It’s A Wonderful Theory

Scott Sumner:

It makes no difference who gets the extra money from the Fed, because the recipient is no wealthier than before (money is swapped for bonds) and hence they have no incentive to spend any more.  Rather the impact occurs in the AGGREGATE.  Total holdings of the base now exceed total base demand . . . → Read More: It’s A Wonderful Theory

The Case of the Missing 200 Million Barrels of Oil: Marshall Adkins

Supply threats in the Middle East have governments around the world hoarding oil, largely in secret. But it didn’t get past Raymond James Director for Energy Research Marshall Adkins, who noticed the 200 million-barrel discrepancy between what was pumped and reported global oil reserves. Where did the missing oil go, and why don’t . . . → Read More: The Case of the Missing 200 Million Barrels of Oil: Marshall Adkins

Don’t Trust Mainstream Economics

Here’s why:

It was almost exactly 20 years that statistics prepared by Paul Krugman about the extent of rising income inequality began to show up in the New York Times on page 1. Back then we–or at least I–thought that this would quickly reverse itself: I remember one dinner at which Claudia Goldin challenged . . . → Read More: Don’t Trust Mainstream Economics

The Denial on Housing in Spain

I am sure many of my readers will have caught this Bloomberg piece earlier this week, but if you haven’t it is a brilliant piece of journalism by Bloomberg reporters Sharon Smyth, Neil Callanan and Dara Doyle. The story takes us to Spain and Ireland and the former’s denial with regards its housing market.

. . . → Read More: The Denial on Housing in Spain

Consumer Demand is Not the Whole Picture

See if you can spot what’s missing:

Businesses aren’t investing in the United States because of a lack of consumer demand, International Paper CEO John Faraci said Friday.

“I think this was all about consumer spending and demand. You know, the problem we have is there’s inadequate demand to create jobs. We know how . . . → Read More: Consumer Demand is Not the Whole Picture

Student of the physical market - demand doesn't drive the gold price

Eric Sprott and David Baker has a new article out discussing central bank buying of gold and particularly China. I agree with his conclusion that this is an important demand side shift in the market but then Sprott plays it up way too much with statements like:

“… there isn’t a physical market on . . . → Read More: Student of the physical market – demand doesn’t drive the gold price

CBO Nonsense

From the CBO Director’s blog:

Many factors are responsible for the rise in unemployment in general and in long-term unemployment:

-Weak demand for goods and services, as a result of the recession and its aftermath, which results in weak demand for workers;

The better question is: what is causing weak demand? Could it be . . . → Read More: CBO Nonsense

I’m Right (Again)

In which my theory that free labor simply masks the underlying problem is proven correct:

But, in the first study of its kind, the MAC – set up by the last Labour government, and independent of Whitehall – said large-scale immigration was having a significant impact on the job prospects of the ‘native’ population.

. . . → Read More: I’m Right (Again)

The Rationalizing Creature

It turns out that humans aren’t so rational after all:

For centuries thinkers have assumed that the uniquely human capacity for reasoning has existed to let people reach beyond mere perception and reflex in the search for truth. Rationality allowed a solitary thinker to blaze a path to philosophical, moral and scientific enlightenment.

Now . . . → Read More: The Rationalizing Creature

Spot The Fallacy (Labor Edition)

From ASI:

Economist Diane Coyle has noted that migrant workers in the UK tend to be either very highly skilled or low skilled, which suggests that they are filling gaps in specific areas of the labour market, not taking jobs from the native or resident population. And Bryan Caplan explains that by doing low-skilled . . . → Read More: Spot The Fallacy (Labor Edition)