Roberto Abraham Scaruffi

Articles posted on Saturday, 28 June 2014 Front Page  Analysis Blog   Investing Blog   News Blog    Opinion Blog   Current Markets  Economic News: Asia/Pacific  Europe  Middle East/Africa  Americas  USA Government

Modern Money Theory: The Basics by L. Randall Wray, New Economic Perspectives Modern Money Theory (MMT) seems to confuse two groups of otherwise sympathetic economists. First there are those like Paul Krugman who are generally of the Keynesian persuasion and who like MMT's 'deficit owl' approach. I think Krugman would really like to stop worrying about the deficit so that he could advocate an 'as much as it takes' approach to government spending. The problem is that he just cannot quite get a handle on the monetary operations that are required. Won't government run out? What, is government going to create money 'out of thin air?' Where will all the money come from? Read more >> Disregard Fundamentals In The Short Term by Poly, Zentrader In a runaway market like we have at present, it's pointless to get into fundamentals to support the level of the market. The driving force behind a move of this nature is speculation - participants' collectively bidding the market higher without regard to the move's sustainability. The mere discussion of fundamentals, especially efforts to correlate them to the current market, is a sign of a failure to understand the character of the market. It's like a game of "pass the parcel"; at some point the music will stop and those holding the bag will pay. Read more >> Recycled Glass Is Not Just Green It Also Pays Off In the EU seven out of 10 bottles are recycled. Yet the process is far from easy. First the bottles must be sorted. The plant in Anvers in Belgium treats around 250 000 tonnes of glass each year. A Word from This Newsletter's Sponsor Americas most important day of 2014? On Tuesday July 1st, 2014, a new law (part of HR Bill #2847) goes into effect in America. On the surface, it looks like just another tax law - but it actually has huge implications far beyond the tax code. This law actually changes our entire financial system... overnight. Even the normally liberal Atlantic Monthly magazine said it "seems to be turning into a nightmare and disaster." Yet 99% of Americans have no idea what is about to happen. Make sure you get the facts and protect yourself. Details here... Weekend Market Commentary: Special Edition Written by Gary Weekend Market Commentary For 06-28-2014 UPDATED: 0910 EST 2014-06-28 Inflation is the talk around financial circles lately and most think they have it right. Some claim that the Middle East is going to have oil production issues driving up consumer prices and ultimately inflation. Others say that US inflation pressures will accelerate if/when velocity of M2 money picks up. My feeling is that inflation will not be an important issue for the 2014 business cycle, but it will be an important talking point for many who have nothing in it except to stir the pot and upset the 'Sheeples'. Read more >> What We Read Today 28 June 2014 Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included. That Big Study About How the Student Debt Nightmare Is in Your Head? It's Garbage (Choire Sicha, The Awl) This is a much more complete critique of a report that we criticized 'behind the wall' two days ago (26 July). Our previous discussion is repeated below. This critique looked at the data selection criteria of the study and found that it was constructed so that only student debt of the wealthy was included, a sample of 1,711 households and then only included approximately 1,200 that were current on their student loan payments. This appears to be an even more egregious abuse of cherry picking that our previous discussion addressed. This atrocious piece of "research" should be withdrawn. It is an embarrassment to the reputation of the Brookings Institute. Read more >> Let Us Kill the Golden Goose - Exports Written by Steven Hansen I have been entertained this past week by a series of posts on trade - but frightened by unenlightened thoughts expressed by a new Congressional leader. Read more >> Gary Becker's Failure to Understand the Current Crisis by William K. Black, New Economic Perspectives This is the fifth and final installment of my series of articles (links end of article) on Gary Becker, the recipient of the Swedish Central Bank's Prize in Economics in 1992. The prior articles dealt with Becker's work that the central bankers cited in their award decision. This article examines whether Becker, in the context of the worst financial crisis in 70 years, re-examined his views that led to his failed work on the family, women, discrimination, and crime or his colleagues' anti-regulatory views at The University of Chicago that proved so criminogenic. Read more >> Investing.com Weekly Wrap-Up 27 June 2014 U.S. stocks up on Fed outlook, DuPont forecast weighs; Dow rises 0.03% by Investing.com Staff, Investing.com U.S. stocks rose on Friday on market expectations for interest rates to remain low for the foreseeable future, though end-of-quarter profit taking and a DuPont profit revision watered down gains. At the close of U.S. trading, the Dow 30 rose 0.03%, the S&P 500 index rose 0.19%, while the NASDAQ Compositeindex rose 0.43%. The Volatility S&P 500 index, which measures the outlook for market volatility, was down 3.18% at 11.26, but up from 10.26 one week ago. Read more >> Military Drone Crashes Are Climbing from Felix Richter, Statista.com by Niall McCarthy According to research carried out by The Washington Post, more than 400 U.S. military drones have been involved in accidents since 2001.  Read more >> Mexico Takes First Steps to Overhaul Oil Industry from the Dallas Fed The fiscal health of the Mexican government and the living standards of Mexico's citizens are inextricably tied to that of Pemex, making declining crude oil production over the past decade a particularly troubling sign for many in Mexico. Read more >> Renewable Fuels: Issues for 2014 and Beyond by Congressional Budget Office The Renewable Fuel Standard (RFS) establishes minimum volumes of various types of renewable fuels that must be included in the United States' supply of fuel for transportation. Those volumes-as defined by the Energy Independence and Security Act of 2007 (EISA)-are intended to grow each year through 2022 (see the figure below). In recent years, the requirements of the RFS have been met largely by blending gasoline with ethanol made from cornstarch. In the future, EISA requires the use of increasingly large amounts of 'advanced biofuels,' which include diesel made from biomass (such as soybean oil or animal fat), ethanol made from sugarcane, and cellulosic biofuels (made from converting the cellulose in plant materials into fuel). Read more >> The Role of Economic, Fiscal, and Financial Shocks in the Evolution of Public Sector Pension Funding from the Boston Fed New research from the Federal Reserve Bank of Boston challenges the common perception that state and local governments deliberately decreased public pension fund contributions as a backdoor means to run operating deficits from 2001 to 2010, and finds that public pension sponsors actually increased contributions during that time. Read more >> Infographic of the Day: Cats Are People, Too This infographic includes some possibly little-known facts about cats and how they compare to humans, because as all cat owners know: cats are people, too. Read more >>