I think this is an older video dating back to 2011 pre-US downgrade. PIMCO'S El-Erian via Zerohedge. Structural unemployment, central bank creating systemic risk, the Eurozone market design issues and execution.Financial repression, deflation. you have heard it all here before. He is more optimisitc then i am aboout China's ability to manage its economy.
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Zerohedge.
" This rise in poverty is consistent with relative declines in job opportunities for less-skilled workers. California’s relatively high economic growth combined with its relatively low job growth may have disadvantaged less-skilled workers, highlighting a key challenge facing policymakers. That is, the greater economic efficiency that helps spur economic growth sometimes comes at the cost of social equity." Very timely given the sell off in gold and other commodities today (China disappointed- SURPRISE! :)).
Here is an excerpt: "With respect to QE, the evidence indicates that quantitative easing is not rocket fuel – at best, it is a bungee cord; reasonably effective in helping confidence and risk premiums normalize when they have spiked in response to fear over the prior 6-months, and capable of releasing just enough pent-up demand to kick a can, but with little durable economic effect once short-term interest rates have hit the zero bound (which was nearly $2 trillion ago). We’re really left with are arguments that hinge on superstition – effectively arguments that “the Fed can do this forever, and it’s not going to stop.” There's no problem with claiming that QE outweighs all other considerations, in the same way that we've found that extreme overvalued, overbought, overbullish conditions often outweigh trend-following onsiderations. Just make sure that this faith in QE is justified. I don't believe it is. My impression is that this is the claim; that quantitative easing, in and of itself, is a lucky rabbit’s foot, and that it changes everything, by mechanisms that investors need not understand, and makes all historical evidence and analysis irrelevant; that despite the historically tight and economically tractable relationship between corporate surpluses and the combined deficits of government and households**, somehow this time is different, and profit margins will remain elevated forever. I doubt that any of this will prove to be correct, but as John Kenneth Galbraith wrote in 1954 about the Great Crash, “the time had come, as in all periods of speculation, when men sought not to be persuaded by the reality of things but to find excuses for escaping into the new world of fantasy.” That what I said. "I see the incessant focus on the power of the central bank to manage an economy as being misguided and inappropriate. The world reached a financial crisis principally because of a lack of proper regulation and enforcement of the financial services industry. In addtion to this, the Eurozone reached their crisis because they gave up their currencies, and the global trade system shifted production to Germany for high valued manufacturing and China for low valued manufacturing. Regardless of the price level, these economies are not going to generate jobs for their unemployed. Many academics and market participants who view religion as nothing more than superstition, seem to have elevated the central banks to Christ-like status. If we want to eat bread and wine, we need to start growing some wheat and grapes and stop asking the central bank to 'make do' with the water and loaf we left in the toilet." I referenced it before, now hear it straight from Kyle's Mouth.
Huffington Post. I agreee with Sachs.
"So, to summarize, what is crude Keynesianism? (1) The belief in large, stable, and predictable multipliers on taxes and transfers; (2) The belief that our problems are due overwhelmingly to a deficiency of aggregate demand, rather than to structural problems that need a long-term approach; (3) The belief that a rapidly rising debt-GDP ratio is largely benign because interest rates are low today and will stay so indefinitely; (4) The belief that "to a large effect, spending is spending," thereby catering to waste and vested interests while ignoring America's urgent investment needs. That subtler set of policies should include: (1) Decade-long public investment programs in renewable energy, upgraded public infrastructure, fast rail, job training and the like; (2) Adequate fiscal revenues (including tolls on infrastructure) to pay for these investments over the course of a decade, including a downward path of the debt-GDP ratio; (3) Increased revenues through taxation on high net worth, financial transactions, high incomes, capital gains and carried interest, offshore corporate earnings, and carbon emissions, and a stiff crackdown on tax havens and phony transfer pricing" Population Manufacturing (Income inequality-globalization-trade--structural unemployment nexus)
CBC. The bank moves to stem a public relations nightmare. I guess it is too much to expect the governrment to demand at least one RBC exec fall on his sword for breaking Canadian labour laws. How about a fine?
Zerohedge. Things that can't go on for ever must stop.
Wealth Inequaility is much worse than Americans think according to a Harvard study. Intergenerational mobility appears to be shot as well. Video mixes income versus wealth at one point but conveys a message very powerfully.
The Atlantic. Sounds like good advice.
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