Sunday, April 30, 2023

What China is really playing at in Ukraine — Pepe Escobar

A geopolitical economic explanation of China's moves with respect to Ukraine and Russia.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
What China is really playing at in Ukraine
Pepe Escobar

Also at SCF

A Russian view of what's coming.

The Last Offensive of the Kiev Regime
Davor Slobodanovich Vuyachich

RT — Question More (Russian state-sponsored media)
Zelensky’s top adviser issues threat to China

Saturday, April 29, 2023

Leftists are not “anti-market” — Peter Radford

So [in conclusion], let me summarize: leftists are not anti-market.  They recognize that what is called a market by economists is a rigorously simplified idealization.  And that like all idealizations a lot is left out in order to render the idealization coherent.  It’s what’s left out, not what’s left in, that leftists object to.  And that is not trivial. Coase says so too.

Methodological individualism versus institutionalism. MMT is institutional and rejects the assumption of methodological individualism that is foundational in much conventional economics. 

The Radford Free Press
Leftists are not “anti-market”
Peter Radford

Friday, April 28, 2023

Michael Hudson — Democratic Liberty Versus Oligarchic Liberty—Part 2: Debt and the Collapse of Antiquity

In part two, Michael Hudson discusses his new book “The Collapse of Antiquity.” Hudson challenges the traditional beliefs about the fall of the Roman Empire, arguing that it was caused by a financial crisis brought on by excessive debt, wealth inequality, and the concentration of economic power. Hudson draws parallels to modern-day economies and highlights the dangers of financialization and wealth concentration....
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Democratic Liberty Versus Oligarchic Liberty — Part 2: Debt and the Collapse of Antiquity
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

US officials scramble to slow China’s advances — David P. Goldman

If you caan't beat 'em, sanction 'em..

See also

Moon of Alabama
U.S. Argues For More Protectionism And Subsidies


Naked Capitalism
The Rise of China (and the Fall of the U.S.?)
Alfred McCoy, Fred Harvey Harrington Professor of History at the University of Wisconsin–Madison and author of To Govern the Globe: World Orders and Catastrophic Change.
Originally published at TomDispatch

Reserve Currency Blues — Brian Romanchuk

The “Demise of the Dollar” is a long-running story in hard money circles, and has gotten a recent push by the growth of transactions in the Chinese yuan in international transactions. Although it seems likely that the yuan will grow in importance, this is largely a nothingburger from the perspective of the United States.
Emerging market investor Paul McNamara was recently interviewed by Tracy Alloway and Joe Weisenthal on this topic. His views are better thought out than mine, but I just want to chime in from the perspective of a developed market govvies analyst.…
There are two distinct issues (at least) involved in de-dollarization. 

The first is an actual replacement of the US as the global reserve currency, which most people in the know say is not imminent. On the other hand, once a trend passes a critical point and goes viral, there can be a run on the currency. That too is not imminent, as some think it is.

The second issue is the availability of workarounds in international trade that bypass the USD and therefore weaken the effort of the US to weaponize its currency in economic warfare. Economic warfare and cyber warfare (and biowarfare) are preferable to the use of destructive weapons in that they enable what is in effect conquest while leaving infrastructure intact. As a result, one sees US politicians and officials reacting publicly as targetted countries evade sanctions, freezes, seizures, and exclusion from the customary settlement system.

Bond Economics
Reserve Currency Blues
Brian Romanchuk

De-dollarization kicks into high gear — Pepe Escobar

De-dollarization is a process that Pepe Escobar sees as not only underway but also the inevitable outcome of Western overreach in the form of imposition of neoliberalism, neo-imperialism, and neocoloniztion through hybrid warfare including economic. Weaponizing the dollar pushed the Global South and East over the edge. 

In terms of the world system, de-dollarization can be viewed as an extension of decolonization, which is the real meaning of multipolarism, and which is being led by China and Russia against the US and its "allies" that are actually more vassals than allies.

Ever exuberant, Pepe may be getting ahead of the curve in his enthusiasm. The Empire is not dead yet and it will resist, since this is an existential threat to its existence. Ukraine is likely just a warm-up.

See also
Russia and China will complement each other in those technologies where one of the parties seeks advancement – Vladimir Putin

“We recently met with a colleague from China, we spoke very frankly in many areas and agreed that we should complement each other there – especially in high-tech industries – where one of us achieves some kind of movement forward,” Putin said, noting that we are talking about the exchange of information and assistance in the development of the market.

According to Vladimir Putin, it is necessary at the government level to develop tools to support exports, and there are government structures that are doing this.

“I am sure that colleagues in friendly countries will support this. Unmanned aerial vehicles do not suffer from African swine fever, so I am sure that it will be even easier than promoting pork to the Chinese market,” the Russian President noted with a smile.
TASS (Russian state media)
Russia, China agreed to supplement each other in high-tech industries — Putin

Thursday, April 27, 2023

William Mitchell — A nation does not shift to an MMT regime

Earlier this week (April 25, 2023), I saw a Twitter exchange that demonstrated to me two things: (a) some mainstream media commentators are now understanding some of the principles of Modern Monetary Theory (MMT) and relating that knowledge to practical matters that concern them (lens being applied to values); and (b) high profile financial market players still command a platform in the media but have little understanding of what MMT is and consistently issue false statements. A lot of misinformation continues to be circulated about our work. Cursory inferences, usually based on an extrapolation of what the flawed mainstream theories say about policy interventions, are then conflated with assertions about MMT. In other words, MMT is interpreted through the terminology and conceptual structure of a rival paradigm. We reject such inferences and comparisons....
William Mitchell — Modern Monetary Theory
A nation does not shift to an MMT regime
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, April 26, 2023

Zero Hedge — China Is Quickly Becoming One Of The Largest Automobile Exporters In The World

 When I was a world traveler in my twenties back in the 60s, I was struck by the prevalence of Japanese cars and pickup trucks with US cars owned almost exclusively by the elite and no US pickups visible. The rest is history. China may be in a similar position now.

Zero Hedge
China Is Quickly Becoming One Of The Largest Automobile Exporters In The World
Tyler Durden

Kremlin explains seizure of foreign assets — RT

Tit for tat. Not quite, yet.
The [Kremlin] spokesman [Dmitry Peskov] added that the move “mirrors the attitude of Western states towards foreign assets belonging to Russian companies.”

“The main goal of the step is to create a compensation fund for potential use in tit-for-tat measures in response to the expropriation of Russian assets abroad,” Peskov said. He added that a number of states systematically carry out a rapid transition from temporary administration to actual confiscation..

The decree does not deal with property issues and does not deprive the owners of their assets, Peskov stressed, noting that the list of assets subjected to the measure could be expanded.
Like weaponizing a currency, confiscation of economic assets has adverse effects on the world system. One affects financial capital and the other affects economic capital. This is antithetical to capitalism as a system of political economy.

