for authoritarianism will, however, take some good time to dispel, while its corollary – the move toward taking an ever greater role amid the wreckage of the private economy – is being pursued with relish. Whatever the sloganizing, this is very unlikely to Build anything Back Better – only dearer and scarcer.

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Bonds, China, Commodities, Elecction2020, Equities, Fixed Income, Forex, futures, Gold, Inflation, Japan, Metals, Money, money supply, Oil, Politics, US Treasury, USA

A Shot in the Dark

Posted on by Sean Corrigan

The ink has not even dried on the US ballot papers (!) but the Market already thinks it knows what this will all mean. And then there’s Pfizer’s vaccine announcement – perhaps similarly preliminary in nature – but, hey, the Herd will always take every silver lining it can find. Some of the themes we touched upon at the end of the Summer are still in play: Japan has been attracting money, non-oil commodities are rallying, gold has lost some lustre, bond yields are creeping higher, and Value may just be topping out at last v Growth.

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Austrian Theory, Banking, Bonds, Central banks, Credit, Cycles, Deflation, Economics, Fixed Income, Inflation, Intervention, Money, money supply, QE

Fire and Water

Posted on by Sean Corrigan

This essay attempts a review of the economics – and the prevailing economic thinking – which have brought us to our present pass of high-leverage and heavy debt-dependence. It helps set the backdrop for an in-depth look at markets which will follow shortly…

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Bonds, Budget, Central banks, Deficit, Federal Reserve, Fiscal policy, Fixed Income, Inflation, Saving, US Treasury, USA, Volatility, Yield Curve

MOVE-ing the Dial

Posted on by Sean Corrigan

Bond yields have started to creep higher – and curves to flex steeper – as the market begins to fret that the willing fiscal subservience of the central bank can only presage a coming inflation. With bond volatility still reasonably cheap, now might be the time to take cognisance of this.

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Bank of England, Budget, Central banks, Economics, Fiscal policy, Fixed Income, Forex, Government, Inflation, Intervention, money supply, Revenues, UK, UK Treasury

A Great Deal of Ruin

Posted on by Sean Corrigan

The Johnson government’s approach to COVID19 has been a toxic mix of contradiction, vacillation, and jackbooted authoritarianism. There seems no exit strategy and no end to the spiralling cost. We take a critical look at the impact on the budget impact and discuss what it means for inflation.

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Agriculture, Central banks, Commodities, COVID19, Credit, Energy, futures, Gold, Greens, Inflation, Metals, money supply, Oil, Production, Renewables, Tech

Dead Cat or Deep Value?

Posted on by Sean Corrigan

Since their Lockdown lows, commodities have performed as well as any other asset, though they still remain generally depressed. Can they now continue to rise?

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Banking, Budget, Deficit, Federal Reserve, Fiscal policy, Fixed Income, Government, Inflation, Macro, MMT, US Treasury, USA

Fiscal Free Lunch

Posted on by Sean Corrigan
[This is the first of a series of short bulletins called, ‘The Course of the Exchange’, in memory of John Castaing’s widely-read updates, posted in Jonathan’s Coffee House in Change Alley, 300 years ago]

With the latest CBO estimates for the US Federal budget for August just in, we are again in a position to take stock of the scale of the burden which the COVID-19 lockdowns and more general restrictions have imposed upon the nation’s finances. It does not make for happy reading.

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Banking, Central banks, China, Commodities, coronavirus, COVID19, ECB, Equities, Europe, Federal Reserve, Forex, Gold, Government, Inflation, Japan, Macro, Metals, money supply, Revenues, Tech, UK, USA

The Fall Approaches

Posted on by Sean Corrigan

OPEN ACCESS FOR A LIMITED TIME ONLY.
It’s not just the leaves that often turn when the year begins, with gathering pace, to slip towards its chilly end. Markets often do, too.

Given this backdrop, the sell-off in the Nasdaq – in the marvelled-at ‘Growth’ stocks, in the FAANGs, and in Tesla – comes at a moment which is particularly intriguing for reasons which go far beyond whatever coup SoftBank may or may not have attempted and whether those irritating Lockdown Livermores have finally gotten their comeuppance.

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Austrian Theory, Central banks, Economics, Federal Reserve, Fiscal policy, Inflation, Keynesianism, Liberty, Macro, MMT, Money, money supply

MMT Vessels Make The Most Noise

Posted on by Sean Corrigan

As a sort of Keynes-manqué, Stephanie Kelton’s moment in the limelight is being granted her for much the same reason as was that of her more illustrious predecessor: she is telling free-spending politicians what they always want to hear – viz., that their habitual incontinence is statesmanship of the highest order.
With our good professor never missing an opportunity to remind anyone and everyone that her book – a veritable almanac of economic hocus-pocus – tops the non-fiction charts (surely a gross miscategorization if ever there was), we must therefore re-emphasize our view that the REAL peril of Magic Money Tree economics – aka MMT – is what it means for the private sphere in general and the scope for genuine entrepreneurship in particular, NOT whether it causes prices to rise or not. The question is one of liberty, not inflation; real prosperity, not growth.

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