On Opaque Transparency
There are two things that I want to comment on Fed policy this evening: Transparency is overrated, and Bernanke does not understand savings. Transparency is Overrated Ever heard of the phrase “data overload?” Greenspan would do that verbally in his testimony to Congress, providing them with more data than they needed, and occasionally contradictory so...
Recent Tweets
@The_Analyst does Hempton do Twitter? Bright guy. Jan 26, 2012 RE: @SoberLook It’s not a pledge, indeed, but it is an estimate. The bond market has reacted quite strongly to the e… http://t.co/crpU3QpH Jan 26, 2012 RE: @SoberLook Does this post from Alea change your opinion at all? http://t.co/2hs1LTyN… http://t.co/p3Plmjnb Jan 26, 2012 MF Customers...
Redacted Version of the January 2012 FOMC Statement
December 2011 January 2012 Comments Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global...
Stock Prices versus Implied Inflation
Eddy Elfenbein wrote a good post recently on the stock market versus inflation expectations. When I read it, I said to myself, “Wait, is the relationship between nominal and real rates really 1:1, or is it more complex?” Though it is not certain, the regressions that I ran indicated that 1:1 was not falsified by...
Musing Over Glass-Stegall
This is one area where I would like feedback from my readers. My view is that the repeal of Glass-Stegall had little impact on the crisis. Most of the crisis occurred as a result of ordinary failures in investment banking, and commercial banking, with little change from combining them. I would argue that the overall...
Peak Credit
What I write here will not be rigorous. We’ve heard about “peak oil.” We’ve heard about other resources, and how production will decline over time. But what of credit? It isn’t that hard to create, but it is hard to create well, particularly when debt levels are high, as in this environment. It’s not just...
Redacted Version of the December 2011 FOMC Statement
November 2011 December 2011 Comments Information received since the Federal Open Market Committee met in September indicates that economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year. Information received since the Federal Open Market Committee met in November...
The Gold Medal Gold Model
Eddy Elfenbein is a clever guy; he put together a model of gold prices that fits the data very well. Tonight, I will share my own variation on the model, and try to give an intuitive explanation of why it works. Ask yourself this: where does investor put his money if he wants to stay...
At the Cato Institute’s 29th Annual Monetary Conference (Epilogue)
I wrote about the thoughts of others Wednesday as I took notes on their talks. I don’t type that fast, so my notes gives synopses of the talks given. Now for my own thoughts. I have a sympathy for anyone that wants to take monetary policy out of the hands of the government, because they...
At the Cato Institute’s 29th Annual Monetary Conference (VII)
CLOSING ADDRESS John A. Allison Former Chairman and CEO, BB&T, and Distinguished Professor of Practice, Wake Forest University Problems primarily caused by government policy, loose Fed policy, GSE policies. Fed jobs: payment systems, bank regulator and monetary policy Payment system monopoly benefits inefficient small banks. Regulation: FDIC insurance destroys market discipline. Financing using FDIC-insured deposits...
At the Cato Institute’s 29th Annual Monetary Conference (VI)
PANEL 4: A PROGRAM FOR MONETARY FREEDOM Moderator: Alan Reynolds Senior Fellow, Cato Institute Stimulus: money away from productive uses and toward the goverment and other unproductive bits of malinvestment like autos and homes. James Grant Editor, Grant’s Interest Rate Observer The cumulative effect of history Problem in banking not a shortage of capital, but...
At the Cato Institute’s 29th Annual Monetary Conference (V)
PANEL 3: TRANSITION TO A NEW MONETARY REGIME Moderator: Steve H. Hanke Professor of Economics, Johns Hopkins University DM: Steve Hanke was a professor of mine when I went to Hopkins. Targeting NGDP — Cato Institute — 2003 — Nominal Gross Domestic purchases or final sales Richard H. Timberlake Emeritus Professor of Economics, University...
