Links 17 April 2013

ScreenHunter_01 Apr. 02 06.19

Global Macro/Markets:

  • Response to the Kouk’s claim that gold is a novelty; a useless bubble – Bullion Baron
  • How the violent gold collapse may pose a systemic risk to the financial system – Quartz
  • Serious flaws in Reinhart-Rogoff’s public debt-to-GDP analysis – Rorty Bomb

North America:


  • EU votes against carbon market fix – Financial Times
  • British labour market: bad & getting worse – Bill Mitchell
  • Are Germans really poorer than Spaniards, Italians and Greeks? – VOX
  • Germany ‘too weak to withstand more stimulus’, says Angela Merkel – The Telegraph
  • Protecting the eurozone at all costs is undermining IMF’s validity – The Telegraph
  • Britain’s real minimum wage has fallen over the past 5 years – The Economist


  • Soros likens China trusts to subprime – Finance Asia
  • China approves Glencore and Xstrata deal – Financial Times
  • China’s Pettis moment – FT Alphaville
  • China’s Growth Slows in 1Q: Only the Beginning? – The Diplomat
  • Moody’s lowers China outlook after Fitch downgrade – Reuters
  • Wage and Price Dynamics in a Large Emerging Economy: The Case of China – The Big Picture
  • South Korea Unveils Fiscal Package to Support Growth: Economy – Bloomberg
  • China Regulator Bans Lenders From Creating New LGFV Loans – Caijing
  • Why China won’t mind slower growth (but others will) – Financial Times


  • Flip-flop: Why the RBA is likely to cut interest rates in May – The Kouk
  • IMF: Australian growth to be 3% in 2013 – Business Spectator
  • Australia must wean itself from China – Bloomberg
  • Garnaut warns RBA may have to cap dollar – The Age


  • “Rethinking Macro Policy II: First Steps and Early Lessons” – Econbrowser


    • Yeah, but look at the estimated results.

      “With an audacious and admittedly politically complex stretch target of expunging the underperforming 50% of Australians, the country would become the Switzerland of the South. Our tax rate could drop to 13%, we’d evolve into the regional financial centre successive Governments have aspired to become and there would be no need for any tax on superannuation whatsoever.”

      • Brissy for now

        The Dead Kennedy’s 1980 album – “Fresh fruit for rotting vegetables”-first song was “Kill the poor”. Their neutron bomb tribute sang of “jobless millions whisked away” and “no more welfare tax to pay”. My favourite track though was “Let’s lynch the landlord”!

    • IMO printing aussie dollars for those who want to buy them, to lower the dollar, is preferred to lowering interest rates.It would push up the price of exports to slow down spending, help out aussie export businesses,discourage taking out cheaper loans and to deal with inflation at this point would be smarter then letting the debt horse run again.

      • Michael I sympathise with your intent however the ONLY way to fix this is to stop spending more than we earn.
        So you’re right that lowering interest rates work in exactly the opposite way to that in which we ought go.
        As to printing dollars while still running an out of control capital account seems like a recipe for disaster. We can’t quarantine the dollars we print and we’d just be providing free dollars for more foreign ownership at cheaper prices.
        I realise there are feedback loops at work but i think that is essentially what would happen in the current environment.
        The US works, short term, because the investment back in the US is by way of Treasuries. Some of the investment here MIGHT be in Govt bonds but one would imagine much of it would be spent buying up our resources.
        We have to raise interest rates, get some control on our capital account, and be willing to suffer a major decline in living standards and quite massive dislocation.
        The alternative is increasing debt and continuing to live off the future welfare of our kids