Category Archives: Economic fundamentals

Syriza Commits to Deep Austerity in Its Proposal to Creditors

Greece has already offered to continue with a program of significant austerity. No wonder the creditors are close to agreeing to that part of the government’s proposal.

Tsipras Fighting Two Front War as Revolt Within Syriza Intensifies, Forcing IMF Payment Delay, Cancellation of Negotiating Session

As Tsipras’ options narrow thanks to the revolt in his party, it is also becoming harder for even Merkel to forestall a default.

The Economics of Parallel Currencies

As Greece’s cash crunch continues and its negotiations are moving slowing and tending towards an impasse, it becomes more and more likely that the beleaguered borrower will issue some sort of scrip in order to fund operations while remaining in the Eurozone. How and how well might that work?

Wall Street Journal Questions Fed Beige Book “Rosy” Take on “Recovery”

Is the august Wall Street Journal hinting that the “recovery” has no clothes?

Satyajit Das: My Big Fat Greek Crisis

Yves here. Das published this post in February and I thought it would be useful to reprise it for three reasons. First, it has held up well to the passage of time. Second, for latecomers to the Greek saga, it summarizes the background, the stances of the parties, and key economic and financial considerations. Third, the section starting “Controlled Warfare” (about 2/3 of the way through the post) summarizes the consequences to the lenders of a Grexit. Those risks are why almost no one thought we’d wind up where we are now, with two sides issuing ultimatums a mere two days before a possible Greek default, and why most of the financial media still believes a deal will get done.

“The Notion of the Competitiveness of Countries is Nonsense”

A 2004 book by Martin Wolf provided the intellectual foundation for the competitiveness fad. Ironically, Wolf debunked his own thesis in it.

Greece’s Shortening Negotiating Runway and Possibly Erroneous Assumptions

Le Monde published a defiant op ed by Alex Tsipras over the weekend. The wee problem is that Greece is well past the point where political appeals will work.

Wolf Richter: When Betting on QE Suddenly Goes Wrong

Central banks think they’re omnipotent – until they aren’t.

Michael Hudson: Ukraine’s “Operation Vulture” and Labor Protests

Hudson’s so-called “Operation Vulture,” the strip-mining of what little is left of a functioning economy in Ukraine, comes straight out of the neoliberal playbook.

The Fed’s Dereliction of Duty and False Capital Flows Morality

The Fed disavows responsibility for the way US interest rate policy sends money sloshing around the world. It’s a huge mistake intellectually and politically.

A Parallel Currency for Greece: Part II

Yves here. I’m quite interested in reader reactions to this scheme. My big reservation is that the amount of the scrip devised by the authors, the TCC, has to be limited to the an amount of discount of future tax payments that is deemed to be credible. Given that Bill Mitchell has estimated that Greece […]