LONDON (Reuters) - Put money supply growth on auto pilot. Make financial stability an explicit goal of central banking. Set up a European Monetary Fund. Create a new global currency anchor by pegging the yuan to a basket of commodities. A flurry of proposals from economists, coinciding with a semi- annual IMF gathering in Washington, reflects more than a passing loss of confidence in policymakers' ability to get to grips with the intractable financial crisis that began in 2007.
LONDON, October 11, 2011 /PRNewswire/ -- Business Monitor International (BMI) has released the latest special report, "China 2012: From Miracle To Meltdown" outlining a case for a severe growth collapse in China driven by declining money supply growth rate, accelerating inflation and external slowdown with a threat of a double dip recession in the US.
The first of a series of four articles on the author's personal perspectives on the state of the UK property market is presented. As several economic components evolve, so does the face of the UK property market. Interest rates are threatening to increase, but a growth in speculative development -- up from practically nothing five years ago to L5 billion in 2005 -- could offset any decline in productivity. And a lack of large office space could force some sizable companies to become pseudo-developers, a situation that seems reasonable considering growth in the UK's gross domestic product remains robust and consumer confidence is high. Yet some of the latest data suggests that real rates and money supply growth are stabilizing, which means asset price growth also might begin to stabilize.
Deficit spending effects To the editor -- When businesses, you or I go into debt, we must have a way pay it off.If we don't, bankruptcy is the result.Governments with central banks also pay off debt, but do it differently. They create money by buying back their debt.A strong private sector depends upon a growing money supply to accommodate growth.
Rescued from a state of near-irrelevance by the world recession and an infusion of hundreds of billions of dollars (mostly from the U.S., Europe, and Japan), the International Monetary Fund (IMF) is now thinking of expanding its role into previously uncharted territory. In Istanbul for the fall meetings of the IMF, Managing Director Dominique StraussKahn said: "Given the costs associated with reserves accumulation, there is clearly a need for reliable emergency financing and hence for a global lender of last resort. The fund has the potential to serve as an effective and reliable provider of such insurance. Strauss-Kahn is correct to point out that developing countries pay a substantial price for accumulating foreign exchange reserves in order to "self-insure" against a financial crisi...
... (raising interest rates or curtailing money supply growth). These are policies that we in the ...
Federal Reserve chairman Ben Bernanke gave the dollar a powerful boost last month with his observation that a weak dollar was contributing to imported inflation. The connection between a weak dollar, rising oil and other commodity prices and risks of higher imbedded inflation appears to have motivated Bernanke to underscore the Fed's commitment to price stability after slashing interest rates by 325 basis points since last fall, says Michael Woolfolk, senior currency strategist at The Bank of New York Mellon. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, says that rather than emphasize how a weak dollar boosts foreign demand for US goods, which helps blunt the impact of a pullback in US demand, Bernanke's comments about the dollar were really about the infl...
... year as expected, including weaker global growth prompting a decline in commodity prices, the Fed w...Meanwhile, inflation and money supply growth in the eurozone are accelerating, ra...
WASHINGTON -- We are entering an era of high inflation, to judge by the massive growth of the money supply in the United States, Europe and Asia, and the stubbornness of central bankers who insist that high unemployment demands the creation of even more money. The last time the world went through a similar period was the 1970s. The term that defined the era was "stagflation. In a nutshell, stagflation back then was the result of a recession partly caused by stratospheric oil prices followed by the decision to print tons of money in the hope of inflating the economy out of unemployment. In other words, stagnation was not so much because of oil prices; rather, it was the result of the monetary response to the stagnant environment that the high energy costs had helped create. Inflation si...
Most economists, including yours truly, have been saying that the huge budget deficits the country is running will result in inflation. So, where's the inflation? Inflation normally lags changes in the growth of the money supply by one to two years. The big monetary expansion took place in the last half of 2008. So if the economy follows past trends, one would expect to see growing inflation by the latter part of this year. There are several reasons why inflation does not occur simultaneously with a sudden growth in the money supply. (Remember, inflation is caused by the money supply growing faster than the supply of goods and services.) The Fed greatly expands the money supply when it sees the economy is entering a recession in order to temporarily reduce interest rates and increase th...
The paper investigates the causal link among inflation, money and budget deficits in Ethiopia for the period 1964 to 2003 using the bounds test approach to cointegration due to Pesaran et al. (2001) and using a modified version of the Granger causality test due to Toda and Yamamoto (1995). To check the robustness of the bounds test, we also used two additional long run tests: the dynamic ordinary least squares (DOLS) due to Stock and Watson (1993) and the fully modified ordinary least squares (FMOLS) due to Phillips and Hansen (1990). The empirical evidence shows that there was a long run cointegrating relationship among the series with a unidirectional Granger causality running from money supply to inflation and from budget deficits to inflation. In contrast, fiscal policy does not see...
... policy as a tool for a sustained economic growth and as a means of avoiding sources of macroeconomi...
The history of unchecked discretionary power has been a sordid story of abuse, corruption and tyranny. "Power corrupts," noted Lord Acton, "and absolute power corrupts absolutely." The proposal for a fixed or pegged exchange rate attempts to stymie the power of the state to create money, excessive money that fuels inflation, devaluation and high interest rates. In fact, an independent central bank with the mandate to protect the currency would have a similar effect but socialist-minded commentators are strongly against the control of state power. In his column, Sunday Gleaner, May 2nd, Ian Boyne declared: "I reject the proposal for an independent central bank because that removes the discretionary power of the state to act in the interest of the country, particularly the poor and vulner...
...Check the growth in money supply during the period 1991-93, for the...
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