Englund

Why did Europeans and North Americans come to dominate the modern world, overtaking peoples in places like China and India? The German sociologist Max Weber put it down to Protestant ethics and asceticism.  Harvard academic Joseph Henrich has a different big idea: not marrying your cousins.  Beginning around 600AD the Roman church kicked off a millennia-long campaign to promote good Christian marriages, banning unions not merely between first cousins but distant relatives too.  The result transformed the organisation and inner psychology of once-tribal European societies, giving birth in Henrich’s telling to the “weirdest people in the world” — where “WEIRD” stands for “Western, educated, industrialised, rich and democratic”. FT 28 december 2020 https://www.ft.com/content/dfadcaf5-b644-4abc-ae8f-65ae912e321f

Med en egen europeisk skuldpolitik och egna europeiska skatter har EU nu fått en egen finanspolitik och det förändrar unionens karaktär.  Euron fungerar precis som Kohl och Mitterrand tänkte sig. Ett gemensamt mynt skapar ett oåterkalleligt gemensamt öde och binder ihop medlemsländerna till något som alltmer liknar en stat.  Det finns inga statslösa valutor och det finns inga andra alternativ än att hålla ihop. Med britterna kvar som medlemmar hade detta aldrig hänt. Men nu går det undan och länder som Sverige har inte en chans att hålla emot. Ledare DI 27 december 2020 https://www.di.se/ledare/underskatta-inte-britterna/ Kommentar RE: Så länge vi står utanför euron kan vi lämna EU om vi vill. Om vi inför euron blir vi som Grekland. ECB kan då se till att pengarna i bankomaterna tar slut om vi inte lyder Bryssel. -- Skall Sverige bestå som självständig stat eller bli en delstat i Europeiska Unionen? Moderaterna borde upphöra med att vara EU- och Euro-kramare och sätta ner fote...

När konsument­prisinflationen låg några tiondelar under inflationsmålet, infördes negativ styrränta under 2015–2019 trots att svensk ekonomi befann sig i en högkonjunktur under dessa år.  Samtidigt köpte Riksbanken statsobligationer för hundratals miljarder kronor SvD 10 december 2020 https://www.svd.se/hejdlos-kreditexpansion-okar-risken-for-ny-kris Artikeln bygger bland annat på två artiklar av författarna i Ekonomisk Debatt nummer 6 och nummer 8 2020.  Lars Jonung hos IntCom

- Moderaterna bör vara tydligare med på vilka områden, utöver dagens, vi är beredda att dela suveränitet och acceptera en federalistisk beslutsordning, skriver han. Men han undviker E-ordet. Euron. SvD 19 december 2020 https://www.svd.se/vad-vill-moderaterna-med-eu-och-europa Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det. Göran Persson 1997-10-13, Fichtelius, sid. 391

Support for the rationality of the US market today is that 55 per cent of the increase in the S&P 500’s market value over the past 12 months is due to gains in the information and technology sector. Given the interest rates, then, stock markets are not overvalued.  The big questions are whether real interest rates will jump, and how soon. So will the forces that have made real interest rates negative dissipate and, if so, how soon? These are the big questions. The answers will shape the future. Martin Wolf 15 Decenber 2020 https://www.ft.com/content/9484ea73-5fd3-4e3e-9174-717848d5118c

Den amerikanska valutan stärktes mot kronan under coronakrisens inledningsskede men har sedan dess fallit med nästan 2 kronor. I dag är en dollar värd cirka 8:50 kronor. I nuläget äger svenska sparare 144 miljarder kronor investerade i USA-fonder, enligt Fondbolagens senaste statistik. Ytterligare 1 358 miljarder är investerade i globala fonder där amerikanska aktier ofta ges mycket utrymme. SvD 14 december 2020 https://www.svd.se/valutaproffs-dollarras-vantar--slar-mot-sparare Euron spricker när dollarn faller  Rolf Englund, Nya Wermlands-Tidningen 8/1 2001 https://www.internetional.se/emurolf.html#sprickerfaller

