A heroína financeira

Christine Lagarde: heroína ou metadorna?

Não há meio de entenderem...

Os juros das obrigações europeias estão em queda acentuada, com os investidores a apostarem que Christine Lagarde vai manter a política de estímulos do Banco Central Europeu. A escolha da diretora-geral do FMI para suceder a Draghi está também a impulsionar as bolsas.  

—in Jornal de Negócios, 3/7/209

A malta ainda não percebeu que a destruição das taxas de juro, sendo um recurso para evitar o colapso dos bancos e dos governos, ao prolongar-se no tempo, acaba por funcionar como uma verdadeira heroína financeira, que hipertrofia os Estados, impulsiona a especulação e a corrupção, e arruina os povos—começando, desde logo, por destruir as classes médias. O Prédio Coutinho seria inimaginável em democracias saudáveis. A sua ocorrência revela-nos até que ponto estas já estão ameaçadas pelos novos salteadores e assassinos.

O declínio da prosperidade começou no final da década de 1960, há 50 anos. Uma consequência do fim da fase da aceleração demográfica mundial (por volta de 1964), e do encarecimento real da energia e dos recursos naturais.

Ou seja, é fundamental abandonarmos o maniqueísmo e olhar para a realidade, discernindo a causa das coisas.

Duas leituras recomendáveis:

Clique para ampliar

It's Official: This Is The Longest Economic Expansion On Record

It’s official: as of this moment, the US economic expansion is now the longest on record, entering its 121st month since the end of the 2009 recession (which according to the NBER ended in June of that year), and surpassing the previous 120 month record - the March 1991 - March 2001 expansion - which ended with the bursting of the dot com bubble.

How long will US business cycles be in the future?

With the last four super-long US cycles attributed to globalization, demographics, downward wage pressures, positive global disinflation, fiat money, increased debt/deficits, and QE, then the answer will come from answers as to how sustainable these trends are.

We'll skip demographics and globalization as these are slower-acting, tectonic shifts, and focus on topics that are as salient today as ever - especially with another debt ceiling fight looming in D.C. With regards to debt and deficits, if anything the US has moved into an era of higher structural deficits and higher government debt, according to DB.

[...]

It's worth noting that as the ties to gold were loosened, the economic policy could become more flexible - think more and more debt - allowing the "opportunity" for more stimulus. Deutsche Bank shows this by highlighting the length of each US business cycle but this time with the annual US budget deficit (left) and total Government Debt to GDP (right) overlaid on top. Bottom line: with the US dollar becoming unanchored from gold in the 1970s, it allowed every successive administration to avoid recessions by piling up more debt and spending at an ever faster rate.

[...]

So to conclude, retreating globalization and weakening demographics are more negative for business cycle length going forward. However, while we are still able to run large deficits, accumulate more debt, and conduct more money printing we can still manipulate the length of cycles relative to the past. Maybe inflation is the glue here. Once that starts to structurally increase, business cycle management becomes more challenging.

[...]

As Deutsche Bank concludes, it's an interesting paradox that this cycle has consistently been one of the weakest in terms of economic growth but one of the strongest in terms of asset price growth. It also hints at the extraordinary lengths global authorities have gone to ensure this recovery continued. Liquidity and intervention have been enormous and this has flowed into assets, not the economy.

So as we celebrate the longest US expansion in history and the fourth ultra long cycle in a row, the only question worth pondering is what the costs of what as of July 1 will be the longest cycle in history, will end up being?

—in Zero Hedge, by Tyler Durden, Mon, 07/01/2019 - 06:33
“It’s Official: This Is The Longest Economic Expansion On Record”

Clique para aumentar

O fim da prosperidade petrolífera

What if the “prosperity” of the past 50 years is mostly a statistical mirage for the bottom 80% of households? What if whatever real gains (adjusted for real-world loss of purchasing power) accrued only to the top of the wealth-power pyramid, those closest to financial and political power? What if the U.S. economy and society shifted from “everybody wins” to “winner takes all” or at best: the winner takes most”?

“...how much housing, higher education, and well-being does the average wage buy now compared to decades past? Not much. The statistics are bleak: wages are basically unchanged from the high water mark 50 years ago, which coincidentally was also the high water mark of U.S. energy production until very recently. Adjusted for purchasing power and quality, the average paycheck buys far less than it did 50 years ago.”

—in Charles Hugh Smith, “America’s Concealed Crisis: Fifty Years of Economic Decline, 1969 to 2019”.

Depois desta crise—2

A nossa frota automóvel, sobretudo de mercadorias, vai passar por uma transformação radical.

“A Idade da Pedra não chegou ao fim por falta de pedra, tal como a era do petróleo terminará um dia, mas não por falta de petróleo.” — Sheikh Zaki Yamani, antigo ministro saudita do petróleo.

As conversas à volta do fim do petróleo surgem normalmente contaminadas por vícios vários. Um deles, é confundir o fim do petróleo com o fim do petróleo barato. O petróleo torna-se caro, ou porque a procura excede a oferta, ou porque os custos da sua produção e consumo excedem um certo limiar de rentabilidade económica e ou ambiental a que alguns chamam EROI (Energy Returned On Energy Invested). A maioria dos países importadores de petróleo entra em recessão (1) quando o petróleo se torna demasiado caro, provocando inflação e crises financeiras, especulação e endividamento, e mudanças de governo, ao passo que os países viciados nas suas reservas de petróleo entram invariavelmente em crise quando o preço do barril desce abaixo dum certo limiar, mas também quando este se mantém durante alguns anos em níveis historicamente elevados (2000-2014), induzindo, por um lado, inflação, e por outro, instabilidade política provocada pelas novas exigências sociais e culturais dos povos que observam, nestes períodos de enorme prosperidade petrolífera, o enriquecimento escandaloso das elites que dirigem os seus países, a par da fraca redistribuição da riqueza. Foi este último fenómeno que provocou a chamada Primavera Árabe (2010), mas também a subida de Donald Trump ao poder.