RT — Question More (Russian state-sponsored media)
Kremlin explains seizure of foreign assets
The move will “ensure the uninterrupted operation of companies significant for the national economy and eliminate the risks of the political position of a number of unfriendly countries influencing” the security of Russia.

The original owners are considered to have temporarily lost control of the property, but not forfeited it outright. The measure “helps preserve the investment climate in Russia and reduce the outflow of capital from the country,” the agency added.
German industrial giant to take hit on Russia exit READ MORE: German industrial giant to take hit on Russia exit

The decree also establishes a legal framework that enables the Kremlin to take over more foreign assets should other countries seize Russian private or government property in their jurisdictions, or threaten the national, energy, or economic security of Russia.

Germany and Poland have so far seized an estimated $22 billion in assets belonging just to two Russian companies, Gazprom and Rosneft, according to media estimates.

See also

Strategic Culture Foundation (sanctioned by the US Treasury Department)
How German Chancellor Angela Merkel Subjected Germany to the U.S.
Werner Rügemer, German public intellectual

Balancing Individualism with Egalitarianism — Michael Hudson

Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Balancing Individualism with Egalitarianism
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

In The Seeds War Who Is Burying Whom? — John Helmer

About Russian agriculture, specifically seed production. Longish and detained but the basic idea is important. Russian seed production was literally wiped out by the liberal government under Yeltsin, making Russian agriculture fully dependent on the West. Russia is now trying to develop self-sufficiency in seed production after having become otherwise self-sufficient in food production.  Seed production is a weak link right at the beginning of the chain. Russian agriculture is already a significant economic factor in the world system and global economy, and entry into seed production and export will amplify this effect. It's not necessary to read the post closely to understand the issues and history. It is not only important for understand the Russian economy and its resistance and remaining weaknesses, but also in understanding the affect of agriculture on the world system, sustenance being a viral resource along with energy.

Dances with Bears

See also

Hint: It is not Europe. Europe is facing catastrophe by following the US. How long can this go on before voters force governments to consider the national interest of the European countries that are now not being served by the sitting governments. Eiher policy will change under sitting governments, or leadership of the affected countries will change as economic conditions bite the electorates. Oh wait, this was supposed to happen to Russia, right?

India Punchline
Who gains from a forever war in Ukraine?
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

Argentina currency collapse


Argentina peso in collapse wrt USD:

Interest rates at 81% … better keep increasing rates and stick with it …. maybe it will work this time… come up with some new witty figures of speech maybe…

All Art degree morons in control… ie hopeless situation… 

Japan moon fail


Lots of long faces… ie back to the drawing board…

If they had Art Degrees instead they would simply do the same thing without making any adjustments and see if it worked the next time or the time after that.. or the time after that… dogmatically advocating for this original configuration…. would be a lot easier …

Tuesday, April 25, 2023

China’s exports shifting from West to Global South — David P. Goldman

That [refers to data in the article] represents a geopolitical point of no return of sorts, the moment when China’s economic dependence on the United States in particular and developed markets in general slipped behind its economic standing in the developing world.

Global economic growth is now coming from the Global South/East as these countries develop. China is in a position to capitalize (pun intended) on this trend, which appears to be long term owing to lower costs than prevail in the developed countries. China is the largest market globally and also the "world's factory," covering both supply and demand. (See Dean Baker, China is Bigger, Get Over It.)

 Asia Times
China’s exports shifting from West to Global South
David P. Goldman

See also
China is now the leader in refining capacity, overtaking the United States last year, with 18.4 million bpd in total. This will grow further this year, cementing it at the number-one spot.

The Russian proposal to make use of its vast export earnings out of oil sales to India by investing the funds in manufacturing industry in India for export to Russia; the deal on adopting the Russian financial messaging system for cross-border payments; the acceptance of Indian Ru-Pay cards and UPI in Russia and Russia’s MIR cards and Fast Payments System in India; the operationalisation of the Maritime Corridor connecting Vladivostok and Chennai — these testify to the keenness of both countries to put in place the necessary underpinnings for a massive expansion of the Russian-Indian trade and economic ties in the very near future.…

Bilateral trade has crossed $45 billion — something unthinkable until Russia turned its back on the West and began pressing the pedal on alternative partnerships in Asia to replace the European partners....

Russia is also a chief arms supplier to India with no strings attached. Russia and India also have entered into joint ventures in weapons development and are discussing others.

India Punchline
Pivotal moment in India-Russia relations
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

The Canadian "Fiscal Crisis Of 1994-5" — Brian Romanchuk

I have now arrived at the part of the preparation for my panel that I have dreaded: the Great Canadian Fiscal Crisis of 1994-1995. This is an event that Canadian Establishment figures will talk your ear off about if you bring up Modern Monetary Theory (MMT). My problem with this crisis is that I spent my working life staring at charts of yields, economic data, and exchange rates, and never even noticed anything unusual during that period in Canada. It was only much later that I heard about this alleged crisis. (I was out of the country until August 1994, and too busy teaching my first course as a postdoc in engineering to notice what was happening in the markets or the news.)
Bond Economics
The Canadian "Fiscal Crisis Of 1994-5"
Brian Romanchuk

Monday, April 24, 2023

Will America win from de-dollarisation? — Thomas Fazi,

Summary. You know all this if you have been following this, but it's a useful summary for those not following it closely.

Will America win from de-dollarisation?
Thomas Fazi, co-author with Bill Mitchell of Reclaiming the State

Western tech firms just can’t resist China’s chip market — Scott Foster

Economic warfare has its consequences, including blowback. Did anyone think this through?

Asia Times
Western tech firms just can’t resist China’s chip market
Scott Foster


TASS (Russian state media) 
IMF finally turned into tool to achieve US military goals — Lavrov [headline too narrow, there's much more]

William Mitchell — The inflation backtracking from the central bankers and others is gathering pace

Remember all the hype from central bankers last year and earlier this year about how they had to get ‘ahead of the curve’ with their interest rate hikes just in case wage demands escalated and inflationary expectatinos became ‘unanchored’. Over the last 18 months, I consistently noted in various blog posts that this was all a ruse to create a smokescreen to justify the unjustifiable rate rises – given that the inflationary pressures were almost all coming from the supply side and those forces were temporary and abating. Well now, the mainstream, having pushed for the rate rises and got their way are now backtracking to maintain their credibility by claiming there are no wage-price dynamics in sight. It is a dystopia....
William Mitchell — Modern Monetary Theory
The inflation backtracking from the central bankers and others is gathering pace
Bill Mitchell | P|rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, April 23, 2023

Links — 23 April 2023

Pragmatic Economics — Forbes
Debt-Ceiling Madness
John T. Harvey, Contributor
The Empire Of Hypocrisy: Notes From The Edge Of The Narrative Matrix
Caitlin Johnstone

RT — Question More (Russian state-sponsored media)
Kirill Strelnikov: Western ‘experts’ thought they would destroy Russia’s economy. They failed. [As Andrei Martyanov said from the get-go. It's national capacity, stupid, not NGDP.]
Kirill Strelnikov, RIA Novosti

Marginal Revolution
War by Other Means [review of  Aaron Sorkin movie on the US anti-war movement]
Alex Tabarrok | Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, and a research fellow with the Mercatus Center

Sixth Tone (China)
Ye Zhanhang

Strategic Culture Foundation (sanctioned by the US Treasury Department)
The Empire's Revenge: Set fire to Southern Eurasia
Pepe Escobar

India Punchline
Sudan: Alignment of forces, players
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador



Once we get to the one year anniversary of the upward inflection point last year due to Brandon’s Russia sanctions then their “inflation!” is going to go away… looks like May or June …. 295 to 301 is 2%… then what are they going to do?