When you strip away the pieties, the EU is stating that this country must accept the “ratchet clause” and swallow terms - dressed up as level-playing field clauses - that do not exist in normal trade agreements. This mechanism is intended to lock the UK into Europe’s regulatory and governing structure permanently. If the UK rejects what amounts to an ultimatum and exercises its right to trade on WTO terms, Brussels will seek to make this excruciatingly painful rather than trying to reach a neighbourly modus vivendi. Such coercive methods did succeed in snuffing out the Greek Spring of 2015 but that was because Greece had been shut out of the capital markets and had no sovereign lender-of-last-resort as a euro member. The European Central Bank gradually (and illegally) cut off Target2 liquidity for Greek commercial banks until the financial system collapsed. “The gigantic difference is that the ECB cannot shut down Barclays, RBS, Lloyds, and HSBC,” said Yanis Varoufakis, Greece’s forme...

If held to maturity, these provide a return equal to the current real bond yield plus the actual rate of inflation. They are free of default risk, even in the case of hyper inflation, so are good long-term hedges against inflationary Armageddon. During the great inflation shock of the 1970s, global equities and bonds suffered in tandem. Standard US portfolios, holding 60 per cent equities and 40 per cent conventional bonds, produced real returns of minus 1.5 per cent a year during the entire decade.  In the first three years of the inflation shock from 1971-74, investors lost 10.5 per cent a year in real terms in these portfolios. Gavyn Davies FT 13 December 2020 https://www.ft.com/content/b9a4cea5-b491-4f97-8beb-ee8651629247 Spectre of higher inflation threatens historic bond rally “Inflation staying low and well-behaved is the foundation on which everything in markets is currently priced,” said Karen Ward, chief market strategist for Europe at JPMorgan Asset Management. “Investor...

  António Guterres was speaking at a virtual summit on the fifth anniversary of the Paris climate agreement, Over 70 world leaders are due to speak at the meeting organised by the UK, UN and France. UK Prime Minister Boris Johnson said the year was coming to an end with "a certain amount of scientific optimism" because "barely 12 months after the start of the pandemic, we're seeing the vaccine going into the arms of the elderly". He added: "Together we can use scientific advances to protect our entire planet - our biosphere - against a challenge far worse, far more destructive even than the coronavirus.  And by the promethean power of our invention, we can begin to defend the Earth against the disaster of global warming." BBC 12 December 2020 science-environment-55276769

  Solar electricity costs have fallen 80 per cent in 10 years, and even more in favourable locations such as India and the Middle East.  Wind costs are down around 60 per cent, and batteries are 85 per cent cheaper. Adair Turner FT 11 December 2020 https://www.ft.com/content/33bb3714-93cf-4af5-9897-e5bf3b013cb7 The writer chairs the  Energy Transitions Commission Also by Turner https://englundmacro.blogspot.com/2019/04/what-to-do-if-stagnation-threatens-when.html

The reality is that the EU has never been about genuinely free trade: it has always been about the construction of a new state, supposedly to avoid war.  That meant bringing down internal borders and harmonising, while erecting a Zollverein.  The British couldn’t understand this: whereas we saw a liberalising and pro-competition programme, it was actually an attempt at using internal commerce as a vehicle for a political project. To use Hayek’s terminology, the vision was constructivist. Allister Heath Telegraph 9 Decenber 2020 https://www.telegraph.co.uk/news/2020/12/09/time-eu-calamity-britain-disaster-europe/

CNBC 10 Decenber 2020 https://www.cnbc.com/2020/12/10/airbnb-ipo-abnb-starts-trading-on-the-nasdaq.html https://www.marketwatch.com/story/theres-always-a-lot-of-hype-around-ipos-read-this-before-buying-airbnb-stock-2020-12-10 https://www.ft.com/content/cfdab1d0-ee5a-4e4a-a37b-20acfc0628e3

