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Written by Burnham Banks
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Sunday, 19 May 2013 23:24 |
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The credit infused growth of the last twenty years has allowed many an inefficiency to persist undetected or un-addressed. The EUR is one such inefficiency. Unless national factor prices are flexible or factor productivities converge between countries in the Eurozone, a single currency must impede market clearing leading to inefficient allocation of resources leading to underemployment or unemployment. Only the acute dearth of credit has exposed this systemic weakness, at least to some. Many economists and central bankers continue to focus on the financial markets effects of the EUR without addressing its impact on the real economy. A point will be reached when the real economy issues will demand resolution.
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Last Updated on Monday, 20 May 2013 00:58 |
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Written by Burnham Banks
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Sunday, 19 May 2013 23:22 |
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The trouble with gold is that it has long derived its value as an alternative to fiat currencies and paper assets whose values are derived from collective trust or faith and little else. Gold has very little use except as a supply constrained store of value. As trust and faith are restored in paper assets, it is reasonable not to be surprised that gold should lose its value as an alternative. It is ironic that gold, by being an alternative to fantasy, should find its value hostage to the whims of fantasy. |
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Written by Burnham Banks
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Tuesday, 14 May 2013 23:39 |
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Official trade data for China showed exports growing YOY by 14.7%, ahead of forecasts of 9% and imports of 16.8%, ahead of forecasts of 13%. Closer inspection of the data reveals interesting themes. Notably, the bulk of the rise in exports was to Asia, as was the bulk of imports. Ex Asia, the numbers for imports and exports were less exuberant, particularly for exports.
What's going on?
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Last Updated on Tuesday, 14 May 2013 23:56 |
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Written by Burnham Banks
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Thursday, 16 May 2013 03:00 |
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Not everyone has time to read the lengthy, boring letters that I write, so I thought I'd summarize and simplify.
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Written by Burnham Banks
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Monday, 13 May 2013 23:18 |
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The game of chicken is played when two cars are driven at each other at high speed. The one that flinches first, loses. The one that flinches last, wins. If neither flinch, they both lose.
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