Saturday, April 22, 2023

MAGA: $2.5 Trillion Of Interest Payments YEARLY On Americans’ Horizon According To CBO’s Spending Projections


Over 2X a Social Security…. 3X a DoD…

LFG!!!!  🤑🤑🤑🤑🤑 


Friday, April 21, 2023

Central Bank Independence As A Secret Ingredient? — Brian Romanchuk

Following up on my comments on the paper: “Deficits Do Matter: A Review of Modern Monetary Theory” by Farah Omran and Mark Zelmer, I am going to do a high level discussion about their claims about the value of an independent central bank. (For new readers, I am discussing this paper as I will be on a panel about Modern Monetary Theory (MMT), and Mark Zelmer is one of the participants. I am using my articles here as a way of thinking about my prepared remarks.)

The headline of this article is somewhat dramatic, but that is the only snappy way I can think of summarising my interpretation of the article. If one believes those authors, creating an independent central bank is a major innovation in economic policy that generates positive outcomes by itself. The MMT prescription of downgrading monetary policy (and a general hostility towards the concept of central bank independence) would in this case be a damaging policy shift.
Bond Economics
Central Bank Independence As A Secret Ingredient?
Brian Romanchuk

Thursday, April 20, 2023

Links — 20 April 2023

Sixth Tone (China)
AI Is Starting to Replace Humans in China’s Creative Sector
Ye Zhanhang

Sixth Tone (China)
Can Work Survive the ChatGPT Era?
Yu Mingfeng, associate professor of philosophy at Tongji University in Shanghai (Australia)
Caitlin Johnstone 

Southfront (sanctioned by the US Treasury Department)

Katehon (Russia)
Limits To Supply Chain Resilience: A Monopoly Capital Critique [longish]
Benjamin Selwyn. professor of international relations and international development at the University of Sussex, Brighton, UK.

Sputnik International (Russian state-sponsored media)
NATO Says Aiding Ukraine Cost $165B ln in Military Funding Since Early 2022

Armstrong Economics
The Richest Man in the World [Bernard Arnault, CEO and chairman of LVMH Moet Hennessy Louis Vuitton-estimated to be worth $235.7 billion]
Martin Armstrong

The FRED® Blog

‘We may be looking at the end of capitalism’: One of the world’s oldest and largest investment banks warns ‘Greedflation’ has gone too far [So monopoly is a major source of inflation.]
Will Daniel
h/t Naked Capitalism

India Punchline
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

William Mitchell — RBA Review Report ignores the real questions and proposes to entrench the failed Groupthink

Over the last few decades, I have done a lot of reading and research on the way organisations and groups deteriorate into what socio-psychologists call Groupthink, which is a system of patterned behaviour that takes the group increasingly further away from reality and sees it denying basic facts while at the same time maintaining authority for its activities and work. Academic disciplines, in particular are susceptible to this sort of dynamic, because of the hierarchical structure of the workplace and the fact that the senior professors have a vested interest in suppressing any research findings that contest the work that got them to those senior posts when they were younger. The economics profession is riddled with this organisational disease. Second, I have also researched and written about the concept of depoliticisation – which involves the hollowing out of national sovereignty and curtailment of popular-democratic mechanisms. Both these phenomena are at the centre of my rejection of many of the key recommendations of the external review of the Reserve Bank of Australia – Final Report: An RBA for the Future – which was published today (April 20, 2023). While the Report purports to providing the central bank with a pathway to the future, what is really being proposed – in the form of a new monetary policy board stacked with ‘experts’ (economists) – is less political accountability (depoliticisation) and a decision-making structure that is hindered by Groupthink.

William Mitchell — Modern Monetary Theory
RBA Review Report ignores the real questions and proposes to entrench the failed Groupthink
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, April 19, 2023

Lars P. Syll’s — Why DSGE models are worse than useless

To flog a dead horse. Unfortunately, the horse is still alive and well in academia and central banks.

The unsellability of DSGE models — private-sector firms do not pay lots of money to use DSGE models — is one strong argument against DSGE.

But it is not the most damning critique of it.
Lars P. Syll’s Blog
Why DSGE models are worse than useless
Lars P. Syll | Professor, Malmo University

William Mitchell — The so-called Inclusion Committee that recommends keeping the unemployed impoverished

It’s Wednesday and apart from music I am talking mostly about poverty – opposites indeed. The beauty of the beat against the ugliness of enforced poverty. Enforced by government policy, which if there is political will can always eliminate systemic poverty. Yesterday (April 18, 2023), a major report was released in Australia by the grand-titled Economic Inclusion Advisory Committee – 2023–24 Report to the Australian Government. It provided a series of recommendations to the new Labor government about how it should deal with poverty, disadvantage and the appalling state of income support in this country. Among its recommendations it found that “current rates of these payments are seriously inadequate, whether measured relative to the National Minimum Wage, in comparison with pensions, or against a range of income poverty measures. People on these payments face the highest levels of financial stress in Australia”. Accordingly, they recommended a “substantial increase in the base rates” for unemployment benefits and other payments. The new Labour government has already indicated it will not increase the rates in any significant way. The problem, though, is that the recommendation of the ‘Inclusion Committee’, is such that if introduced would still leave the unemployed being forced to live below the poverty line. Yet, its recommendation is now framing the ‘limit’ parameters of the debate. All sorts of so-called progressives are using the recommendation as the aspiration, which really becomes self-defeating. The ‘Inclusion Committee’ might better have been called the ‘Exclusion Committee’.
William Mitchell — Modern Monetary Theory
The so-called Inclusion Committee that recommends keeping the unemployed impoverished
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Silly "MMT" Drama — Brian Romanchuk

 This passage demonstrates that Murphy understands the accounting side of “MMT operations analysis” — not a big ask for a part time professor of accounting — but does not grasp economic theory nor its context. If literally everyone who has studied economic theory and is sympathetic to MMT states that the Job Guarantee is a core part of MMT and you do not understand them, the correct response is to reduce your ignorance, and not write a primer on MMT.

Brian saved me the trouble writing this. Actually, I was thinking of doing so yesterday but didn't have the time. Many seem to equate MMT with the institutional analysis, which is descriptive, and either forget about the macro theory, which is a causal explanation with factual implications, or else they misunderstand it, usually by reading it from a framing that MMT specifically rejects.

