Bill Mitchell — Inflation rises in Australia – but transitory factors and natural disasters are the reason

Today, my on-going inflation watch turns to Australia, given the release today (July 28, 2021) of the latest – Consumer Price Index, Australia – for the June-quarter 2021. The data is consistent with what we are seeing across many nations as supply chains are disrupted by the pandemic. Energy prices are adjusting back upwards and because the base from which we are judging these quarterly rises was lower as a result of price suppression during the downturn, the recovery in the pre-pandemic price levels deliver larger than usual price increases (when the base is higher). In Australia’s case, a major recent flood and a long drought before that have also complicated matters by driving up food prices. All these impacts are transitory. The CPI rose by 0.8 per cent in the June-quarter 2021 and over the 12-months to June 2021 it rose 3.8 per cent. But the key to understanding the trends in the data is to appreciate that the less volatile series were still rising at rates below the RBAs inflation targetting range – the Trimmed Mean rose just 0.5 per cent and the Weighted Median rose 0.5 per cent. So nothing to see here. The most reliable measure of inflationary expectations are flat and below the RBA’s target policy range.

Bill Mitchell – billy blog
Inflation rises in Australia – but transitory factors and natural disasters are the reason
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

George Monbiot on Brexit: Capitalism's Civil War

 I did change my mind about Europe. I know from an MMT POV its terrible, but I thought it was better than what the Brexit crowd had to offer. It's best to stay in and try to reform it, and dump the Euro, so countries can deficit spend again. Although Europeans have a lot in common, they are also too different to become one country at this present time.

George Monbiot is superb here. It's hard to figure him out: the left hate him because he supported the Syrian war, and I bet he's xenophobic about China and Russia too, but I found this video to be inspiring. 

I'm not dogmatic, but his stance on Syria infuriated me too. How could he support another Western backed war in the Middle East? 

“Farage and his ilk are just tools of something much bigger & much deeper than they are”

Tesla Smashes Expectations With Q2 Earnings — Charles Kennedy

Elon Muck on a roll.

Oilprice
Tesla Smashes Expectations With Q2 Earnings

Charles Kennedy

McKinsey — COVID-19 and education: The lingering effects of unfinished learning

As this most disrupted of school years draws to a close, it is time to take stock of the impact of the pandemic on student learning and well-being. Although the 2020–21 academic year ended on a high note—with rising vaccination rates, outdoor in-person graduations, and access to at least some in-person learning for 98 percent of students—it was as a whole perhaps one of the most challenging for educators and students in our nation’s history.1

Our analysis shows that the impact of the pandemic on K–12 student learning was significant, leaving students on average five months behind in mathematics and four months behind in reading by the end of the school year. The pandemic widened preexisting opportunity and achievement gaps, hitting historically disadvantaged students hardest. In math, students in majority Black schools ended the year with six months of unfinished learning, students in low-income schools with seven. High schoolers have become more likely to drop out of school, and high school seniors, especially those from low-income families, are less likely to go on to postsecondary education. And the crisis had an impact on not just academics but also the broader health and well-being of students, with more than 35 percent of parents very or extremely concerned about their children’s mental health.

The fallout from the pandemic threatens to depress this generation’s prospects and constrict their opportunities far into adulthood. The ripple effects may undermine their chances of attending college and ultimately finding a fulfilling job that enables them to support a family. Our analysis suggests that, unless steps are taken to address unfinished learning, today’s students may earn $49,000 to $61,000 less over their lifetime owing to the impact of the pandemic on their schooling. The impact on the US economy could amount to $128 billion to $188 billion every year as this cohort enters the workforce.

Federal funds are in place to help states and districts respond, though funding is only part of the answer. The deep-rooted challenges in our school systems predate the pandemic and have resisted many reform efforts. States and districts have a critical role to play in marshaling that funding into sustainable programs that improve student outcomes. They can ensure rigorous implementation of evidence-based initiatives, while also piloting and tracking the impact of innovative new approaches. Although it is too early to fully assess the effectiveness of postpandemic solutions to unfinished learning, the scope of action is already clear. The immediate imperative is to not only reopen schools and recover unfinished learning but also reimagine education systems for the long term. Across all of these priorities it will be critical to take a holistic approach, listening to students and parents and designing programs that meet academic and nonacademic needs alike....

Generational setback?