A rentabilidade do 'fracking' é cada vez mais duvidosa, e depende cada vez do endividamento bancário.

Neste momento, parece evidente que o abrandamento da procura global, e a produção americana de petróleo de xisto, são os principais responsáveis pela queda dos preços do crude. Há, porém, outro fator que os mercados de futuros começam a incorporar nos seus cálculos: o início de uma deslocação histórica na composição do chamado mix energético que alimenta a vida dos humanos à face da Terra. Isto é, a corrida às energias eólica e solar, à eficiência energética, aos novos materiais e processos produtivos, à desmaterialização da economia, e sobretudo o cada vez plausível regresso em massa do transporte elétrico!

O fim do ciclo intensivo de petróleo sucederá inevitavelmente aos dois ciclos energéticos que o antecederam: o da madeira e o do carvão. Em qualquer destes três casos, o declínio da respetiva produção e uso deve-se a vários fatores, mas três são estruturais: a novidade, quantidade e qualidade de um novo recurso emergente, e de um novo paradigma de crescimento e bem-estar, o custo relativo da produção deste último, e a produtividade que é capaz de induzir, por comparação com os que parcialmente substitui e, finalmente, a mitigação dos impactos ambientais decorrentes do uso maciço e cumulativo no espaço e no tempo das novas gerações energéticas.

Vale a pena ler sobre este tema um importante paper produzido no FMI: “Riding the Energy Transition: Oil Beyond 2040” (2).

No que ao nosso país diz respeito pode concluir-se, sobretudo dos dois quadros que retirei do referido estudo, que não só seria uma estupidez sem limite entrarmos agora numa aventura tardia de exploração de hidrocarbonetos nas costas alentejana e algarvia (deixem a guerra do gás onde está!), como parece ter chegado a oportunidade de obtermos finalmente um consenso energético nacional claramente favorável à prioridade da energia elétrica num país ainda tão dependente da importação de carvão, gás natural e petróleo. Se houver este consenso, nomeadamente entre todos os partidos parlamentares, a nossa economia poderia começar, mais cedo do que outras, a girar em volta do paradigma que promete relançar o planeta na próxima era de prosperidade sustentável. Há, de facto, uma janela de oportunidade. Mas falta o principal: diminuir o peso das burocracias que entorpecem regime, e reformar de alto a baixo o nosso paradigma fiscal parasitário. Teremos, como propõe Carlota Perez (Beyond the Technological Revolution), que taxar mais os lucros especulativos e de curtíssimo prazo do que os de médio e longo prazo, teremos que diminuir a carga fiscal sobre o trabalho, teremos que introduzir o Rendimento Básico Incondicional, e teremos ainda, proponho eu e muitos outros, que introduzir algoritmos de descentralização e transparência nos domínios económico-financeiros (cripto moedas e moedas locais), no comércio, na política e nas áreas sociais e culturais.

Repare-se como Portugal se afastou rapidamente do carvão. Poderá fazer o mesmo com o petróleo.

NOTAS

1. All but one of the 11 postwar recessions were associated with an increase in the price of oil, the single exception being the recession of 1960. Likewise, all but one of the 12 oil price episodes listed in Table 1 were accompanied by U.S. recessions, the single exception being the 2003 oil price increase associated with the Venezuelan unrest and second Persian Gulf War.
   —in James D. Hamilton, “Historical Oil Shocks”, 2011 (PDF)
2. Recent technological developments and past technology transitions suggest that the world could be on the verge of a profound shift in transportation technology. The return of the electric car and its adoption, like that of the motor vehicle in place of horses in early 20th century, could cut oil consumption substantially in the coming decades. Our analysis suggests that oil as the main fuel for transportation could have a much shorter lifespan left than commonly assumed. In the fast adoption scenario, oil prices could converge to the level of coal prices, about $15 per barrel in 2015 prices by the early 2040s. In this possible future, oil could become the new coal.

[...]
From wood to coal to oil, the transition patterns remain similar. Fouquet's (2010) study of the United Kingdom indicates that it takes around 50 years for energy transitions to take place. Wilson and Grubler (2011) find that global changes require 80-130 years, while Vaclav Smil estimates that it takes 50-70 years (Lacey 2010) for new resources to reach a significant level. In a similar vein, Grubler’s (1990) work The Rise and Fall of Infrastructures highlights consistent 55-year intervals between the development of the canal, railway, and surfaced road networks in the United States (Grubler 1990, p. 276).
[...]
What we envisage at the horizon of the early 2040s could be a completely transformed oil market as the result of a technological revolution in transportation. The displacement of motor vehicles by electric vehicles would take away the special role oil has enjoyed over transportation since World War II. The elasticity of oil demand would increase as it would have to compete with coal, natural gas, nuclear and renewables on the energy market. The rise of renewables could even upend the role of fossil fuels in the energy mix all together.

