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Yearly Archives: 2013

Jubilee – Cancel Debt!

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There has been a lot of good economic news lately, at least compared to the very bad news of a few years ago.  But that doesn’t mean that there aren’t bad things worth keeping a close eye on – especially those that predict future action by the Federal Reserve.

The velocity of the US Dollar – the number of times per year that money turns over through the economy – continues to drop without an end in sight.  This is a worrying sign because it suggests that most of the economic growth we are seeing comes from money that is being more or less printed by the Fed.  It also suggests that there will be another round of quantitative easing, or even more money printed.  There has to be a better way – and this wouldn’t be Barataria if we didn’t take a stab at how.

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Inequality Becomes Intolerable

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How bad has wealth inequality become in the US?  Thanks to a video that is becoming viral, a new discussion about inequality has fired up – sadly, just after our election cycle.  It takes off from work done 6 months ago by Dan Ariely and Mike Norton, first reported humbly in a simple blog.  But thanks to new graphics and explanation it’s lighting up the ‘net in a way not seen before.

As discussed previously, income and wealth inequality is the best indicator of a future slowdown in economic growth around the world.  More attention to this problem is certainly a good thing.  But the context of how this comes to be and what can be done about it remains elusive.  Let’s take a long view and see where the problem came from – and what can be done about it as we work to set up the next period of expansion that comes after the Managed Depression we are in now.

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DJIA: Yes and/or No

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The Dow Jones Industrial Average (DJIA) keeps setting new record highs.  Does this mean the Managed Depression is over?  The short answer is “yes”, but the long answer is “no”.

The case for a “yes” is that this is based on the solid progress that we have been waiting for, and it’s backed by some strong numbers.  The “no” is that we’re still judging ourselves against either the depths of the worst part of the depression, or in the case of the DJIA a 6-year old record – it should be about 30% higher or more in that time.  But what counts is that this is based on strong corporate profits at least as much as a lack of any other place to put money and the trends should continue – unless the Federal government does something stupid.  Where do you want to put your money on that one?

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Hugo Chávez

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The United States’ biggest bogeyman dictator remaining, Hugo Chávez, has died of cancer at age 58.  His status as our most feared repressive ruler says something about the state of the world today because by any reasonable accounts he was neither all that repressive nor that big of a challenge to the US.  Even the amount he was feared was greatly exaggerated as a badge of honor by this man of the people.  Yet his passing is extremely important in that it probably marks a new phase in the continuing progress of Latin America.

Why did we fear Chávez, if we did at all?  What will come next?  Most of it has been show so far, but in typical South American fashion it was a pretty good show.  This one may have some lasting and even positive effects.

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Austerity Goes Down

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How’s that austerity workin’ for ya?  Just as sequestration takes hold here in the US, Europe is looking to go the other way, releasing more Euros (and even Pounds) in order to get things going again.  The new US “policy” of budget balancing, backed into without thinking, is now being formally abandoned by everyone else.

There is probably some kind of requirement that any blog on economics has to write about Europe every so often, even if nothing new is happening.  But today there may well be something worth writing about as the Central Banks develop the whiff of panic that has been absent so far.   As Japan becomes more urgent and the US shoots itself, Europe has some tough choices to make.  What, or better yet can, they do?

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