arkmundi
10 MW
Wall Street Journal: BIS Warns of Overreliance on Monetary Policy
Another great article as economic analyst of every stripe ponder the implications...
Three depressing lessons from the Greek debt negotiations
An interesting footnote in the ongoing saga. They say "begets" - its unravelling. They say "broader malaise" - really meaning so sick its on a death spiral. And being what it is, a contagion, it'll be epidemic.Indeed, the BIS noted in its report that from December 2014 until the end of May, an average of $2 trillion in global long-term government bonds—much of it in the eurozone—carried a negative yield. “Such low rates are only the most obvious symptom of a broader malaise, despite the progress made since the crisis,” the BIS wrote.
Rather than reflecting global economic weakness, these ultralow rates may be feeding it by destabilizing financial markets, pushing up debt and weakening growth. “In short, low rates beget lower rates,” the report stated.
The common justification for super-easy monetary policies has been very low rates of inflation, particularly in developed economies. Central banks have in recent years coalesced around 2% as their preferred target for annual consumer-price increases.
The plunge in oil prices in late 2014 and early 2015 brought consumer prices into negative territory in the U.S. and Europe, although inflation was firmer when volatile food and energy prices were excluded.
Another great article as economic analyst of every stripe ponder the implications...
Three depressing lessons from the Greek debt negotiations
Meaning the spectre of war and the ride of the four horsemen across Europe. The really big question for the moment, however is: What happens this Wednesday? As the ECB stops pumping money into Greece as every Greek makes their last grasp attempt to remain solvent?Moreover, through its incompetence and hubris, it is responsible for major external mistakes that have brought war and chaos to its southern and eastern edges, in Libya and Ukraine. Internally, the EU is becoming disunited and hence weaker; externally, it has turned into an exporter of instability.
Unless things radically change — and it is hard at this point to see how they can — it may lead a grandiose European project to a sad ending, in which the ghosts of the European past triumph over the best intentions.
The official statistics paint a grim portrait of social stability in Greece. According to a 2014 report by the OECD, the share of people in Greece who say they are unable to afford food doubled to 18 percent between 2007 and 2013. The country faces a staggering unemployment rate: 26 percent of Greeks overall and fully half of those under 25 are without jobs. And the latest statistics show that over six million people are either living in poverty or at risk of slipping beneath the poverty threshold.