Bond Economics
Silly "MMT" Drama
Brian Romanchuk

Tuesday, April 18, 2023



STEM Musk getting PTSD from all the stress of large scale (read expensive) testing of his hypotheses….

You think art degree monetarist moron Larry Summers (or any other Art degree moron for that matter) is getting PTSD from spewing the dianoia of their untestable theses?


Monday, April 17, 2023

Links — 17 April 2023 — Geopolitical State of Play

Strategic Culture Foundation
The Slow Art of Whole-of-Government ‘Warfare’
Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

The Duran
As Evgeniy Prigozhin sees it – FULL TRANSCRIPT [good analysis of the Russian position from a Kremlin insider; edited machine translation.]
Seraphim Hanisch

Simplicus, the Thinker
John Bolton Declares Total War on Russia [read with the above; contains a link to Bolton's WSJ op-end with no paywall.]

Meaning In History
Mark Wauck

Reminiscence of the Future
When The Meeting Is "Upgraded". [Russia and China see it coming and are getting ready for it jointly–game on.]
Andrei Martyanov, former USSR naval officer

Southfront (sanctioned by the US Treasury Department)
There Is No Peace in Sight. “Am Afraid that More Difficult Times are Coming”. A Russian Viewpoint
Yevgeni Primakov, "the younger," grandson of the former Soviet official, now head of the head of Rosotrudnichestvo, the Russian Federal Agency for CIS Affairs, compatriots abroad and international humanitarian cooperation interviewed by Dragan VujicicVečernje Novosti, Belgrade

Josep Borrell's scheduled speech at CCG on China and EU-China relations [transcript of Borrell's speech; same old, same old]
Zichen Wang

Geopolitical Economics
BRICS Bank de-dollarizing, promises 30% of loans in local currencies, new chief Dilma Rousseff says ["gradually moving away from the dollar"]
Ben Norton

Moon of Alabama
How China Is Breaking The Colonial Effects Of Western Lending ["The case of Ghana shows that the IMF, over which the U.S. has a veto, will only lend fresh money if bilateral lenders like China, but not the 'multilateral' IMF or World Bank, nor private 'western' lenders, take haircuts."]

Patrick Lawrence: The Disinformation Complex: An Anatomy

Consortium News
Patrick Lawrence: Macron’s Europe

IMF WEO Debt Reduction Chapter — Brian Romanchuk

The International Monetary Fund (IMF) has recently published its World Economic Outlook (WEO) which has a combination of a report and an annual database of macroeconomic data (including forecasts). The beauty of this database is that the IMF has boffins that work to harmonise the data across countries. I normally do not pay too much attention to the text of the report, but it has a chapter entitled “Coming Down to Earth: How to Tackle Soaring Public Debt” which attracted some attention. (There was also a chapter on the natural rate of interest that would probably cause me to lose a portion of what remains of my hair.)

I am not going to get into the discussion of whether we are supposed to worry about the debt/GDP ratio, but I would note that the discussion is global — with quite a bit of it aimed at debt restructuring in poorer countries. That is outside my area of experience, so I am staying clear of that. Instead, I just want to make some quick comments about the floating currency sovereign parts. Even though I do not care about the debt/GDP ratio, some people do — and they often impose austerity policies to deal with them.…
Bond Economics
IMF WEO Debt Reduction Chapter
Brian Romanchuk

William Mitchell — IMF demonstrates mainstream economics has ossified but remains dominant

Last week (April 11, 2023), the IMF released their half-yearly update – World Economic Outlook: A Rocky Recovery, April 2023 – which excited the headlines in the media with predictions of gloom and calls for fiscal austerity and more interest rate hikes. The only good thing about these reports every six months is the accompanying datasets, which allows for fairly quick comparative analysis across nations. Other than that, the textual narratives are pure mainstream economics Groupthink and demonstrate how if one starts from a particular and flawed set of principles, everything else that follows undermines the stated goal. This is a recurring story – we have seen this with these multilateral agencies over and over again. The point to understand is not to try to interpret these IMF reports as being knowledge-based or compiled as if they are pursuing knowledge. They are parts of the ideological weaponry that seeks to sustain and advance neoliberalism and the power relations inherent in that ideology while purporting to be expert commentary.

The assumptions frame the debate. If the assumptions are stipulated as epistemological absolutes, or in the terminology of conventional economics, "settled," then deduction determines the outcome accordingly.

Perhaps the problem is not elite ignorance but class-based cognitive bias, or maybe even just propaganda. Since this phenomenon is widespread, it is likely the result of a combination of these.

Then there is Upton Sinclair's famous quote:  "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" — I, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109. It is not just the job description, however, although that is also fundamental. It is also class-status and access. Once a person is living in the bubble, leaving it seems like exile to the netherworld. So no one in the bubble is willing to rock the boat enough to get pitched out.

William Mitchell — Modern Monetary Theory
IMF demonstrates mainstream economics has ossified but remains dominant
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Related, from down under by Bill's fellow Australian

Saturday, April 15, 2023

Links — 15 March 2023

Cision PR
The Digital Currency Monetary Authority (DCMA) Launches an International Central Bank Digital Currency (CBDC)  ["at the International Monetary Fund (IMF) Spring Meetings 2023, the Digital Currency Monetary Authority (DCMA) announced their official launch of an international central bank digital currency (CBDC) that strengthens the monetary sovereignty of participating central banks and complies with the recent crypto assets policy recommendations proposed by the IMF"]
News release by Digital Currency Monetary Authority

Strategic Culture Foundation (sanctioned by the US Treasury Department)
All Roads Lead to Beijing [Western culture meets Chinese culture]
Pepe Escobar

Strategic Culture Foundation (sanctioned by the US Treasury Department)
We are Closening to a Move Through the Cycle – But First Will Come Disorder [the social and political dysfunctionality of Western "liberalism" taken to the extreme]
Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

Asia Times
China’s Asia export boom bedevils US friend-shoring  [China is not being isolated economically]
David P. Goldman

Global South
Daily Chronicles April 15 [intersection of geopolitics and geoeconomics]

Lars P. Syll’s Blog
Model vs reality  [Economic models are about economic relations among agents, which is only a small part of social relations. So naturally such models don't represent reality but only the aspects they model. This is the difference between the approach of conventional economics and that of economic sociology, economic anthropology, cognitive science, and much of heterodox economics.]
Lars P. Syll | Professor, Malmo University]
Tucker Carlson Pulls a Walter Cronkite on Ukraine [classic rant against "the man"]
Ray McGovern, co-founder of Veteran Intelligence Professionals for Sanity, and retired 27-year career CIA whose tasks included preparing and briefing The President’s Daily Brief and leading the Soviet Foreign Policy Branch

The Market Ticker [Karl sums it up]
Karl Denninger

Disorder is the Order of the Day [Kunstler adds his inimitable style to the conversation]
James Howard Kunstler

Beijing Review 
The West vs. the rest? [China has survived and progressed historically not by conquest by absorption.]
John Pang, former Malaysian government official and a senior fellow with the Perak Academy