IMF Working Paper 
Institute for Capacity Development
Riding the Energy Transition: Oil Beyond 2040
Prepared by Reda Cherif, Fuad Hasanov, and Aditya Pande1
Authorized for distribution by Ray Brooks and Ralph Chami
May 2017

Portugal, 2017

Política monetária do BCE sem alterações significativas.
FMI analisa às apalpadelas, e não acerta

Draghi prossegue a política monetária do chamado Quantitative Easing como única ferramenta disponível para evitar um colapso sistémico de consequências imprevisíveis. Fará alguma retenção no volume das aquisições de dívida pública, bancária e de alguns setores empresariais, entre abril e dezembro de 2017 (de 80 para 60 mil milhões de euros/ mês), ajudando assim a agenda eleitoral de Angela Merkel, mas promete desde já, se for necessário, intensificar em 2018, em volume, ou em duração, este mesmíssimo programa de Quantitative Pleasing: taxas de juro a zero ou abaixo de zero, aquisições maciças de dívida pública e privada, em suma, monetização de uma parte muito substancial da super-dívida que pesa sobre a maioria dos países do planeta, incluindo a rica Europa.

Sobre Portugal convém destacar o seguinte:

• vai crescer menos do que a União Europeia em 2016-2017 (1,3% contra 1,7%) e em 2018-2019 (1,2% contra 1,6%), 
• terá uma inflação ligeiramente acima da média dos países da União Europeia: 0,5% contra 0,2% em 2016, 1,4% contra 1,3% em 2017, 1,6% contra 1,5% em 2018.
• a rentabilidade das OT10 (3,51% em 11/11/2016) continua muito acima da média europeia e mais do dobro das obrigações espanholas (1,474% em 11/11/2016).
• no entanto, a nossa dívida total (pública e privada) em % do PIB é a terceira mais pesada do mundo, só ultrapassada pela da Irlanda e pela do Japão. O que significa que estamos demasiado expostos à evolução das taxas de juro e de câmbio, e aos preços da energia (petróleo) e das matérias primas.

Este gráfico do McKinsey Global Institute é demasiado claro!

No prazo da atual legislatura, os ventos são pois razoavelmente favoráveis à Frente Popular Pós-Modenra instalada no poder. A menos que haja uma alteração radical no sistema mundial e na adaptação económico-financeira em curso, haverá condições para o PCP e o Bloco de Esquerda continuarem a suportar o governo de António Costa, ainda que à custa de uma menorização acelerada do peso eleitoral destes pequenos partidos. Se o PS consolidar a sua maioria autárquica no final de 2017, sobretudo se for à custa do PSD e do CDS, haverá condições para uma renovação da atual solução governativa, possivelmente com a entrada do PCP e do Bloco no próximo governo —única forma de obviarem a sua já evidente erosão eleitoral.

Mas se o PCP continuar a perder câmaras para o PS a história será outra. É bem possível que haja um acordo entre o PS e o PCP para proteger as câmaras do PCP... em troca de candidatos comunistas fracos em Lisboa, claro!

Já agora convém dizer o seguinte: apesar de existir um Bloco Central Eleitoral, não haverá regresso ao Regime de Bloco Central, e muito menos a um Governo de Bloco Central.

A separação de águas foi iniciada por Pedro Passos Coelho e prossegue com a geringonça. O que começamos a ter em seu lugar é uma espécie de Grande Coligação camuflada, onde António Costa se dedica a aplicar a famosa tática do salame ao PSD, e o Presidente da República, percebendo o perigo da dialética agressiva da chamada 'esqueda' contra a designada 'direita', decidiu recentemente refrear o seu entusiasmo pela geringonça.

Faz bem Passos Coelho em fustigar Marcelo Rebelo de Sousa, por forma a forçar o Presidente da República a decidir que papel quer desempenhar neste jogo.

Por sua vez, o contexto internacional e nacional pode definir-se pela seguinte frase que ninguém diz, mas que os poderes instalados praticam:

— há que ir ensopando o buraco negro das dívidas... aumentando a pressão fiscal sobre a economia paralela, continuando a confiscar paulatinamente a poupança das famílias e, desejavelmente, reorganizando o uso das disponibilidades orçamentais, tendencialmente decrescentes, em prol de uma estratégia de renovação económica, social e cultural, eficiente e sustentável.

A economia já não consegue arrancar nos termos da ida 'price revolution', que durou desde 1886/87 até 1973/2008. Entrámos numa era de crescimento real* ténue (entre 0 e 1%), desinflação (inflação entre 0 e 2%), desemprego estrutural, mas também de acelerada inovação tecnológica, social e... cultural.

A hipertrofia dos governos e dos estados sociais vai ceder necessariamente a sua hegemonia burocrática a uma nova realidade económica, política e social em acelerada gestação: empresas globais (como esta onde escrevo e publico os meus textos), generalização dos mapas democráticos (como, por exemplo, este), bancos automáticos, lavandarias automáticas, lojas online, restauração em modo auto-serviço, mobilidade em rede com ou sem condutor, telemedicina, universidades online, e o fim do jornalismo como o conhecemos até ao seu presente estrebuchar indigente no pântano do endividamento que perde dia a dia as suas proteções político-partidárias. O mundo mudou no dia em que o Presidente dos Estados Unidos dispensou os média tradicionais (hierárquicos e centralizados/ broadcast) e passou a usar o Twitter!

Continuará a haver lugar para as pessoas, pois o consumo das máquinas não dá lucro, e sim despesa. Mas lá que a transição em curso, sobretudo a metamorfose social e cultural, é e vai continuar a ser dolorosa, vai. Por isso defendo a criação de um Rendimento Básico Incondicional, eliminando do estado social os intermediários da fome.

Por fim, a Trumpnomics vai forçar o princípio dos vasos comunicantes na globalização.

O mundo já não é bipolar, nem unipolar. A globalização só tem um caminho viável à sua frente: reconhecer que a produtividade, o comércio, a política e a força militar mundiais passaram a definir, de modo ao mesmo tempo complementar e diferenciado, grandes placas geo-estratégicas: EUA, China, Rússia, Brasil e Europa Ocidental (até ver...).

