Mike Norman Economics

Spending flows have slowed considerably. A correction is coming. 

While the details of the post are specific to Australia, the MMT point is general, namely, that raising the price of "money" by increasing the interest rate adds an increased inflationary bias to already increasing inflation as the price increase of "money" is passed on to goods and services owing to increased costs and also monopoly power.The thinking behind this is apparently that increasing the price of "money" makes not only goods and services more costly but also the cost of borrowing...

In a recent meeting in Cape Town, South Africa, the foreign ministers of the BRICS countries, along with representatives from more than twelve nations, emphasized their intention to establish an international trading currency.Sounds more like an international payments system rather than a currency for public use. Some details are given but so far it is nebulous other than the joint commitment to do it.Covert GeopoliticsRussia Confirms BRICS Will Create A Gold-Backed Currency

Fiscal flows may already be slowing. That will trigger a market correction. 

China is traditionally "a nation of savers." This tradition needs to be reversed to achieve a "dual-circulation" economy, that is, a balance between domestic consumption and exports more in line with developed economies. Until now, China's growth has been export-driven. This makes China dependent on external markets; hence, liable to sanctions and protectionism. It also sets China up for being caught in the middle-income trap. The Chinese leadership is aware of both challenges and the...

Alex Douglas just published a post on arches and money which I quite liked. It is an easy read, and I will just offer my spin on one of his points. It also leaks into a discussion of engineering, which I will digress into at the end of this post.Bond Economics Alex Douglas On Arches And MoneyBrian Romanchuk

Framing tricks and controlling the narrative are the base tools of neoliberal economics. One character that pops up regularly is the Fickle, Flighty Foreigner. Worthy of a Shakespearean tragedy, they will brutally condemn any country that deviates from the divine path.Let’s explain the narrative trick and how to counter it.New WaylandSophistry or Shibboleth? - "Capital Flight"NeilW

Contrary to what we were taught in the graduate schools of half-a-century ago (the heyday of monetarism), monetary policy now typically means setting or influencing the interest rate that commercial banks pay on loans of central bank base money in the overnight market — the policy rate. What I mean by the ‘real’ policy rate is the nominal policy rate (the actual percentage rate quoted) less the currently observed rate of inflation. Such a zero real policy rate (ZRPR) will achieve as close an...

Another figure of speech just what we needed…. anyway the change in this US price index just hit a new 52 week low…BOE is 7 points below this increase in the UK… the Fed would have to be at  -5% …S&P would probably be somewhere over 10,000 ….Instead Brandon has his Fed 3 points above and the psychos are threatening EVEN MORE … 🤔Today's CPI Data by Truflation. 🇺🇸2.11% 🇬🇧11.35% Analysis: https://t.co/FiManHJxUI pic.twitter.com/8jr3r9mnrh— Truflation (@truflation) July 14, 2023...

In response to a report by the UK Office of Budget Responsibility1 UK Journalist Robert Peston tweeted the following opinion:So the obsession of Hunt and Sunak with defeating inflation is understandable - because in the absence of any significant fall in inflation, there is a risk that investors will shun UK government debt and interest rates for the government and for all of us would then rise to crippling levels. This parlous debt backdrop explains why the Bank of England and the Treasury...