RT — Question More (Russian state-sponsored media)
Multipolar world risks new Cold War – IMF chief [translation: neoliberal globalism is tanking]

RT — Question More (Russian state-sponsored media)
Andrey Korobov-Latintsev, an officer of the People's Militia of the Donetsk People's Republic

Middle East Eye
The IMF's punitive loan system makes struggling countries poorer. It must end. [The IMF is an enforcement arm of neoliberalism, neo-imperialism, and neocolonialism.]
Frederik Johannisson, Rasmus Alenius Boserup

Common Dreams
Oxfam Report Highlights Deep Harms of IMF 'Austerity Drive' in Poor Nations ["For every $1 the IMF encouraged a set of poor countries to spend on public goods, it has told them to cut four times more through austerity measures,"…]

Geopolitical Economy Report
Brazil’s Lula travels to China and calls to end US dollar dominance  ["Lula’s meeting with President Xi Jinping in Beijing came just weeks after China and Brazil reached a deal to use their local currencies in bilateral trade, excluding the US dollar. While visiting China, Lula made it clear that de-dollarization is a top priority for his country."
Ben Norton

Covert Geopolitics
India’s New Foreign Trade Policy Aims to Smash Dollar’s Hegemony [India proposes the rupee as a dollar alternative for settlement in its region]
Joydeep Sen Gupta, Asia RT Editor

Russia leaves neoliberal West to join World Majority – Economists Radhika Desai and Michael Hudson explain

​RADHIKA DESAI: Hi everyone, welcome to the seventh Geopolitical Economy Hour, a program about the political and geopolitical economy of the fast-changing world of today.
Video and transcript

Geopolitical Economy
Russia leaves neoliberal West to join World Majority – Economists Radhika Desai and Michael Hudson explain
Radhika Desai, Professor at the Department of Political Studies, and Director, Geopolitical Economy Research Group, University of Manitoba, Winnipeg, Canada, and Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

See also

Moon of Alabama
How China Is Breaking The Colonial Effects Of Western Lending

The Hill
Is there a worldwide run on the Bank of the United States of America? [an emerging perception?]
Douglas MacKinnon, a political and communications consultant, was a writer in the White House for Presidents Ronald Reagan and George H.W. Bush, and former special assistant for policy and communications at the Pentagon during the last three years of the Bush administration

RT — Question More (Russian state-sponsored media)
Top economist [Larry Summers] frets that US is getting ‘lonely’ [important because of who said it. should-read]

So Much Lying from the International Monetary Fund: The Fifteenth Newsletter (2023) [The IMF and World Bank are not about development bu neoliberal globalist control.]
Vijay Prasad, American-based Indian Marxist historian, an executive director of Tricontinental: Institute for Social Research, the Chief Editor of LeftWord Books, and a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China

Blowout bank earnings



Ok let’s look at this from system perspective … total S&P 500 market cap is reported $34T and trailing earnings yield is reported 4.17%.     

$34T x 0.0417= $1.4T S&P500 total earnings…

Let’s just look now at what the Fed is paying banks in IOR:  5% IOR  on 3T reserves = $150B annual of USD reserve transfer to banks with no corresponding liability… accrues directly to capital/retained earnings…

$150B / 1.4T  total earnings = 10.7% … 

so .. Fed is giving certain S&P500 components almost 11% of the total 500 TTM earnings as free munnie…

AND hold up… this does NOT include what other  S&P500 industrial firms are getting directly from Treasury in interest on their retained earnings being saved in USTs and from Bill discounts…

Total S&P500 cash is nearly $3T so now 5% UST interest on that $3T USD savings is almost another $150B…

Government currently providing S&P firms with almost 20% of previous ZIRP era earnings as free munnie…


GDPNow +2.5%


Revised up this week…. Art degree monetarist morons no gonna likee…. Will want to accelerate rate increases…

Used Car inventory at all time low


Prices are not going to be reduced any time soon…. Biden Fed people will keep increasing the rates too which will make monthly payments even higher….  Keep maintaining and repairing your current car bro…

Friday, April 14, 2023

Links — 14 April 2023

The Enlightened Economist
Rawls, reloaded [Review of Daniel Chandler's Free and Equal: What Would A Fair Society Look Like]
Diane Coyle | Professor of Public Policy at the University of Cambridge

Project Syndicate
The Pitfalls of Dollar Hegemony [Review of Perry Mehling's Money and Empire: Charles P. Kindleberger and the Dollar System (2022)]
Jonathan Ira Levy, professor in the Department of History and the Committee on Social Thought at the University of Chicago, and author of Ages of American Capitalism: A History of the United States (Random House, 2021)

Al Mayadeen English
History has its course and timing [The world in transition]
Bouthaina Shaaban

The Baffler
The Wonderful Death of a State [historical backgrounder, unsympathetic presentation of US nationalism and secessionism.]
Quinn Slobodian, Canadian historian, Marion Butler McLean Professor in the History of Ideas; Professor of History, Wellesley College
Excerpted from Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy (2023)

Poland receives Zelensky and prepares direct intervention in Ukraine war [The case for NATO escalation]
Martin Nowak, Johannes Stern
(h/t Ray McGovern)

Daily Reckoning
The World’s About to Change “Big-Time” [US/NATO have opened Pandora's box]
Byron King, Captain (ret.), USN

Gilbert Doctorow — International relations, Russian affairs
Gilbert Doctorow
The US Could Use Some Separation Of Media And State [The inverse of censorship is inserting media bias]
Caitlin Johnstone
Global South
Afghanistan: The hard work towards independence of country, mind, body and spirit [Afghanistan's neighbor get involved]

Statistical Modeling, Causal Inference, and Social Science
4 different meanings of p-value (and how my thinking has changed)
Andrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University

Even with today’s slowdown, profit growth remains a big driver of inflation — run75441

This is a brief and targeted commentary by EPI’s Josh Bivens to which I have added input. The Fed has been flailing away at the economy in the belief Labor is the issue. Josh contends, product or profit markups have been a major issue. He does provide a foundation for his posit.

I look to the supply chain issue(s) as the basis for the higher profits. I experienced similar in getting componentry in 2008-2010. With less supply and a lengthen (and silly lead times) lead time, companies increased prices not due to cost but because they could on items like semiconductors. I was the guy on th other end of the phone listening to the excuse for a higher price. They raised prices because they could and this component was specified by automotive. The manufacturer knew it and we knew it.

It took a while for the market to normalize. I believe we will see similar shortages before a return to normalcy in today’s environment.