* O crescimento real das economias é menor do que os números dos respetivos PIB dão a entender. Desde logo porque uma parte crescente do consumo que conta para o crescimento tem sido alimentado pelo sobre-endividamento privado e público.


EXCERTOS DO BCE E DO FMI

BCE

As regards non-standard monetary policy measures, we will continue to make purchases under the asset purchase programme (APP) at the current monthly pace of €80 billion until the end of March 2017. From April 2017, our net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. If, in the meantime, the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment of the path of inflation, the Governing Council intends to increase the programme in terms of size and/or duration. The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the APP. [...] 

The key ECB interest rates were kept unchanged and we continue to expect them to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. [...] 

This assessment is broadly reflected in the December 2016 Eurosystem staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.7% in 2016 and 2017, and by 1.6% in 2018 and 2019. Compared with the September 2016 ECB staff macroeconomic projections, the outlook for real GDP growth is broadly unchanged. The risks surrounding the euro area growth outlook remain tilted to the downside. [...] 

According to Eurostat’s flash estimate, euro area annual HICP inflation in November 2016 was 0.6%, up further from 0.5% in October and 0.4% in September. This reflected to a large extent an increase in annual energy inflation, while there are no signs yet of a convincing upward trend in underlying inflation. Looking ahead, on the basis of current oil futures prices, headline inflation rates are likely to pick up significantly further at the turn of the year, mainly owing to base effects in the annual rate of change of energy prices. Supported by our monetary policy measures, the expected economic recovery and the corresponding gradual absorption of slack, inflation rates should increase further in 2018 and 2019.
This pattern is also reflected in the December 2016 Eurosystem staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0.2% in 2016, 1.3% in 2017, 1.5% in 2018 and 1.7% in 2019. By comparison with the September 2016 ECB staff macroeconomic projections, the outlook for headline HICP inflation is broadly unchanged. [...] 

The implementation of structural reforms in particular needs to be substantially stepped up to reduce structural unemployment and boost potential output growth in the euro area. Structural reforms are necessary in all euro area countries. The focus should be on actions to raise productivity and improve the business environment, including the provision of an adequate public infrastructure, which are vital to increase investment and boost job creation. [...] 

Fiscal policies should also support the economic recovery, while remaining in compliance with the fiscal rules of the European Union. Full and consistent implementation of the Stability and Growth Pact over time and across countries remains crucial to ensure confidence in the fiscal framework. At the same time, it is essential that all countries intensify efforts towards achieving a more growth-friendly composition of fiscal policies. 

in “Introductory statement to the press conference”
Mario Draghi, President of the ECB,
Vítor Constâncio, Vice-President of the ECB
Frankfurt am Main, 8 December 2016
Link

Expanded asset purchase programme 

The expanded asset purchase programme (APP) includes all purchase programmes under which private sector securities and public sector securities are purchased to address the risks of a too prolonged period of low inflation. It consists of the 

—third covered bond purchase programme (CBPP3)
—asset-backed securities purchase programme (ABSPP)
—public sector purchase programme (PSPP)
—corporate sector purchase programme (CSPP) 

Monthly purchases in public and private sector securities amount to €80 billion on average (from March 2015 until March 2016 this average monthly figure was €60 billion) 

in ECB/ Asset purchase programmes

FMI (os acertos das previsões —políticas— têm uma qualidade duvidosa. Basta comparar as previsões de setembro com as de dezembro e junho deste ano)

Portugal’s near-term outlook has improved, primarily on the back of an acceleration of exports seen in the third quarter of 2016. This higher-than-expected growth outturn followed relatively subdued activity in the preceding two quarters. However, a continuation of strong growth that is broad-based would be needed to conclude that a sustained shift to a faster-paced recovery is underway. The authorities’ 2016 fiscal targets are within reach, and the current account is projected to remain in a small surplus. Against the background of improved consumer confidence, the near-term risks to the macroeconomic outlook are broadly balanced. The medium-term outlook, however, remains broadly unchanged and is vulnerable to shocks, given the high stock of public and private debt, continuing banking sector weaknesses, and persistent structural rigidities. This calls for ambitious efforts to improve the resilience of the financial sector, ensure durable fiscal consolidation, and raise the economy’s growth potential 

1. Recent macroeconomic developments point to a near-term rebound from the subdued activity in the first half of the year. Real GDP grew by 1.6 percent (year-on-year) in the third quarter—up from 0.9 percent in the first half of 2016—driven primarily by net exports. The labor market has continued to strengthen, and the unemployment rate has declined to the pre-crisis level of 10.5 percent. Staff now expects economic activity to expand by 1.3 percent in both 2016 and 2017. Looking further ahead, the economy’s high level of indebtedness and persistent structural rigidities are expected to constrain growth at around 1.2 percent over the medium term 

2. Based on the latest data, staff estimates a fiscal deficit of around 2.6 percent of GDP in 2016, implying an expansion of 0.4 percent of GDP in structural primary terms. The authorities’ strong efforts at containing intermediate consumption and public investment well below budgetary allocations have mitigated the impact of a sizeable revenue underperformance on the headline deficit. Gross public debt is projected to reach 131 percent of GDP at the end of 2016. 

