Ven Oil Prod

It took a while to play through, but our assessment that China would increasingly become the petro-state lender of last resort is starting to come good. The primary reason for that is producer states are rapidly running out of time to present full scale political implosion on the back of chronic economic pressures. For all the…

FX vs M2 under different scnearios

During the reign of the mighty petro-dollar standard, it was necessary for major oil exporters to recycle their dollar holdings back into the dollar-based financial system to maintain their self-imposed exchange rate pegs. US government bonds are the very centrepiece of this elaborate system and it is thus no surprise to see the dollar price…

Draghi Confetti

ECB press conference June 2 2016 Held in Vienna with Governor Nowotny Keep key ECB interest rates unchanged Will be kept at present or lower for an extended period of time, exceeding asset purchase program (80bn per month) which will end March 2017 sector program will start June 8 TLTRO start in June New measures…

Pot GDP vs Actual

In the 1970s economists started to incorporate rational expectations into their models and not long after the seminal Kydand & Prescott (1977) article named Rules Rather than Discretion: The Inconsistency of Optimal Plan was published. Their work has been driving the mainstream macroeconomic debate ever since. The question raised in this debate is how policy-makers…