We just saw this post from Pragmatic Capitalism’s Cullen Roche on the supply of assets.
It offers a nice chart showing net issuance of “safe” assets, from Citi’s research team:
According to George Magnus of UBS, most of the western world has now been struck down by “most unusual monetary policies” or ‘Mumps’ for short. And — contrary to popular belief — the disease is being underpinned not by western profligacy but possibly the very phenomenon. Too much thrift. The want and need for too many savings in an economy that demands spending on available capacity and goods today — a theme also actively being explored by Paul Krugman as part of his anti-austerity reasoning. Read more
An ever larger number of voices (FT Alphaville included) are exploring alternative theories to explain our current crisis, many of which focus on the role of technology, productivity and sustainability.
Some wise words from John Kemp at Reuters on Tuesday, now contemplating the side-effects of the bubble in fear:
It is the importance of non-rational motivations that explains why Keynes placed so much emphasis on “animal spirits” or the state of investors’ and entrepreneurs’ expectations. By sapping that willingness to shoulder a degree of incalculable uncertainty, the bubble in fear destroys the vital process by which economies form capital, grow and generate employment. Read more
From HSBC’s Global Macro Economics team on Thursday:
Matters are being made worse because the world’s savers would rather buy Treasuries than global goods. Read more
Robert and Edward Skidelsky, emeritus professor of political economy at the University of Warwick and lecturer on moral and political philosophy at the University of Exeter respectively, have penned what FT Alphaville feels is a must read essay on the impact of abundance and post-scarcity dynamics on price stability and the nature of labour, and work itself.
This is the third installment in FT Alphaville’s “Beyond Scarcity” series, a somewhat radical look at the impact of technological progress and efficiency on the volume of goods and services being produced by the system, asking whether “abundance” could now be a key determinant of deflationary forces in the western world.
On top of this, we have considered the role played by “artificial scarcity”, whether imposed wittingly or unwittingly by industry participants as a counterweight to such deflation, and to what degree such measures could now be running into scalability issues. In short, whether there is a limit to how much artificial scarcity private organisations can impose to counteract deflationary forces of abundance, without experiencing diminishing returns. Read more
With so much doom and gloom about, we’d like to take you on a trip through the looking glass to a world where the future is bright, not bleak. Optimistic, not pessimistic. Hopeful, not dismal.
And we mean that in the context of today’s data. Not in some parallel-universe that doesn’t exist. Read more
Presenting an economic journey in felt, looking at whether the system’s ails have more to do with an abundance of goods than a shortage of credit because of the system’s technological advances and efficiencies. Move ahead to slide 20 for a snapshot of where we *think* we are today.
1) The water source. Read more