3. The recently-approved 2017 budget aims for a further reduction in the fiscal deficit, to 1.6 percent of GDP. Based on the specified measures, staff projects a fiscal deficit of 2.1 percent of GDP—an implied primary structural tightening of 0.1 percent of GDP—with public debt remaining elevated at 130 percent of GDP. Under staff’s macroeconomic assumptions, achieving the authorities’ fiscal deficit target would require an additional structural effort of 0.4 percent of GDP. A consolidation effort based on durable expenditure reforms would be more supportive of growth than relying on compression of public investment. 

in “Portugal: Staff Concluding Statement of the Fifth Post-Program Monitoring Mission”
December 8, 2016
Link 

“IMF Executive Board Concludes 2016 Article IV Consultation with Portugal”
September 22, 2016
Link 

“Portugal: Concluding Statement of the Fourth Post-Program Monitoring and 2016 Article IV Consultation Discussions”
June 30, 2016
Link

Última atualização: 31/12/2016 23:12  WET

Foi V. que pediu uma reestruturação da dívida?

AFP PHOTO / ADEK BERRY

Faites vos jeux! O casino não pode parar!

FMI considera que bancos centrais não devem aumentar a taxa de juro
Público, Camilo Soldado, 03/09/2015 - 15:10 

Na antevisão da reunião do G-20 que tem início na sexta-feira em Ancara, Turquia, o Fundo Monetário Internacional (FMI) instou os bancos centrais das maiores economias do mundo a não aumentar as taxas de juro.

Com o avolumar das preocupações sobre o crescimento da economia mundial, no documento preparatório do encontro do G-20, o fundo defende que o incentivo ao consumo se deve manter, numa alusão à possibilidade de a Reserva Federal norte-americana subir a taxa de juro.

A directora da instituição sedeada em Nova Iorque, Christine Lagarde, já tinha dito no início da semana que o crescimento global deve ser revisto em baixa devido a uma recuperação mais lenta das economias desenvolvidas e a uma desaceleração das economias emergentes.

Ou seja, a diarreia monetária é para continuar, pois só assim se consegue manter os regimes de pé, evitar revoluções clássicas, e, ao mesmo tempo, secar a dívida especulativa dos bancos e sociedades de investimento especulativo em derivados financeiros, a qual tem vindo a ser absorvida pelos bancos centrais... Capiche?

É por isto que o Syriza não singra, e que o nosso Costinha das Avenidas, e a famosa esquerda que não quer governar, vão acabar por levar um banho de água gelada a 4 de setembro.

Foi Você que pediu a reestruturação das dívidas públicas europeias? É já a seguir!

BCE pode comprar mais dívida pública e admite reforçar alívio quantitativo
Jornal de Negócios, 03 Setembro 2015, 15:05 por Nuno Aguiar

Cada leilão de dívida de países da moeda única poderá agora contar com uma presença mais reforçada do Banco Central Europeu (BCE) nessas emissões. Segundo anunciou o presidente do BCE hoje, 3 de Setembro, a percentagem máxima de dívida pública que pode ser comprada aumentou de 25% para 33%, embora seja necessário fazer uma avaliação "caso a caso".

Não precisa, como vê, do António Costa, nem da esquerda desmiolada, para nada.
A diarreia monetária global não se cansa de reestruturar. Os politocratas agradecem, os bancos agradecem, e a austeridade vai continuar, para o resto dos mortais, claro.

“And finally, monsieur, a wafer-thin mint.”

Os príncipes do dinheiro

Japão, 2005

Capitalismo de estado, ou banksterismo? Haverá uma terceira via?

E se todos expandirem o crédito ao mesmo tempo? E se o problema for económico, tecnológico e social, antes de ser financeiro e orçamental?

Seja como for, este vídeo é uma peça analítica fundamental para compreender uma parte crucial da crise sistémica do capitalismo global em mais uma das suas dolorosas metamorfoses.

O ponto de vista de Richard Werner — autor da expressão quantitative easing e do “Quantity Theory of Credit”, é a da defesa da expansão do crédito através de políticas monetárias controladas pelos cidadãos, ou seja pelos governos eleitos, em detrimento, portanto, do poder exagerado e perverso dos príncipes do dinheiro e das suas organizações sombrias.

Princes of the Yen, publicado no YouTube a 04/11/2014

“Princes of the Yen” reveals how Japanese society was transformed to suit the agenda and desire of powerful interest groups, and how citizens were kept entirely in the dark about this.

Based on a book by Professor Richard Werner, a visiting researcher at the Bank of Japan during the 90s crash, during which the stock market dropped by 80% and house prices by up to 84%. The film uncovers the real cause of this extraordinary period in recent Japanese history.

Making extensive use of archival footage and TV appearances of Richard Werner from the time, the viewer is guided to a new understanding of what makes the world tick. And discovers that what happened in Japan almost 25 years ago is again repeating itself in Europe. To understand how, why and by whom, watch this film.

“Princes of the Yen” is an unprecedented challenge to today’s dominant ideological belief system, and the control levers that underpin it. Piece by piece, reality is deconstructed to reveal the world as it is, not as those in power would like us to believe that it is.

“Because only power that is hidden is power that endures.”

FMI repensa Portugal

O conteúdo deste relatório não é novo. Só a algazarra é.

Nem tanto ao mar, nem tanto à terra!

A democracia não acabou com o Estado Corporativo, aumentou-o, engordou-o até à insustentabilidade, e conduziu o país, crescentemente falido, até à insolvência. No fundo, os partidos políticos populistas limitaram-se a substituir o ditador, sem realmente permitir a libertação efetiva da sociedade civil e conservando para seu sustento institucional a mesma base burocrática de apoio. Corrigir esta situação será sempre uma metamorfose dolorosa. Mas os que mais vociferam e encharcam a comunicação de propaganda demagógica são, afinal, os principais beneficiários do regime e os que maior inércia opõem à mudança.