I do not make a major case for supply chain here. Instead I concentrate on Josh’s points....
Angry Bear
Even with today’s slowdown, profit growth remains a big driver of inflation

Comments On The Omran/Zelmer MMT Critique — Brian Romanchuk

This article is a grab bag of comments on the paper: “Deficits Do Matter: A Review of Modern Monetary Theory” by Farah Omran and Mark Zelmer. I have mentioned this article before, for the good reason that Mark Zelmer will be on the other side of a panel on Modern Monetary Theory (MMT) that I will be on in late May....
Bond Economics
Comments On The Omran/Zelmer MMT Critique
Brian Romanchuk

Thursday, April 13, 2023

Links — 13 April 2023

NIH — PubMed
Mental Health Challenges Related to Neoliberal Capitalism in the United States
Anna Zeira

With inflation stubbornly high, 58% of Americans are living paycheck to paycheck: CNBC survey
Jessica Dickler

RT — Question More (Russian state-sponsored media)
White House says racism cost US $16 trillion since 2000 [Susan Rice citing Citi report]

Global Inequality
The chronicle of the revolutions foretold? [Important. Should-read. Summarizes the work of Peter Turchin.]
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

A review of “White Malice: The CIA and the Covert Recolonization of Africa” by Susan Williams [backgrounder on Western colonization of the Third World and the rise of the American Empire that is now underatack by decolonization as a foundation of multipolarism]
Kim Scipes, Ph.D., is Professor Emeritus of Sociology at Purdue University Northwest in Westville, Indiana

Life or Debt: The Stranglehold of Neocolonialism and Africa’s Search for Alternatives [The current state of neo-imperialism and  neocolonialism in Africa]

RT — Question More (Russian state-sponsored media)
Putin warrant could derail BRICS summit – South Africa [Wake up call for the Global South/East]

Global South
Massacres in US History— Review of A Long History of America’s Dark Side by Peter Dale Scott and Robert Parry [imperialism and colonialism under the guise of spreading "freedom and democracy."
Larry Romanoff

Gilbert Doctorow — International relations, Russian affairs
The ‘dry residue’ from Macron’s visit to China [French geoeconomics and geopolitics]
Gilbert Doctorow

RT — Question More (Russian state-sponsored media)
[John] Bolton touts ‘grand strategy’ to counter Russia and China ["the West should cut back on social programs to fund military spending, renew testing of nuclear weapons, and provide security guarantees to Taiwan."]

New York Post
Joe Biden boosted Ukraine gas industry as Hunter took Burisma role ["Then-Vice President Joe Biden visited Ukraine on a mission to bolster the country’s energy industry days after his son Hunter joined the board of natural gas company Burisma in 2014 — which a former White House stenographer claims implicates the now-80-year-old in a foreign influence-peddling “'kickback scheme'.”]
Stephen Nelson

The Gateway Pundit
Seymour Hersh Reports that Ukrainian Leader Zelensky Embezzled $400 Million from US Payments Allocated for Fuel
Joe Holt

Seymour Hersh Substack
Seymour Hersh


William Mitchell — Australian labour market – relatively steady and defies the RBA reckoning

This week is a big data week. Today the Australian Bureau of Statistics (ABS) released of the latest labour force data (April 13, 2023) – Labour Force, Australia – for March 2023. The March result is weaker than February’s strong outcome but still relatively robust. Employment rose with a bias towards full-time work and kept pace with population growth such that unemployment fell marginally. The employment to population rose modestly. Overall a good result. Some caution needs to be observed though – the underlying (‘What-if’) unemployment rate is closer to 4.9 per cent rather than the official rate of 3.5 per cent, which indicates the labour market still has slack. The downside is that the broad underutilisation rate rose 0.3 points to 9.7 per cent and that means there are still 1,402.7 thousand Australian workers without work in one way or another (officially unemployed or underemployed). That extent of idle labour means Australia is not really close to full employment despite the claims by the mainstream commentators. The falling inflation rate coupled with the steady labour market which is maintaining relatively low unemployment runs counter to the RBA model, that is being used to justify the interest rate hikes. Guess which one is wrong?
William Mitchell — Modern Monetary Theory
Australian labour market – relatively steady and defies the RBA reckoning
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Summers: Super Core inflation measure not decelerating


So now he’s going to tell the Biden people to keep increasing the rates… Summers wants to demonstrate that Monetarism works and re-establish Monetarisms dominance after 15 years of ZIRP which resulted in no Art Degree “inflation!” …. 

This over any other real economic or Democrat political objective... Democrat left AWOL on this except maybe Pocahontas…

iow if they think their "inflation" comes down but there is no commensurate recession after all of these extreme unprecendented rate increases then Summers will consider it a failure of policy …. not a failure of Monetarism…

Wednesday, April 12, 2023

Waiting for the end of the world — Pepe Escobar

Waiting for the end of the world
Pepe Escobar

See also

President of Russia
Meeting on economic views

James K. Galbraith — The Gift of Sanctions–An Analysis of Assessments of the Russian Economy, 2022 – 2023

Most assessments of the effectiveness of sanctions on Russia, with some exceptions, hold them to have been highly effective. My new INET Working Paper analyzes a few prominent Western assessments, both official and private, of the effect of sanctions on the Russian economy and war effort. It seeks to understand the goals of sanctions and bases of fact and causal inference that underpin the consensus view. Such understanding may then help to clarify the relationship between claims made by Western economist-observers and those emerging from Russian sources – notably from economists associated with the Russian Academy of Sciences (RAS). As we shall see, Russian views parallel those in the West on many matters of fact yet reach sharply different conclusions....
Most Western analysts haven't yet gotten the word that Russia has divorced the West and married itself to the East. Most Western analysts assume it is obvious that dependency on the West is just a recognition of reality, so a country either submits or it is finished economically, hence ripe for regime change and takeover by a compliant elite as a Western colony. Russia is of a different view for well-thought-out reasons and much prior preparation for what it assumed was inevitable in any case. Much of the rest of the world appears to be of a similar mind.

Naked Capitalism
James K. Galbraith: The Gift of Sanctions – An Analysis of Assessments of the Russian Economy, 2022 – 2023
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin


There are two principal reasons that the West has long salivated for submitting Russia to its control. First, as the heartland Russia controls Eurasia and accordingly the world island according to Halford Mackinder's geopolitical theory adopted by Zbigniew Brzezinski. Russia has been under attack from its Western direction since its inception and even before in terms of tribal battles for territorial control. So this is nothing new and Russia prepared for it.

The second reason is Russia's abundant natural resources that the West not only covets but also needs. Russia is the most resource-rich country in the world. Putin is especially hated in the West, since he disrupted the neoliberal plan to submit Russia "democratically" under Yeltsin. It was working until the US attacked Serbia. Then the game changed drastically when Yeltsin chose Putin to replace him.

