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By Thornton (Tip) Parker Most MMT advocates probably took months to get comfortable with it.  But like a personal computer, one need not understand its innards to use its power.  The great power of MMT is its lesson that the federal government can create new dollars by running deficits to do things that should be done.  But the lesson is counterintuitive and will be rejected by voters unless it can be explained convincingly in a few minutes.  This paper offers five nuggets for explaining it...

This is being spun as a positive, when all I see is a chart showing the seasonally adjusted annual rate of sales peaked several months ago and is going down: U.S. Light Vehicle Sales at 17.46 million annual rate in January Based on an estimate from WardsAuto, light vehicle sales were at a 17.46 million SAAR in January.That is up about 5% from January 2015, and up about 1.4% from the 17.2 million annual sales rate last month.This graph shows the historical light vehicle sales from the BEA...

January 27th, 2016 On Thursday 21st January, Ann Pettifor appeared on Al Jazeera, along with Vicky Pryce, chief economic adviser at The Centre for Economic and Business Research, and Anastasia Nesvetailova, director of the City Political Economy Research Centre at City University in London. Presenter Nick Clark asked them to discuss why the global economic system lurches from one financial crisis to another, and whether another crisis is imminent. Watch the full discussion here. 

When the growth rate was even modestly increasing it made the news. Now that it’s decelerating not a word…

Possible bottom and now moving higher:This month’s negative reading doesn’t look so bad because the revised last month’s down so much…;) Philadelphia Fed Business Outlook SurveyHighlightsThe factory sector continues to slow this month though, in good news, the rate of contraction is flattening out. The Philly Fed’s general business conditions index for January is minus 3.5, a little better than the Econoday consensus for minus 4.0 and the best reading since all the back in August. The new...

January 14th, 2016 Figure 1 source: @SoberLook @SoberLook yesterday shared this chart of collapsing UK inflation expectations from Barclays Research UK, heightening fears of a deflationary spiral. As noted in an earlier blog, the year 2015 began with the Chancellor, George Osborne ‘welcoming’ the news that inflation had fallen in December to 0.5% – more than 1% below the official target. The FT declared that “this is almost certainly “good deflation”.   Jittery stock markets are now...

This time the warm weather is cited for the weakness as utility spending fell. Yes, capitalism is about sales, and unspent income reduces sales, unless other agents spend more than their income, etc. etc. And with the private sector in general necessarily pro cyclical, unspent income stories beg fiscal adjustments, which at the moment are universally out of style. U.K. Industrial Output Plunges Most in Almost Three Years By Jill WardJan 12 (Bloomberg) — UK industrial production fell the...

A bit of growth in the EU supported by the low euro from the CB euro selling and consequent trade/current account surplus. However, without ECB euro selling the fundamentals will inevitably firm the euro until that growth component ceases. But meanwhile, watch for signs of ECB hawkishness: Ever so slowly, the euro zone economy awakes By Jeremy GauntJan 10 (Reuters) — Economic growth was running at an annual rate of 1.6 percent in the third quarter, roughly twice the average annual growth...

The Saudis post prices and let their clients buy all they want at the posted prices. So their policy has been to discount the price of their oil vs benchmarks until their sales increase to meet their production capacity, which is reportedly 12 million bpd. That means the price goes low enough to cause other suppliers to cut back, such as US shale producers, which translates into higher Saudi sales and output. Or demand has to increase. Seems they haven’t made much progress so far, as the...

Way below consensus and way bad: Chicago PMIThe Chicago Business Barometer contracted at the fastest pace since July 2009, falling 5.8 points to 42.9 in December from 48.7 in NovemberThere was also ongoing weakness in New Orders, which contracted at a faster pace, to the lowest level since May 2009. The fall in Production was more moderate but still put it back into contraction for the sixth time this year. The Employment component, which had recovered in recent months, dropped back below...