Home » Money (Page 86)

Category Archives: Money

Economics and commerce, all built from scratch.

Blood & Money, On Ice

Posted on by | 7 Comments

No matter how bad it looks, those in charge find a way to make it even worse.  Like a pack of ravenous dogs, they are snarling over the last scraps of meat rather than get together to work things out.  It’s as if they don’t care that it’s all coming down to a dark, bitter end – each wants their own piece and damn the rest.

I’m not writing about the US Congress or anything so big.  This is the state of the National Hockey League (NHL).  The owners and players are in the process of taking a $1.87B per year league down to zero – for the second time in eight years.  Why they can’t just let them strap on skates and beat each other bloody to get it out of their systems before the real negotiations begin, I don’t know.

Continue reading →

Globalizing the Depression

Posted on by | 14 Comments

One of the great features of this global economic slowdown, which I call a Depression, is that it has not been genuinely global.  The developed world – US, Europe, UK, and Japan –  have been mired in slow growth and dogged unemployment for at least four years.  While Europe enjoyed a small boom when the Euro took hold in the 2000s, much of it was fueled by government debt.  The US has not performed well since 9/11 despite an ocean of red ink from Washington.  But the BRIC nations – Brasil, Russia, India, and China – have enjoyed reasonable growth and a net improvement in resilience and stability.

Until now, that is.  The slowdown is finally hitting everyone.  What this might mean is very hard to tell.

Continue reading →

QE3

Posted on by | 15 Comments

What’s a few more billion dollars a month in today’s money?  On Thursday, the Federal Reserve announced that they were going to purchase $40B more mortgage backed securities every month, a total of $85B, with money they more or less print themselves.  It’s the third round of Quantitative Easing, or QE3, but this time they left the dollar amount open ended.  We can guess that by the time they stop the total amount printed will be around $2T.  That’s more like the insane numbers we’ve gotten used to the last four years.

They are doing this because unemployment remains stubbornly high in a weak economy.  Why they picked mortgages and what affect it will really have is another long story, but the bottom line is that election year or not the Fed is on the case and doing whatever it can.  But is it too much?  And what comes after all this money is printed?  There are a lot of questions.  Let’s work our way through them.

Continue reading →

Surviving, Thriving, Realizing

Posted on by | 20 Comments

To every thing there is a season, and a time to every purpose under the heaven.
Ecclesiastes 3:1 (KJV)

Anyone who has been close to the edge knows what “survival mode” is like.  Small flashes of adrenaline propel you from one day to the next.  Each fitful dawn is a mix of dread and possibility, all of them taken one at a time.  Next week?  Worry about it when it comes.  Next month?  Forever away.

Many people find themselves in “survival mode” through this Depression, especially those without either work or unemployment bennies.  For them it is a slowly unfolding tragedy, but in great numbers they become a society, a culture, and an economy that is unable to function.  That’s because a free market only reaches equilibrium in the long run, actually running on small differences in the short term.  But in the very longest term the magic of market forces become something else altogether.

Everything has its own time.  When we start to understand that “The only thing we have to fear is fear itself” it helps to appreciate the short, long, and very long term that are all whipping us through each day and all of our days.

Continue reading →

Acronyms vs. Reality

Posted on by | 15 Comments

The European Central Bank (ECB) has come to the rescue!  On Friday, they announced a separate permanent fund to buy €500 billion worth of national bonds from EU member nations.  Markets were up worldwide in response to news that the Euro would be preserved and stabilized.  It’s nothing but good news all around!  Right?

Not so fast.  Like all good news these days, it has its roots in bad news.  Two days earlier, the German government was unable to sell enough bonds at auction, as demand fell for anything tied to the Euro.  Bailing out Greece or Spain was never really on the table, but bailing out Germany is a priority for the Frankfurt based ECB.  And this starts the twisted and difficult tale of the bailout that may or may not culminate in the closing chapter of the Eurosaga that has plagued markets for over four years.

Continue reading →