The US cyber security company’s job is to protect its clients from hackers. Alarmingly, the hackers stole the tools used by FireEye’s “red team” which hacks into its clients’ systems to highlight their own vulnerabilities.  FT 10 December 2020 https://www.ft.com/content/0bfbf17e-a668-4f58-a940-cae9a9bec5f4

“We didn’t know then financial markets would remain open,” says one top Elysée official. “We wanted to prevent irreversible consequences from a temporary crisis.”  To get money out the door quickly, the government enlisted the banks to evaluate applications and administer the loans.  Companies of any size or type could ask for loans worth up to three months of sales based on 2019 performance, or based on wage bills for new companies. FT 10 December 2020 https://www.ft.com/content/d1fc4330-8ed4-4f7d-87ff-000d7237a6cf

The rising euro is slow torture for Europe's Covid-battered economy, and the ECB can't stop it. The ECB’s trade-weighted euro index is just shy of its all-time high. It has jumped 7pc this year even though Europe has suffered the greatest economic damage of any region in the world The new twist is the sliding dollar.  The eurozone’s ideology of ‘export-or-die’ and its hair-shirt fiscal regime - Stability Pact, Fiscal Compact, etc - combine to produce a structural current account surplus near 3pc of GDP. This addiction to surpluses is a recipe for a higher currency over time.  Ambrose Telegraph 8 December 2020 https://www.telegraph.co.uk/business/2020/12/09/rising-euro-slow-torture-europes-covid-battered-economy-ecb/

At that time, these ‘large-scale discontinuities’ in the climate system were considered likely only if global warming exceeded 5 °C above pre-industrial levels.  Information summarized in the two most recent IPCC Special Reports (published in 2018 and in September this year)2,3 suggests that tipping points could be exceeded even between 1 and 2 °C of warming (see ‘Too close for comfort’).  https://www.nature.com/articles/d41586-019-03595-0  

Efforts for deposit insurance scheme across single currency area Eurozone finance ministers last week reached a political agreement on a long-awaited reform to the bloc’s bailout fund, the European Stability Mechanism, removing a barrier that has held back work on banking union project.  Detailed work on tackling the nexus between banks and their country’s sovereign debt — a so-called doom loop that has long bedevilled the European banking system.  FT 8 Decenber 2020 https://www.ft.com/content/9a525f9e-2f03-487c-bf4c-1b6574e790e8

– och John Schellnhuber är världens främsta expert på området.  Han är rentav den som myntade uttrycket, i Stockholm för 17 år sedan. Sedan dess har forskningen utvecklats snabbt och nu syns flera tecken på att trösklar är på väg att passeras – eller redan har gjort det. Och i sin senaste forskning på området visar John Schellnhuber på risken att flera av dem kan vara sammankopplade. SvD 8 december 2020 https://www.svd.se/fenomenet-som-kan-skapa-chockvagor Ungefär så har det alltid låtit och sett ut på väderkartan så länge jag kan minnas. Men nu tycker jag väderkartan ser annorlunda ut. Vindarna kommer från nord, och från öst och från sydväst, hur som helst. Englund blogg 12 maj 2010 https://englundmacro.blogspot.com/2010/05/vaderkartan-ar-konstig-inte-som-den-var.html  

The income and wealth inequality that now plague us are, to a great degree, the result of persistently and artificially low interest rates. This goes back long before the Great Financial Crisis.  Here’s the Federal Funds Rate, which the Fed directly controls, since 1955.  You can see rates have been generally falling since the early 1980s.  I think it is not coincidence this is the same period in which wage growth lagged productivity growth, and the gap widened between the wealthiest Americans and the middle class. Rome was not so much conquered by “barbarians” as it committed societal suicide, when the glue that held it together, the cooperation of all factions, simply disappeared. Gary North, (one of my first true historical mentors), in a long and technical 2011 essay, talked about the famous historian Robert Nisbet. John Mauldin 4 December 2020 https://www.mauldineconomics.com/frontlinethoughts/elites-on-the-edge The fundamental problems are a dark triad of social mal...

