Coffee Links 3-12-2012

Posted from Diigo. The rest of my favorite links are here.

Comments
  • vincecate March 12, 2012 at 6:24 am

    “Using the Yuan for oil trading. Swweeeet. h/t MMT Trader”

    One reason people hold dollars or Treasuries is that they have a contract to buy oil in dollars at a future date. So trading oil in dollars increases the demand for dollars. If people stop trading oil in dollars the demand for dollars will go down. If the demand for dollars goes down the value will go down. Why is this “Swweeeet”?

  • wh10 March 12, 2012 at 7:17 am

    Yeah Mike – I’d appreciate your thoughts on the the shift away from the USD and what it means for it to lose its reserve currency status.

    • Cullen Roche March 12, 2012 at 10:45 am

      I’ve always viewed reserve status as a sign of economic prowess and little else. Think of it in terms of production (there’s that central piece again). The main reason why there is demand for USD’s is because there’s huge demand for US goods and services. A Saudi oil producer is comfortable hoarding dollars because he knows it’s a good currency anywhere. And why is it a good currency anywhere? Because we produce 25% of all world output leading to huge demand from all parts of the globe. This doesn’t mean our reserve status is guaranteed to last and I think the CAD is in large part a sign of the loss in competitive edge (and not just demand as MMT claims), but as long as we’re the 800 pound gorilla then it is what it is….

  • wh10 March 12, 2012 at 7:31 am

    Mike, I am also unclear on this concept of ‘demand for safe assets’ as discussed in the articles you’ve linked to here and in the other coffee post. Is this really what Godley or MMT or MMR are saying?

    I thought it is more the point that there is a shortage of aggregate demand, which could be alleviated by injections of NFA. But why does that mean there is a heightened ‘demand for safe assets?’ (What does that even mean?) It seems fishy because 1) the interest rates on govt bonds are (primarily) Fed determined (but the articles imply interest rates are low because of the ‘demand for safe assets’) and 2) there will always be sufficient demand for US govt bonds to be sold in line with Fed policy, absent debt ceilings, hyperinflation, and silly things like that.

  • Economic Maverick March 12, 2012 at 10:52 am

    Thanks for the ecat update! Is this for real?

    • Michael Sankowski March 12, 2012 at 12:25 pm

      I think this is for real. It’s by PHD’s at a real university U of Illinois. I am not a physics guy any more but can read some of the papers ok still. You can see the excitement dripping off the pages. They are getting over-unity energy out of these systems. Its a low temperature nuclear reaction.

      This is an absolute game changer. huge huge huge

  • vimothy March 12, 2012 at 11:42 am

    Mike you should read some of the New Monetarist literature!

    • Michael Sankowski March 12, 2012 at 12:27 pm

      Can you post some papers here you think would be particularly good? I’ll include them in the daily links and read them too. Just send them to me and I’ll post them.

      So little time, so much to do!

  • Cullen Roche March 12, 2012 at 12:29 pm

    The videos are coming back. Kahn on 60 Minutes inspired me to redo them all and make them even better. In fact, I’ve already got my new writing tablet on the way here! We’re gonna make this stuff super simple to understand. Stay tuned people!

    • wh10 March 12, 2012 at 4:51 pm

      Regarding your recent tweet on Kahn’s econ videos- YES, some MAJOR tweaking needed :). It’d be cool if you could establish dialogue with him….