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Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Investing.com Weekly Economic Calendar (Investing.com) If you want a global economic calendar for the week, start here. Here is the Monday list:
Articles about events, conflicts and disease around the world
Here is ashort list of many of the statements by Pres. Obama that are worthy of criticism:
Come on GOP, you've got plenty of factual material without making stuff up.
DEBTORS’ PRISON: GLOBAL DEBT HAS GROWN $57 TRILLION SINCE 2007 WITH 100 PERCENT OF SOVEREIGN DEBT MONETIZED (Anthony B. Sanders, Confounded Interest) Since the subprime mortgage crisis and Lehman failure, global debt has grown by $57 trillion since 2007, raising the ratio of debt to GDP by 6.3%. Sanders has two graphics which are difficult to rationalize one against the other. If the first one is correct (we believe it is) then where do the numbers come from for the second? And why tdo the numbers specified in the graph have no relationship to the vertical axis? If we can find the McKinsey & Company source we will revisit the second graph and discuss the meaning and context.
There is a third graph which is very important. It shows that the net issuance of sovereign debt net of central bank monetization is now negative. This is the equivalent of the issuance of debt-free money, although central banks have the ability of reversing the debt-free money at some point in the future by moving sovereign debt off their balance sheets and back to the private sector. When would they do this? It could be a tool of monetary tightening. Of course, the market price for the debt would be much less than when originally issued if inflation was higher (which it probably would be if tightening was on the table). So the central bank would lose money on the transaction and that loss would eventually accrue to the private sector when bonds matured at par. The integrated effect over time would be an increase in the money supply as the gains were realized in the private sector (which would have been losses on the central bank's books). Those gains would be an debt-free increase in the money supply.
How could a central bank afford to do this? It is no matter to them. They can create and consume the money at will as long as it is accommodated by economic activity. If they create and do not destroy money as needed by the economy dislocations can occur. Right now the central banks are creating money without requiring the private sector to increase its holding of sovereign debt, a very accommodative policy.
World Markets Update: The Rally Continues at a Moderate Pace (Doug Short, Advisor Perspectives dshort.com) Doug Short is a regular contributor to GEI. For the second consecutive week, all eight indexes on Doug's world market watch list posted weekly gains, although at a slightly more moderate pace. The weakest market year-to-date is Shanghai; the strongest are Paris and Frankfurt.
America is Shaking Off Its Addiction to Oil (Bloomberg Business) A combination of more efficient use of energy plus increased use of natural gas and renewables is driving down the U.S. dependency on oil. It took three times as much oil in the 1970s to produce on unit of GDP than it does today.
Low Yields Entice Corporate Debt Issuers (Moody's Analytics) About 18 months ago the U.S. high yield to investment grade spread was an unusually low 200 basis points. It has now opened to more than 500 bps indicating the market is much more concerned about credit risk than it was. From Moody's:
Other Economics and Business Items of Note and Miscellanea
The Economic Way of Thinking About Health Care (Reason.com) "Health insurance does not grow wild and abundant in nature or fall from the sky like manna." Econintersect: Based on the premise there is a limit to what we can afford other than what would cause inflation.
Economics moronism: Good grief (Trib Live) Selective examples.
Questions surround economists who assess Missouri legislation (Kansas City Star) You don't mean that professors can be bought, too?
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