TOP 10 Countries with Most Natural Resources in the World

The World Fact Book — CIA
Country Comparison — Real GDP (purchasing power parity) [2023]

William Mitchell — US labour market defies the Federal Reserve and continues to improve

Last Friday (April 7, 2023), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – March 2023 – which revealed continuing employment growth and rising participation with unemployment falling modestly. A good confluence of events. We have been looking for a turning point in the US labour market after several months of interest rate increases. But it hasn’t come yet. Indeed, it is going in the opposite direction to that envisaged by the Federal Reserve ‘model’, upon which they justify their interest rate decisions. Guess which is wrong? Most of the aggregates are steady and in terms of the pre-pandemic period, March’s net employment change was still relatively strong. Real wages continued to decline in the face of a decelerating inflation rate. Overall, the US labour market is steady and doesn’t appear to be contracting in the face of the Federal Reserve interest rate hikes....
William Mitchell — Modern Monetary Theory
US labour market defies the Federal Reserve and continues to improve
Bill Mitchell |rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, April 11, 2023

Links — 11 April 2023

Asia Times
Xi topping Biden in New Cold War’s economic game
William Pesek

Asia Times
Macron has no interest in ‘decoupling’ from China
Scott Foster

Breaking Defense
US tech firms should wargame response if China invades Taiwan, warns NSA cybersecurity chief
Sydney J. Freedberg Jr.

Tax And MMT Mudslinging —  Brian Romanchuk

I have been tied up courtesy of a major power failure, Easter, and other family obligations. Over the weekend, there was a blow up on Twitter between Richard J. Murphy and what appeared to be dozens of Modern Monetary Theory (MMT) proponents. (I ignore any Twitter thread involving lots of people and lasts more than a day, so I cannot fill in more details.) The dispute was about the role of taxes (although it devolved into whining about attitudes). Since many of my readers will have found me via Twitter, I just want to explain why this is largely a non-issue....
Bond Economics
Tax And MMT Mudslinging...
Brian Romanchuk

See also

Tax Research UK
MMT and tax: an issue that needs to be addressed again
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Real Progressives — Race to the Bottom

Map of US states.

Real Progressives (MMT based)
Race to the Bottom

Saturday, April 8, 2023

Iran and Saudi Arabia: a Chinese win-win — Pepe Escobar

The turning point came on 26 February, 2022, when Washington’s neocons – in a glaring display of their shallow intellects – decided to freeze and/or steal the reserves of the only nation on the planet equipped with all the commodities that really matter, and with the necessary nous to unleash a momentous shift to a monetary system not anchored in fiat money.

That was the fateful day when the cabal, identified by journalist Seymour Hersh as responsible for blowing up the Nord Stream pipelines, actually blew the whistle for the high-speed de-dollarization train to leave the station, led by Russia, China, and now – welcome on board – Iran and Saudi Arabia.…
One meaning of de-dollarization is ending the dominance of the USD, the USD as the global reserve currency, and crashing the USD. Many assume that this is the primary meaning but it is not. One might think it is from the amount of talk about on the Internet, but this is not the view of realists, in particular, those directly involved as victims or potential victims of dollar dominance and the choice to weaponize it. They are looking to escape from the hegemon's trap.

For the parties involved in settling trade without using the dollar system, de-dollarization means establishing payment systems that avoid the use of the USD system and therefore the ability of the US to weaponize its currency to force its will on other sovereigns. How this affects the USD is not a major concern of theirs. If it weakens the US, well and good as far as they are concerned, but this is not the objective.

This escape process is now launched, initially with bilateral trade in the currencies of the trading partners. However, this is considered an ad hoc workaround adopted out of necessity. A more permanent system is needed.

Alternatives such as digital currency, and a commodity-based system are under consideration. In addition, discussion is underway about developing a new monetary system suitable for the emerging new multipolar world order.

The people involved in this discussion at the professional level are well aware of previous commodity-based systems, both their pros and cons. No one is considering a return to the gold standard of old. Rather, there is interest in creating a settlement vehicle that is partly constituted of commodities and partly of financial instruments, such as a basket of currencies and commodities. John Maynard Keynes's bancor proposal at Bretton Woods, which lost to the dollar system that was adopted, serves as a precedent, for example, as does the SDR system of the IMF.

At this point the only thing that is certain is that the game has changed drastically with Global South/East actively on board. 

Friday, April 7, 2023

The diachronic social — Daniel Little

An earlier post offered what is for me a fairly large change of orientation on fundamental questions of social ontology: a conviction that the concept of ontological individualism is no longer supportable. My concern there was that this phrase gives too much ontological priority to individual actors; whereas the truth about the social world is more complex. Individuals are indeed the substrate of social structures and entities, but social entities are in turn constitutive of individual social actors.

The implication is that our social ontology needs to give equal priority to both actors and structures. But how can we make sense of these three ideas in a non-paradoxical way:

Why is this significant? MMT is a type of institutional economics, for example. Institutional arrangements are some of the structures that Daniel Little mentions as being causal factors in social science, including economics. 

Understanding Society
The diachronic social
Daniel Little | Professor of Philosophy at the University of Michigan-Dearborn, Professor of Sociology and Public Policy at the University of Michigan, Ann Arbor, and the Chancellor (emeritus) for the University of Michigan-Dearborn 2000-2018

China, India to account for half of global economic growth in 2023: IMF chief — Xinhua

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on Thursday said the world economy is expected to grow less than 3 percent this year, with India and China projected to account for half of global growth in 2023....
Xinhua (Chinese state media)

How Do Interest Rates (and Depositors) Impact Measures of Bank Value? — Stephan Luck, Matthew Plosser, and Josh Younger

The rapid rise in interest rates across the yield curve has increased the broader public’s interest in the exposure embedded in bank balance sheets and in depositor behavior more generally. In this post, we consider a simple illustration of the potential impact of higher interest rates on measures of bank franchise value....
Liberty Street Economics — FRBNY
How Do Interest Rates (and Depositors) Impact Measures of Bank Value?
Stephan Luck, Matthew Plosser, and Josh Younger

Thursday, April 6, 2023

Links — 6 APR 2023

RT — Question More (Russian state-sponsored media)
China to launch rival undersea comms network – Reuters

Canadian Dimension
Russia and the emergence of the post-Western world
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

Gilbert Doctorow — International relations, Russian affairs [Russian realignment away from the West toward the East and South and the ending of liberalism in Russian politics]
Russia’s New Foreign Relations Concept will usher in a fundamental change in the balance of its domestic politics
Gilbert Doctorow

Sputnik International (Russian state-sponsored media)
African and Russian Businesses Hold ‘Huge Potential’ for Cooperation, [Russian] Senator Says

India Punchline
US sees in Finland’s NATO accession encirclement of Russia
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

Al Mayadeen English (Arab Independent Media Satellite Channel)
Why Zelensky will NOT take back Crimea [Crimeans overwhelmingly oppose it]
Rick Sterling

Bracing Views
Philip K. Dick on the Need to Confront Reality
W. J. Astore, Lieutenant Colonel (USAF ret.), taught at the Air Force Academy, the Naval Postgraduate School, and currently at the Pennsylvania College of Technology

Liberty Street Economics — FRBNY
MCT Update: Inflation Persistence Declined Modestly in February
Martin Almuzara, Babur Kocaoglu, and Argia Sbordone

Oilprice (How's that price cap working for ya?)
Chinese Refiners Buy More Iranian Oil As Competition For Russian Crude Heats Up
Tsvetana Paraskova