O diagnóstico está feito. Embora a cada dia que passa os gráficos revelem claramente quem ganhou e quem perdeu nas quase quatro décadas que se seguiram ao colapso da ditadura.

A transição necessária pode resumir-se assim: passar de um Estado demasiado grande, caro e ineficiente para um Estado mais ágil e eficiente que consuma menos recursos essenciais ao crescimento económico produtivo, e que assegure a solidariedade entre gerações, aproxime os níveis de rendimento entre os setores público e privado, e promova um ambiente de equidade fiscal favorável à criação de emprego, especialmente entre os jovem dos 16 aos 35 anos.

Sem isto, para começar, será difícil inverter o declínio acelerado da economia e a insustentabilidade patente das finanças públicas. Deixar que este binómio se degrade ainda mais é convocar, outra vez, os demónios do passado.

Sem classes médias não há democracia que resista, mas para que estas não morram é preciso travar a hipertrofia burocrática do Estado, e é urgente bloquear a manutenção e reprodução alargada das elites financeiras, económicas e burocráticas protegidas e eternamente aninhadas nas receitas dos orçamentos públicos, cujo egoísmo, nomeadamente em relação aos mais velhos e desprotegidos, bem como em relação às gerações mais jovens, é escandaloso e cada vez mais intolerável.

O estudo do FMI encomendado pelo governo e ontem mal divulgado com a fanfarra mediática do costume não traz nada de novo relativamente ao que o governo tem vindo a revelar às pinguinhas. A análise é clara, os quadros e gráficos são muito reveladores, e, por fim, o menu de soluções define um quadro razoável de alternativas aberto à discussão pública. O principal, do ponto de vista da cidadania, é evitar que os paquidermes do regime, uma vez mais, intoxiquem o debate e acabem por matá-lo sob a sua omnipresença mediática. Sintomaticamente, nem o governo, nem o parlamento se deram à módica despesa de traduzir o documento que incendiou as hostes partidárias.

Seguem-se alguns destaques, gráficos e, por fim, o documento completo.

[NOTA: ver tradução da no fim deste post]


EXECUTIVE SUMMARY

“While big governments have usually been linked to lower growth, they do not necessarily generate worse outcomes. The focus of expenditure reform should be on improving equity and efficiency in the process of achieving certain outcomes. Better equity (e.g., through improved targeting) and better efficiency (e.g., through reduced spending) can often go hand-in-hand, and, together, they lay the foundations for achieving a more robust economic growth, sound public finances, and an exit from the crisis.”

[...]

“Its goal is to increase spending efficiency and equity, while safeguarding social cohesion and strengthening the sustainability of the welfare state.”

[...]

“The government’s spending reduction target can only be achieved by focusing on major budget items, particularly the government wage bill and pension spending. Together, these two items account for 24 percent of GDP and 58 percent of non-interest government spending. It would seem impossible to generate the government’s spending reduction goals without changes in these two areas, and relevant related reforms should take priority.

Reforms related to the wage bill should target areas that promise potentially large efficiency gains and budget savings. Over-employment is of concern in the education sector, the security forces, and with respect to workers with little formal training, while high overtime pay (for doctors) is of concern in the health sector. Other reforms are also important for modernizing the state (e.g., compensation and contract structures to better attract talent, equity between public and private sector employment by reducing the public wage premium, and labor mobility in and out of the public sector), but can be given lower priority in the near term.”

[...]

“Merging the CGA and GCR administrations could provide a strong initial signal toward achieving greater equity.

Various pension reforms would deliver the desired savings, but only accelerating the transition to the new system and modifying entitlements will address existing inequities. A series of incremental reforms of the pension system could manage to deliver the savings desired by the government, but would fail to correct existing inequities. A faster transition to the new pension system (for example, by equalizing the pension formula for all workers including for people who entered into the CGA regime before 1993), and/or a modification of existing rights (for example, by applying a sustainability factor to all pensions) would be needed to correct the existing intergenerational and cross-occupational inequities.”

[...]

“An efficient and effective state enables and empowers its citizens to handle the demands of the global economy. In many countries, the state has moved away from being a provider of services (or the sole provider of services) and toward being a setter and enforcer of service standards, while service provision itself is handled by the private sector. Seeing the state as an activator or enabler has important implications in many areas. Taking education as an example, and notwithstanding recent reforms, the Portuguese state still attempts to do (almost) everything: it provides education, sets standards, evaluates (its own) performance, and enforces standards. Yet, the state has been falling behind in providing quality education: of the 50 top schools, 44 are private, 4 are charter schools, and only 2 are public schools.”

[...]

“Public sector pay and employment policies need to emphasize competitiveness and providing value for money to the population. A modern enabling state needs to be on par with the private sector in the way it operates—it cannot be seen as sheltering privileges for itself, either in the form of employment conditions or remuneration. International experience is not encouraging: on aggregate, public sector jobs pay too much.

The reform of public sector pay and employment can boost economic growth by helping reduce private sector labor costs.

Public sector employment may be reduced in some areas where it seems too high to produce required outputs. The public sector pay premium should be reduced, particularly for jobs that do not require advanced skills, and options should be considered for rewarding the acquisition of new skills and the achievement of good results and outcomes.”

[...]

EQUITY AND SOCIAL COHESION

[...]

“Portugal’s social protection system could do better in mitigating inequalities. The operation of the contributory social protection system reflects the logic of insiders and outsiders and serves to reinforce the gap between rich and poor. In contrast to many other OECD and EU countries, Portugal’s social transfers provide more benefits to upper income groups than to lower income groups, aggravating inequality. Particularly in times of fiscal distress and growing concerns about social cohesion, a regressive social protection system looks less and less sustainable both economically and conceptually.