The EU swatted away modest UK demands for City safeguard clauses. It then circumvented a British veto. Europe’s leaders  rammed through the compact  outside the EU treaties by “intergovernmental” means.  They subjected the British Prime Minister to a torrent of invective for good measure. David Cameron’s referendum pledge was the consequence. Brussels claimed the compact was vitally needed to bolster monetary union. What it really meant was that Germany and the northern creditor bloc wanted intrusive budgetary surveillance powers to bring southern Europe to heel. Ambrose Evans-Pritchard Telegraph 1 December 2020 https://www.telegraph.co.uk/business/2020/12/01/brexit-will-nothing-compared-europes-culture-debts-wars/ Många har börjat glömma, men efter den stora finanskrisen 2008–2009 stod flera EU-länder på randen till konkurs. Tre institutionella långivare – IMF, ECB och EU-kommissionen – bildade en trojka, som skulle förhandla och övervaka villkoren för gigantiska räddnin...

A ccording to  Olivier Blanchard  and other economists, advanced economies can afford to take on much more debt It is not enough for a government to ensure that it can afford to make its interest payments; it also must show that it and its successors can repay the principal.  Raghuram G. Rajan Project Syndicate 30 November 2020 https://www.project-syndicate.org/commentary/borrowing-and-spending-limits-in-ultra-low-interest-rate-environment-by-raghuram-rajan-2020-11 Raghuram G. Rajan, former governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business and the author, most recently, of  The Third Pillar: How Markets and the State Leave the Community Behind .

More than half of the nearly 1,200 German aircraft shot down were by Hurricanes, but its impact has tended to fade into the background compared to the more graceful Spitfire.  “The Spitfire had mystique about it,” Beaver says.  The Germans would always say they had been shot down by a Spitfire rather than a Hurricane. It was OK to admit you’d been shot down by a Spitfire, but not a Hurricane.” BBC 30 November 2020 20201127-the-forgotten-fighter-plane-which-won-the-battle-of-britain Biggles should certainly have a Home Page https://internetional.se/Biggles.html

Edmund Fawcett, a former editor and correspondent at the Economist, grappled with one end of this polarity in “Liberalism: The Life of an Idea,” published in 2014 and revised four years later.  He now explores its opposing force in “Conservatism: The Fight for a Tradition.”  A self-described left-wing liberal, Mr. Fawcett  calls his explorations “historical essays,” and indeed they are written in a reflective mode, though at times in an impassioned style.  Members of both thought-categories will find much to learn from both books. WSJ 4 December 2020 https://www.wsj.com/articles/conservatism-and-liberalism-two-books-on-the-great-divide-11607099696  

Visst kunde Myrdal ibland skriva lysande och Wollter var en fantastisk och folkkär skådespelare, men som välkänd företrädare för Kommunistiska partiet var Wollter ”lika stark i det politiska arbetet”, som partiets ordförande uttrycker saken i tidningen Fokus minnesord. Ändå bagatelliseras Myrdals och Wollters livslånga tro på proletariatets diktatur. Att jag hade  goda avsikter ursäktar inte min dumhet. Men efter tiden i Jan Myrdals sekt har jag svårt att stå ut med en överslätande inställning till kommunism och andra totalitära ideologier, och det är jag glad för. Annika Ström Melin 3 december 2020 https://www.dn.se/ledare/annika-strom-melin-jag-var-med-i-jan-myrdals-sekt-och-har-nagot-att-lara-er-som-riskerar-att-gora/ Annika Ström Melin http://www.nejtillemu.com/melinmening.htm

