Readers Question: What should the government do to improve the American standard of living? How could the President + Congress, make the biggest difference to improving American standards of living in the long run? These are a few policies which I feel would improve US living standards. 1. Reduce Unemployment. The rise in US unemployment …
Recently, I posted about the current fall in M4 lending in the UK. The concern is that fears over possible future inflation are preventing decisive action to promote economic recovery. But, these fears are misplaced. The fall in M4 lending in the UK is a sign of a fundamental weakness in demand. Given this weakness, …
Readers Question: How are we tied up with the European Union in respect to the national debt? In short, the EU has little direct impact on UK national debt. If we were in the Eurozone, our bond yields and debt situation would be very different. But, being outside the Eurozone means the UK debt is …
Readers Question:… So, basically we have the FED using it’s money to liquidate the fund’s of other people, and those other people are lending, or a portion of them are lending, the fund’s that they now have because of the FED. Wouldn’t it make more sense for the FED to, instead of purchasing bonds so …
What are the Global Imbalances? US ran a large and persistent current account deficit (imports higher than exports) of up to 6.5% of GDP in 2006 Diagram of Current Account Surplus / Deficit in US and rest of world source: (1) 2. China ran a large current account surplus, accumulated foreign reserves, kept Yuan undervalued …
Readers Question: Do the US have to depend on others to buy their bonds? The US doesn’t have to rely on other countries to buy their bonds. If there is sufficient domestic demand for buying US bonds, there is no need to rely on foreign investors. However, at the moment, about 30% of US bonds …
Readers Question: What on Earth is the point of the Eurozone borrowing money from China when the ECB can print any amount of money it wants any time? Of course the effect of the ECB printing money donating it to indebted Euro countries and/or the banks holding those countries’ bonds is likely to be inflationary …
Fiscal union involves individual countries sharing the same common budget. It means spending and tax levels would be taken by a central fiscal authority. Fiscal union also means debt would be financed by a common bond rather than individual countries. Fiscal union is proposed as a step for further European integration. It would mean a …