A roundup

Snowed under

Its been a busy few weeks. Christmas and new year saw me in the States and since I got back I’ve been hard at work (round the job) on a project. Watch this space and all that…

Ive scribbled a couple of things though which have sort of fallen between the old blog and here. The Commentator, for which I’m Contributing Editor, has carried a couple of my articles this month. First was The economic reality of 2012, a look at the prospects for the global economy in the coming year. Its grim reading but then I think it will be a grim year.

Next up came an article on the coalition government’s attempts to cap the amount of benefits a family can receive to the level of the average national wage. This is such a no brainer in terms of fairness that you wonder how anyone has the gall to oppose it but there you are. I should add that The Commentator have changed the title of every item I have ever sent them. Not this time though, so read up on Why Britain is f*****

I also occasionally contribute to Global Politics and with the US Presidential race revving up I pondered the tricky question of the foreign policy of my favoured candidate, Congressman Ron Paul. Reading is most recent book I found myself wincing at times but I can put that to one side this election because the big question is not whether the US should bomb Iran but whether it will be able to afford to. Anyway, you can read all about it in the unimaginatively named Ron Paul and Foreign Policy

I enjoy writing for Middlebrow Magazine under a non political pseudonym. I try and steer clear of the sorts of topics I cover elsewhere and cover other interests like film, drama, music etc. But my article Animal spirits, Asymmetries and Austrians is a run down of some of the most popular of the spate of recent books on the economic crisis.

That’s all for now. More old rubbish is on the way so, in the words of Shaw Taylor, keep ’em peeled.

 

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The causes and consequences of a falling dollar

Timber!

QE3 remains in dry dock for now but the dollar is still shipping water. Last week the dollar tumbled to its lowest level since July 2008 against a basket of five major currencies on speculation that Ben Bernanke, Chairman of the Federal Reserve, plans to hold interest rates to the historic lows of 0-0.25%, where they have been since 2008.

Bernanke’s dollar printing is based on the thinking that “price stability should be a key objective of monetary policy”. If the price level falls, deflation, debtors see the real value of their debts increase and have to devote a greater portion of their wealth to paying them off. Likewise, it is believed, consumers seeing falling prices may hold off on purchases in expectation of even lower prices in the future. Both forces will act to decrease spending and kick the economy into a downward spiral. Following Milton Friedman and Anna Schwartz’ prescription for the Depression, Bernanke sees the Fed as having to pump as much money as it takes into a failing economy to keep prices stable.

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S**t my economist says #1

Ah, Mr Osborne, vee haff been expectink you

Opponents of the coalition government’s plans to cap the growth in the national debt to a still pretty massive 15% this parliament often cite the support of “some of the world’s most distinguished Nobel Prize winning economists”. When you hear that phrase you know that the names Paul Krugman and Joseph Stiglitz are scaling the walls of the conversation.

However, neither of these won their Nobels for their work in fiscal policy or economic stabilisation. Krugman won his for his (excellent) work on international trade and Stiglitz got his for his work on information asymmetries. All interesting stuff and both men should be listened to, but popping out the Nobels like they’re some sort of killer Top Trump just doesn’t wash.

Put it this way; the fact that Paul McCartney wrote Hey Jude doesn’t make Mull of Kintyre a good record.