Från Turin, som tidigare var centrum för en dynamisk industri (genom Fiat) rapporteras om snabbt växande armod. Från södra Italien, som Kalabrien, rapporteras att sjukvårdssystemet fullständigt håller på att braka samman. Riktmärke för statsskulden på 60 procent av BNP som satts i Maastricht-fördraget.  Nu har statsskulden vuxit till ungefär 160 procent av BNP D et är närmast otänkbart att föreställa sig att ett stort grundarland som Italien skulle falla ur gemenskapen. Italien utanför Europa framstår som en politisk omöjlighet. Det var ju därför som Helmut Kohl en gång i tiden motvilligt accepterade en italiensk anslutning till den gemensamma valutan trots att landet egentligen inte klarade inträdeskraven. Rolf Gustavsson SvD 5 december 2020 https://www.svd.se/djup-oro-for-att-italien-inte-tar-sig-ur-krisen

Funds that buy US Treasury Inflation-Protected Securities — known as Tips — recorded $1.8bn of inflows in the week ending Wednesday,  the largest amount since June and the ninth consecutive week the funds have been allotted new money from clients FT 4 December 2020 https://www.ft.com/content/659eda55-4ac2-4c6a-b500-2edddc258d04

https://www.svd.se/kejsaren-som-fick-se-sin-varld-falla-samman

played a significant part in furthering European integration, notably by fostering the idea of the European Exchange Rate Mechanism and, later, by campaigning for French acceptance in a referendum of the 1992 Maastricht treaty that led to the creation of the euro.  Yet the EU’s subsequent draft constitution, produced by a convention that he chaired, was voted down by his fellow French citizens and by the Dutch before its reforms finally found a home in the Lisbon treaty of 2009.  The referendum defeats in 2005 shook the entire Union and exposed the gap between the people and the Brussels elite. FT 3 December 2020 https://www.ft.com/content/b44c1c23-79cf-45fb-af88-e1724ed47d7c The EU's new treaty is the same as the rejected constitution - only the format has been changed to avoid referendums, says Valery Giscard d'Estaing, architect of the constitution. in Le Monde and a few other European newspapers EU Observer 29.10.2007 http://www.nejtillemu.com/giscard.htm EUs grundlag - T...

The Bloomberg dollar index, which includes both emerging and developed markets, is at a 30-month low.  If it dips much further, it will take out the low set in 2018.  The next level to be tested would be the trough of 2014, before the currency began a sharp appreciation as the oil price plummeted John Authers Bloomberg 2 december 2020 https://www.bloomberg.com/opinion/articles/2020-12-02/believe-in-global-reflation-the-dollar-does

The ageing and shrinking of the population in so many parts of the world is a striking and new phenomenon in human history. Take Italy nearly a third of its population is over 60 Charles Goodhart and Manoj Pradhan in The Great Demographic Reversal FT 2 December 2020 https://www.ft.com/content/fcbccad8-491e-4f5b-a859-6622bc368e5c

The low level of interest rates indicates that equities may not be overvalued after all MarketWatch 1 December 2020 https://www.marketwatch.com/story/sky-high-stock-prices-make-sense-robert-shiller-says-11606838599?mod=home-page https://www.marketwatch.com/story/stock-market-values-reached-levels-seen-on-the-eve-of-1929-crash-by-one-measure-11606921130

The IMF and the Nobel fraternity are more worried that the global economy will slip into a protracted slump as defaults increase and long economic Covid does its worst.  If so, there will be pressure on central banks to tear up the rule book and opt for helicopter money or something akin to Modern Monetary Theory (MMT), in which case debate on the technicalities of today’s QE becomes irrelevant. Ben Bernanke is calling for a “coordination mechanism” between the Fed and Congress, pointing the way to joined-up fiscal and monetary policy.  He has suggested the nuclear option of helicopter money to fund the federal deficit and inject money into the veins of the economy. Central bank independence as we knew it has become a shibboleth.  Lord Adair Turner from the Institute for New Economic Thinking proposes a fiscal twin to the Monetary Policy Committee that could calibrate the dosage of monetisation in order to prevent electoral prime-pumping by politicians. It woul...