McKinsey
COVID-19 and education: The lingering effects of unfinished learning

Emma Dorn, Bryan Hancock, Jimmy Sarakatsannis, and Ellen Viruleg

Open interactive popup

Bill Mitchell — And the winner is Brisbane … well kind of … or maybe not

The Olympics have become just another commercialization of sport. If something can be capitalized, it will be, even war, or maybe especially war.

Bill Mitchell – billy blog
And the winner is Brisbane … well kind of … or maybe not
Scott Baum, Professor of Urban and Regional Analysis, School of Environment and the Cities Research Institute, Griffith University

China moves to reassure rattled investors after US$574 billion rout

LOL commies worried about their stock portfolio... strange days... notice how they price it in USDs… USD zombies…

China’s state media moves to reassure rattled investors after rout wiped US$574 billion off stock market https://t.co/mP5pN8k1BD

— South China Morning Post (@SCMPNews) July 27, 2021

ARK exits China

 

Cathie must have got a tip-off on the commie crackdowns…

(Bloomberg) -- Cathie Wood is exiting Chinese stocks .. [getting] rid of shares in tech behemoth Tencent Holdings Ltd. and property site KE Holdings Inc. every day last week, according to data on the firm’s trading activity.

(h/t NatAlliance)

— Carl Quintanilla (@carlquintanilla) July 26, 2021

Debt Ceiling MAGA breakdown

 

Bannon, Navarro and a gold dude provide a breakdown on the current debt ceiling situation… I think this segment identifies pretty well the current populist libertarian MAGA GOP wing position on “debt ceiling”… MMT gets a disparaging mention…

If it is re-suspended they think it’s bearish USD, if US defaults they think it’s bearish USD, if it is re-suspended -they think it is bearish bonds and if US defaults they provide no opinion on bonds…

Sputnik — Chinese Tech Regulator Clamps Down on Anticompetitive Practices, Breaks Tencent’s Music Deals

 China is cracking down on Big Tech.

Sputnik International
Chinese Tech Regulator Clamps Down on Anticompetitive Practices, Breaks Tencent’s Music Deals

Washington Relocating from the Middle East to Southeast Asia — Salman Rafi Sheikh

The US shifts emphasis from bases of chaos to the perceived renewal of "great power competition between the "free world" and "authoritarian dictatorships" China and Russia. Back to the Cold War and vastly increased military spending by the US and allies. China and Russia snicker as the "allies" stretch themselves thin.

NEO
Washington Relocating from the Middle East to Southeast Asia

Salman Rafi Sheikh

Projection And Deflection: Russia’s Infrastructure — Patrick Armstrong

When you see a Western piece saying that Russia is deficient in this or that, it’s wise to see it as just a projection of the West’s shortcomings.

About Russia's economy and infrastructure (versus the US).

US projection is hardly limited to Russia. In fact, in many cases the so-called deficiencies of other countries that the US points to were caused directly by US foreign policy.

Strategic Culture Foundation
Projection And Deflection: Russia’s Infrastructure
Patrick Armstrong

For Bond Bears, Patience Is A Virtue — Brian Romanchuk

Most discussion of the Treasury market coming from people who are not rates strategists involves hoping for or predicting the collapse of the bond market. Nobody likes rates to be this low, and they are an insult to those people who studied Economics 101 and are certain that bond investors have the constitutional right to demand a particular real rate of return.

It may very well be that the bond bears will be ultimately vindicated. However, the rule of thumb from previous cycles is that you do not want to be sitting in short positions too far in advance of the rate hike cycle. Negative carry adds up if you are stuck in a position for three years or more….

Bond Economics
For Bond Bears, Patience Is A Virtue
Brian Romanchuk

BRI vs New Quad for Afghanistan’s Coming Boom — Pepe Escobar

You can't tell the players without a scorecard.

The Unz Review
BRI vs New Quad for Afghanistan’s Coming Boom

Pepe Escobar

Lars P. Syll — Cherry-picking economic models

A big reason that economics is not like a natural science. 

It's the subject matter, stupid. Economics is a social science, with all the limitations that come with it.