Government spending must be focused where it is most needed and where it will have most results. Effective states set clear priorities and pursue them with focused interventions. Compared to the time when welfare states were founded, the overall level of and prosperity of society is much greater. At the same time, inclusion problems faced by the poor are often more intractable. Limited resources will go a longer way if they prioritize help to the bottom of the income distribution, while the remainder of the population, far from being abandoned, is being provided with the tools to help themselves. In this way, an intervention of a given size is magnified and targeted.”

[...]

“Successful targeting of state interventions requires improvements in public sector governance. For focused interventions to work, the needs of individuals and families must be assessed transparently and simply. A good social policy requires effective information processing and efficient interactions with individuals and businesses. For example, taxes need to be payable and benefits receivable electronically. Public services need to be subjected to transparent performance monitoring, using outcome-based indicators and league tables that compare performance.

The enabling state must also pay more attention to the needs of the young. The existing Portuguese welfare system emphasizes life-long accrual of age-related entitlements. The priority given to older people reflected an expectation of sustained growth, high employment, and limited migration, which have now been disproved. The problems faced by the young—both in entering the labor force and in facing greater income and employment insecurity once they get there—imply a growing distance between those entering the labor market and the more mature population. The issue of intergenerational equity is already important but is likely to increase dramatically in the next decade. The state should thus place greater emphasis on interventions affecting young people’s earning capacity (e.g., specific education interventions), and should temper age-related social protection demands and spending, most notably by promoting active ageing.”

[...]

MACROECONOMIC CONTEXT AND BACKGROUND

[...]

“To achieve fiscal sustainability, the government sees a need to reduce spending by about €4 billion (about 2.4 percent of GDP) by 2014; about €0.8 billion of these should be put in place already in 2013.”

[...]

PENSIONS / Background

[...]

“Portugal currently spends about 14½ percent of GDP in all of its public pension programs.

Among the advanced economies, this is one of the largest shares of GDP devoted to pension spending.”

[...]

“Portugal’s public pension system does not protect adequately against old-age poverty and remains inequitable.”

[...]

“High pension spending and high elderly poverty are reflective of an inequitable system, where 40 percent of old age pension spending is received by the top quintile in the income distribution [...]. This suggests that there may be room to reevaluate benefits without compromising equity goals.” [...]

“The pension system is not equitable. Workers in the civil service and workers in the private sector receive vastly different pensions. Civil servants, who account for about 15 percent of all retirees, receive 35 percent of all pension spending. The average old-age pension in the CGA (€16,052 per year) is nearly three times higher than the average old-age pension in the GCR (€5,515 per year). The differences in average pensions significantly exceed the differences in average earnings (€1,800 vs. €700 per month). This suggests that civil service pensions carry a premium of about 15 percent relative to private sector pensions.” [...]

“Overall, the pension system does not deliver “social insurance” in the traditional sense. The GCR remains roughly a flat-rate system—about 90 percent of the pensioners receive the minimum. This makes the GCR similar to social assistance. By contrast, CGA pensions are relatively high—average public pensions are nearly 100 percent of average public wages, reflecting mostly benefits granted under the old system—and are provided only to a small share of the population. This makes the CGA more similar to a private defined benefit system rather than social insurance, although in an unsustainable way.”

Despesa primária em Portugal: comparações.

Horas de trabalho por ano: comparação internacional.

Suplementos salariais na Administração Pública.

Duração do subsídio de desemprego: comparação internacional.

Diferença de níveis de remuneração público/privado: comparação internacional.

Documento do FMI (versão integral)

Portugal: Rethinking the State—Selected Expenditure Reform Optins, January 2013 (IMF) by António Maria

Tradução portuguesa do Relatório realizada, não pelo Governo, como lhe competia, mas pela Blogosfera, graças aos voluntários da Aventar. Obrigado!

Relatório FMI, 2013 traduzido por Aventar

Última atualização: 18 jan 2013 19:59 WET

Depois de Marx, o FMI

Sopa dos Pobres financiada por Al Capone, em Chicago durante a Grande Depressão (1).

The Chicago Plan: que tal retirar aos bancos o poder de criar dinheiro do nada usando os nossos depósitos e as nossas dívidas como pretexto e colateral? Quem o acaba de propor são dois investigadores do FMI.

A experiência social, de que a Irlanda, Grécia e Portugal têm sido os casos de estudo mais recentes, está a chegar ao fim com resultados claramente desastrosos. É inevitável, nesta fase terminal da longa vaga de expansão inflacionista da economia iniciada no século 20 (D.H. Fischer), que uma sucessão de eventos de instabilidade extrema acabe por terminar num colapso geral. As crises de endividamento exponencial irresolúveis resultantes das bolhas imobiliária, soberana e estudantil, colocaram o sistema financeiro mundial e os governos à beira de um conflito fatal com os povos de onde nasceram e de que se alimentam. À medida que as classes profissionais mais avançadas vão percebendo o que realmente está em jogo, cresce de modo exponencial a sua resistência à avareza, luxúria e arrogância dos banqueiros e seus economistas de trela, e a sua revolta contra a estupidez crónica das democracias populistas degeneradas e os seus cada vez mais corruptos, execráveis ou simplesmente caricatos políticos. Por aqui, a esta corja, já só lhes resta um embate fatal com a multidão!