China’s Coal Boom Is Undermining Global Phase-Out Efforts
Irina Sla

Tighter Oil Market Becomes More Vulnerable To Price Spikes
Julianne Geiger

Russian Urals Breaks Past $60 Price Cap Thanks To OPEC+
Charles Kennedy

U.S. Losing Influence As Saudi Arabia Joins Shanghai Cooperation Organization
Simon Watkins

China And Russia Look To Challenge The Petrodollar
Tsvetana Paraskova

Geopolitical Economy (there are also several links to Michael Hudson on the banking crisis at the home page)
Countries worldwide are dropping the US dollar: De-dollarization in China, Russia, Brazil, ASEAN
Ben Norton

TASS (Russian state media) [Western automobile manufacturers leave Russian market, Chinese ones enter]
China’s BAIC opens first dealership in Moscow
ECNS (Chinese official English news service)
China plans to restructure disciplines, majors at universities
Xinhua (Chinese state media)

William Mitchell — The absurdity of the current monetary policy dominance exposed

We start to see the absurdity of the current reliance on monetary policy as a counter-stabilisation tool, when you read the calls from the Bank of England Monetary Policy Committee member talking about the risk of a ‘significant inflation undershoot’. In a detailed analysis of the current situation, the external MPC member noted that inflation was falling faster than expected because the supply constraints were reversing quickly. She also noted that the interest rate hikes had now reached a point where unemployment was certain to rise and lead to, in the face of the supply reversals, to deflation. And that would require faster and larger interest rate cuts. Here is an insider admitting that the Bank of England is more or less gone rogue and out-of-step with reality. Overshoot at the top of the hiking cycle, swinging to a massive undershoot at the bottom. Absurd....
William Mitchell — Modern Monetary Theory
The absurdity of the current monetary policy dominance exposed
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia P

Wednesday, April 5, 2023

Why measuring inflation is surprisingly challenging — Michael Madowitz

This is a reason I put "inflation"" in quotes — lack of theoretical (causal) explanation and problems with measurability since "inflation" is not directly observable, while "inflation" gets treated as if it were a "thing." It's not only complicated but also complex, since prices are affected by expectations under uncertainty.
More research is clearly needed to understand the best measures of inflation to inform macro models, especially as the U.S. economy continues to respond to structural changes. There is a need for both an accurate understanding of capacity constraints in the economy, and a consistent measure of changes in inflationary expectations—and these may not be well captured by any one measure, let alone the measures traditionally used. For U.S. policymakers, the challenge is twofold. They need to calm inflationary expectations on the one hand, even if expectations are not based on a full understanding of what may persistently drive future inflation, while also preserving the health of the economy itself on the other. Balancing these needs will also require reexamining old assumptions.

Measuring inflation is hard. Official statistics are very good at measuring inflation, but how to use those measures is more tricky because it is conceptually difficult and context dependent. The COVID pandemic makes the application of go-to inflation measures even more challenging as it created unprecedented shifts in spending across sectors, leading to shifts appearing as increases or decreases in major components of primary inflation measures.
Washington Center for Equitable Growth

All or Nothing Foreign Policy — Danny Haiphong interviews Michael Hudson

Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
All or Nothing Foreign Policy
Danny Haiphong interviews Michael Hudson

Are the OPEC production cuts a problem? — Bill Mitchell

It’s Wednesday and so I have a few items to discuss followed by some music. Many readers have E-mailed me asking about last week’s decision by the OPEC+ cartel to cut production of crude oil by 1.66 million barrels per day. Taken together with the previous cuts (2 millions barrels per day) in October, this pushed the price of oil up within a day or so back over $US80 per day. Many commentators immediately announced this would drive inflation back up and force central banks to go harder on interest rates. I disagree with those assessments. When analysing cartel behaviour (and OPEC+ is such an organisation), one has to distinguish between price stability and price gouging exercises. As I explain below, I believe OPEC+ to be engaged in a price stabilising activity in the face of anticipated reductions in global demand for crude oil. The risk is that demand will fall further than the producers expect and they will have to make further cuts. But even if the new price level holds, that won’t really trigger a new bout of accelerating inflation.
Cartel pricing as an economic indicator based on supplier expectations. Is a slowdown in the growth of the global economy in the offing?

William Mitchell — Modern Monetary Theory
Are the OPEC production cuts a problem?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Further Comments On Funded Public Pensions — Brian Romanchuk

As a further comment on “funded” public pensions (link to previous note), I just want to comment on the side effects of such “funding.” (To recap, a central government could create fictitious bonds to match “pension contributions,” which has the same cash flows as a pure “pay-as-you-go” scheme. The alternative Canada has switched towards is to buy financial assets with the “pension contributions” — although some of those assets would be reinvested in bonds guaranteed by the Government of Canada.) As I discussed, this is economically equivalent to the Government of Canada levering up its balance — issuing bonds to the private sector to buy private sector assets.

In this article, I will make some random comments about the implications of that policy. Although I believe that the procedure is somewhat silly from an economic standpoint, there is a logic behind it.
Usually the logic behind what a neoliberal government does is some special interests' profits.

Bond Economics

Chinese Tutoring Giants Set Sights on Overseas Expansion — Lin Xi

The Chinese people are such fanatics about educating their offspring that the Chinese government felt it needed to step in and give the kids a break by liming their exposure to both formal education (amount of homework) and informal education (after-school tutoring). 

Tutoring was a growth industry in China until the reforms curtailed it. It had already expanded outside mainland China and now the push is on to expand it further to make up for the market lost in China. It serves not only Chinese living abroad but other Asian, Asians in general tending to be obsessed with education in comparison with Western interest in it.

Education and health are key components of a nation's infrastructure. Infrastructure provides both a tangible foundation for national progress and also an intangible one in terms of the quality of human resources assessed on the basis of the ability to apply knowledge and skills and to grow. This constitutes labor as a factor of production versus capital and land.

If you are interested in education or China, this is an interesting article that takes only a couple of minutes to read.

Sixth Tone
Chinese Tutoring Giants Set Sights on Overseas Expansion
Lin Xi

See also

Here Comes China

See also

Russia is reinstating the Soviet educational system. The Bologna system is the system followed by European nations but not by the rest of the world, including the US, which has its own system.

Modern Diplomacy
Who is cutting ties with whom? Russia and the Bologna education system
Anna Kolotova, PhD in International Relations in Jilin University, China, postdoctoral fellow in Global Engagement Academy, Shandong University (Weihai), China


The problem in the West is that the neoliberal trend away from the welfare state toward the market state has resulted in a deterioration of public purpose for the simple reason that neoliberalism denies the existence of public goods and holds that all goods are subject to the market process since it optimizes outcomes. The problem is that the definitive outcome in a market-based system is profit rather than actual results.

Lars P. Syll’s Blog
The Swedish for-profit ‘free school’ scandal
Lars P. Syll | Professor, Malmo University


Marginal Revolution
Khan Academy Joins with OpenAI
Alex Tabarrok | Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, and a research fellow with the Mercatus Center