Lars P. Syll’s Blog
Cherry-picking economic models
Lars P. Syll | Professor, Malmo University

Bill Mitchell — Calling the British PAC, IFS – it is time we all moved on from the debt and deficit hysteria

The BBC in Britain carried a story yesterday (July 25, 2021) – UK will be paying for Covid for decades, say MPs – that began with the assertion that “Taxpayers will bear the costs of Covid ‘for decades'”. I guess there is some truth in that statement – families will remember their loved ones that died from the virus and those who are stricken with Long COVID will probably endure the negative effects for the rest of their lives. In that sense, if they are also ‘taxpayers’ they will be ‘paying’ the ‘costs’ of the pandemic. But, of course, that is not what the BBC article was wanting its readers to absorb. The intent was to lie to British citizens that somehow their tax burdens would have to rise to offset the deficits that the British government has run dealing with the collapsing economy. I know the BBC was just reporting on a document released by the House of Commons Committee of Public Accounts – COVID 19: Cost Tracker Update (released July 25, 2021). But the role of the public broadcaster is not to act as a press releasing agency for such politicised organisations, which, given the absence of any alternative voice in the article, is exactly what it did. The demise of critical scrutiny in economics commentary by national broadcasters everywhere is a major problem and makes them indistinguishable from scandalous media organisations run by private sector owners.…

Bill Mitchell – billy blog
Calling the British PAC, IFS – it is time we all moved on from the debt and deficit hysteria
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Drinking 6 Cups of Coffee a Day? Your Brain May Pay For It Later, Says a Large Study

 It might be the caffeine that causes it, and in that case, then too much tea is not good too. I drink mugs of tea and I was fine after two of them yesterday, but then I had a third one about an hour later and I felt the caffeine, which I didn't like. I was surprised as it's rare for me to notice the caffeine because the very light teas I drink are low in it. 

In the early afternoon I had two cups of green tea and I felt fine. Mid afternoon onwards I always drink decaf green tea or redbush tea (rooibos) and one mug of cocoa. I might have to space the tea out a bit more in the morning, but two mugs of darjeeling, or sencha, on the trot is one of those small things in life which gives me enormous pleasure.

What's concerning is who drinks cups nowadays? In Britiain we all use mugs and my ones are the larger type. 

Many of us enjoy a cup of coffee or two throughout the day, but a new study suggests that too much of the stuff could shrink brain volume and increase the risk of dementia over the long term.

The excess coffee risks can jump quite sharply, though you do need to be drinking a lot of the beverage: The study found that people drinking six or more cups a day had a 53 percent higher chance of getting dementia than those who drank one or two cups or less.

Science Alert

Drinking 6 Cups of Coffee a Day? Your Brain May Pay For It Later, Says a Large Study

Age of Economics — Interview: Branko Milanović, Professor of economics at CUNY, LSE and IBEI (Barcelona)

Video and transcript. A good follow up to J. W. Mason's recent post.

Age of Economics — Interview
Branko Milanović, Professor of economics at CUNY, LSE and IBEI (Barcelona)

China is gearing up to activate the world's first 'clean' commercial nuclear reactor — Ben Turner

Thorium.

Chinese government scientists have unveiled plans for a first-of-its-kind, experimental nuclear reactor that does not need water for cooling.

The molten-salt nuclear reactor, which runs on liquid thorium rather than uranium, is expected to be safer than traditional reactors because the molten salt cools and solidifies quickly when exposed to the air, insulating the thorium, so that any potential leak would spill much less radiation into the surrounding environment compared with leaks from traditional reactors.

The prototype reactor is expected to be completed next month, with the first tests beginning as early as September. This will pave the way for the building of the first commercial reactor, slated for construction by 2030....

Live Science
China is gearing up to activate the world's first 'clean' commercial nuclear reactor

Ben Turner

Wake up, America: The world just isn’t that into you

 To much of the world America looks like a declining power, precisely because it is a declining power

The people with big jobs in Washington came of age in the 1980s and 1990s, when America was the technological marvel of the world, and American inventions created the digital age. We haven’t done a lot lately except code some complicated software.

China has installed about 80% of the world’s 5G mobile broadband capacity, the carrier for the Fourth Industrial Revolution as much as railroads were for the First Industrial Revolution, and is moving much faster towards smart cities, automated ports, autonomous vehicles, self-programming robots and a wealth of other 5G applications.

Asia  Times

Wake up, America: The world just isn’t that into you

Russia Sends Aid to Cuba After Anti-Government Protests

 Russia remembers its old ally, while the US imposes more sanctions.

Russia dispatched nearly 100 tons of humanitarian aid to Cuba, the Defense Ministry said Saturday, following unprecedented street protests over the communist country's worst economic crisis in decades.

The delivery was directly ordered by President Vladimir Putin, it said.

