Tag Archives: Featured

On April 19, 2022, at the Economic Club in New York, the Chicago Federal Reserve Bank president Charles Evans said the Fed is likely to lift by year end its federal funds rate target range close to the neutral range of between 2.25 to 2.50 percent. Furthermore, on April 21, 2022, Fed chairman Jerome Powell corroborated this by stating that the Fed wants to raise its benchmark rate to the neutral level. By popular thinking, the neutral rate is one that is consistent...

For most experts, deflation is bad news since it generates expectations for a continued decline in prices, leading consumers to postpone the purchases of present goods, since they expect to purchase them at lower prices in the future. Consequently, this weakens the overall flow of current spending and this, in turn, weakens the economy. Economic activity, believe the experts, is a circular flow of money. Spending by one individual becomes the earnings of another...

Day 73 May 7 This is Liza. She is 15 years old. After her town got shelled and two people got injured she volunteered to drive them to get some medical help, because no one else would. First she got through mines on the road, then Russian soldiers shot at the car, injuring both of her legs. But she kept driving until the car stopped. Fortunately, they got picked up by our guys, and this brave little girl and her passengers are recovering right now....

Organic farming yields can be up to 50% lower than non-organic farming, depending on the product, claimed the Syngenta CEO. © Keystone / Peter Schneider Erik Fyrwald, the CEO of the Swiss agrochemicals group Syngenta, has called for an end to organic farming to avoid a worsening food crisis. The president of the Swiss Small Farmers’ Association meanwhile dismissed his arguments as “grotesque”. Rich countries should increase their agricultural production in order to...

The last few days of trading in silver have been a wild ride. On Wednesday morning in New York, six hours before the Fed was to announce its interest rate hike, the price of silver began to drop. It went from around $22.65 to a low of $22.25 before recovering about 20 cents. At 2pm (NY time), the Fed made the announcement. The price had already begun spiking higher for about two minutes. As an aside, we wonder a bit about how they keep privileged traders from peeking...

Cue up the old VHS tapes of Bill Clinton. The former President was renowned for displaying, anyway, great empathy. He famously said in October 1992, weeks before the election that would bring him to the White House, “I feel your pain.” What pain? As Clinton’s chief political advisor later clarified, “it’s the economy stupid.” Jay Powell is no retail politician in near the same company as Mr. Clinton. Yet, the Federal Reserve’s current Chairman is attempting to...

All of these similarities and differences are setting up a sea-change revaluation of capital, resources and labor that will be on the same scale as the extraordinary transitions of the 1920s and 1970s. The awakening of inflation after decades of slumber has triggered a flurry of comparisons to the 1970s accompanied by a chorus of projections for 1970s-type stagflation, defined as inflation plus economic stagnation– limited or negative growth and high unemployment....

This is the difference, though in the end it only amounts to a matter of timing. When pressed (very modestly) on the slow pace of the ECB’s “inflation” “fighting” (theater) campaign, its President, Christine Lagarde, once again demonstrated her willingness to be patient if not cautious. Why? For one thing, she noted how Europe produces a lot of stuff that, at the margins of its economy, make the whole system go. Or don’t go, as each periodic case may be: Europe in...

Last week, I received an email from a conservative-oriented libertarian who suggested to me that it is disloyal to “side with Russia” because Ukraine was “just sitting there” when it was invaded by Russia. Are you kidding me? “Just sitting there”? As in just innocently minding its own business? I don’t think so.  Sure, most everyone would concede that Russia had no legal authority to invade Ukraine, but that doesn’t necessarily mean that Ukraine was “just sitting...

A monetary system that allows the creation of money out of thin air is vulnerable to the fits of credit expansion and credit contraction. Periods of credit expansion typically occur over many years and even decades while the phases of credit contraction happen like sudden implosions. The monetary policy makers tend to promote the prolongation of credit expansion because they fear deflation. By doing this, however, the central banks prevent monetary moderate deflation...