Russia Sends Aid to Cuba After Anti-Government Protests

J. W. Mason — At Age of Economics: How Should an Economist Be?

The website Age of Economics has been carrying out a series of interviews with economists about what the purpose of the discipline it is, and what its relationship is to capitalism as a historical social system. I believe there will be 52 of these interviews, one each week over the course of 2021. Earlier this spring, they interviewed Arjun Jayadev and myself. You can watch video of the interview here. I’ve pasted the transcript below....

J. W. Mason's Blog
At Age of Economics: How Should an Economist Be?
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

We all move at the Speed of Light

Easily the best video I've seen about Space-time. 

 Is it possible to go faster than the speed of light? Would this mean going back in time? What is so fundamental about this precise speed?

We all move at the Speed of Light

Yellen warns of default risk by October

 

Yo, they  just had $700b in their account at the Fed and they can put IOUs in the FERS for a couple hundred $B… there is no hurry… they can spend their account down to zero in several months… and  they don’t need some stupid “coin!” …. they can take the rest of the summer off and worry about this in the fall…

Secretary Janet Yellen said the Treasury Department will begin special steps to avoid breaching the U.S. debt limit, while urging lawmakers to act “as soon as possible” https://t.co/NI5U7M905m

— Bloomberg Markets (@markets) July 23, 2021

Lars P. Syll — It’s not the debt we need to fix, stupid! It’s our thinking.

The ad nauseam repeated claim that our public debt is excessive and that we have to balance the public budget is nothing but absolute nonsense.

Debt phobia and deficit hysteria have descended into gaslighting.

Lars P. Syll’s Blog
It’s not the debt we need to fix, stupid! It’s our thinking.
Lars P. Syll | Professor, Malmo University

AOC weighs in on “inflation!”

 

She says currently we have an excessive demand problem and we need to expand import facilities because we can’t import enough to meet current demand … which undermines any present argument for continued general fiscal support… good job…

GOP can just cite her own analysis here in support of fiscal restraint to fight their figurative “inflation!”…

This just in: Democrats with the collective IQ of a bag of Cheez-Doodles insist the Fed prints $5 trillion then perform “analysis” of inflation. Talk about a total circus. This would be like me opining on string theory. Or having a full head of hair. pic.twitter.com/3ZAoasRRGb

— Quoth the Raven (@QTRResearch) July 23, 2021

Net-Zero 2050 May Need Up To $173 Trillion Investments — Tsvetana Paraskova

Where is the money going to come from? (snark)

Actually, the estimate is between 92 and 173 trillion in USD terms over the next 30 years. It is doable but will take concerted effort in a divided world, especially when the US is divided internally on the issues involved. The problem is more political than economic.

Oilprice
Net-Zero 2050 May Need Up To $173 Trillion Investments
Tsvetana Paraskova

Debate about the National Disability Insurance Scheme driven by the usual ‘taxpayer’s money’ arguments — Scott Baum

Today, we have a guest blogger in the guise of Professor Scott Baum from Griffith University who has been one of my regular research colleagues over a long period of time. Today, he is writing about the way the Federal Australian government is starving the National Disability Insurance Scheme of funding. The usual arguments are being used – ‘taxpayer’s funds’ are in short supply – which seriously undermine the future for thousands of people with disabilities. The NDIS is the national structure that supports people with disabilities to increase their capacity to participate in employment and provide opportunities for them to so....

Bill Mitchell – billy blog
Debate about the National Disability Insurance Scheme driven by the usual ‘taxpayer’s money’ arguments
Scott Baum, Professor of Urban and Regional Analysis, School of Environment and the Cities Research Institute, Griffith University

Debt Ceiling

 

GOPer Flimsy Graham putting Social Security and Medicare on the table now … that ought to help loosen things up…  this going to be wild…

DEBT CEILING : @LindseyGrahamSC tells us he could vote to raise debt ceiling if he gets a Social Security and Medicare trust fund commission and/or other reforms

— Erik Wasson (@elwasson) July 21, 2021

Biden allays “inflation!” fears

 

Boy I bet all the bond bear inflationista assholes are going to be running for the hills now….  :p

THERE’S A LOT TO UNPACK HERE.
pic.twitter.com/rnCIX1L4Hy

— INVESTMENT HULK (@INVESTMENTSHULK) July 22, 2021

5 Wild New Ways To Generate Energy — Alex Kiman

Not economically feasible — yet. The point is that serious people are working on this and funds are being invested.

Widespread recognition of the need for going green could change things quickly.

Oilprice
5 Wild New Ways To Generate Energy
Alex Kiman