A sangria fiscal sobre o trabalho e as poupanças atingiu o limite. A degradação dos rendimentos do trabalho ainda não. É por aqui que os piratas julgam poder continuar os seus desesperados movimentos brownianos. Mas desenganem-se! Até no interior do FMI, para além dos sucessivos avisos de Christine Lagarde (de que desconfio por serem sistematicamente dirigidos à Europa, esquecendo os EUA, o Reino Unido, ou a própria China), dois dos seus investigadores, Jaromir Benes e Michael Kumhof, escreveram e publicaram recentemente um texto —“The Chicago Plan Revisited”— que está a queimar como um rastilho o futuro da arrogância cabotina de banqueiros como o indígena que por cá temos, de nome Fernando Ulrich, do já meio catalão BPI.

Este estudo é bem o reflexo da amplitude explosiva da crise financeira que deflagrou nos Estados Unidos em 2007 e cujos episódios não cessam de se multiplicar e de aproximar o fim da sistémica instabilidade do capitalismo cujo início remonta, segundo David Hackett Fischer, ao Jubileu da Rainha Vitória, em 1896. Todo o século 20 e ainda os primeiros dez, quinze ou vinte anos deste século, correspondem a um dos longos ciclos de crescimento inflacionista detetado no provocador e de leitura obrigatória livro de Fischer, The Great Wave (1996).

Eleger a Grécia, ou Portugal, como bodes expiatórios de algo que culmina o colapso de um ciclo longo de crescimento mundial é, desde logo, uma armadilha que devemos evitar, sem prejuízo da consciência que teremos que desenvolver sobre a necessidade absoluta de corrigir os excessos de endividamento sistémico e de corrupção que levaram as democracias ocidentais à beira da implosão.

Antes de passarmos ao estudo do FMI, uma referência breve a dois países do norte europeu que são duas verdadeiras bombas-relógio: o Reino Unido e a Holanda.

THE DUTCH TRAGEDY: The country’s current worrying situation, disturbingly resembles that of Ireland and Spain, as it addresses an extremely large private dept, a tremendous real estate bubble, and huge bank mortgage loan defaults – problems for which nothing has been done.

[...] The total mortgage debt of the Dutch is around 640 billion euro’s (when Greece’s public debt is around 290 billion euro’s) – against which the private deposits of the Dutch are just 332 billion euro’s.

This means that the Dutch banks must finance the difference (308 billion euro’s) from abroad – resulting in enormous dependence on the international financial markets. With the country’s GDP at around 650 billion euro’s, the total (mortgage) debt of households is scary; nearly 100% of GDP — Vassilis Viliardos, Cass, 26 out 2012.

Se na Holanda o colapso, nomeadamente de vários bancos, poderá ocorrer a qualquer momento, em resultado da explosiva bolha imobiliária que ali cresceu e é mais grave ainda do que a bolha espanhola, no caso britânico, os territórios autónomos da finança sediados na City de Londres e nos paraísos fiscais alojados nomeadamente em ilhas que são propriedade pessoal da rainha de Inglaterra, as chamadas Crown dependencies (Jersey, Guernsey e Isle of Man), estão no centro de um furacão de corrupção financeira sem precedentes na Europa dos últimos dois séculos. A Dona Branca montada em volta da taxa Libor, a chamada re-hipoteca não autorizada dos colaterais dados por clientes em operações de investimento (shadow rehypothecation), a falência iminente do seu fundo público de pensões e, finalmente, o extraordinário endividamento do Reino Unido, 492% do PIB em novembro de 2011 (BBC/Robert Peston) colocam, afinal, o centro da Europa (as revelações alemãs seguem dentro de momentos...), no centro do colapso financeiro de todo o continente. Os PIIGS, coitados, andavam aos restos do festim quando o mesmo já tinha chegado à sobremesa.

O Plano de Chicago: substituir os bancos privados pelos bancos públicos na criação de dinheiro sem que este se transforme automaticamente, nem em dívida privada usurária, nem em deboche público ao serviço de bacanais de corrupção político-partidária

O ponto de partida do estudo do FMI, para o qual Ambrose Evans-Pritchard chamou a nossa atenção no Telegraph online, é simples: ao contrário do que pensa o Totó inSeguro, e ao contrário do que a desmiolada esquerda que temos exige, não há crescimento no horizonte mais próximo. O que se percebe nos sinais evidentes da economia é a aproximação de uma enorme frente de decrescimento sistémico e de deflação. Logo, ou se descobre uma solução financeira para mitigar os impactos catastróficos do desendividamento e do desenmerdamento das economias públicas e privadas, ou a destruição dos excessos de produção industrial, de emprego economicamente inútil e da procura agregada desembocará em inevitáveis revoluções sociais e desagregações políticas em cadeia.

IMF’s epic plan to conjure away debt and dethrone bankers
By Ambrose Evans-Pritchard 2:31PM BST 21 Oct 2012

So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.

One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.

The conjuring trick is to replace our system of private bank-created money -- roughly 97pc of the money supply -- with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.

Specifically, it means an assault on “fractional reserve banking”. If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.

Mas vale mesmo a pena ler o original desenvolvido por Jaromir Benes e Michael Kumhof (2), de que aqui deixo citações esclarecedoras do respetivo abstract e conclusões:

Abstract

At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher’s claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.

[...]

VIII. Conclusion

This paper revisits the Chicago Plan, a proposal for fundamental monetary reform that was put forward by many leading U.S. economists at the height of the Great Depression. Fisher (1936), in his brilliant summary of the Chicago Plan, claimed that it had four major advantages, ranging from greater macroeconomic stability to much lower debt levels throughout the economy. In this paper we are able to rigorously evaluate his claims, by applying the recommendations of the Chicago Plan to a state-of-the-art monetary DSGE model that contains a fully microfounded and carefully calibrated model of the current U.S. financial system. The critical feature of this model is that the economy’s money supply is created by banks, through debt, rather than being created debt-free by the government.

Our analytical and simulation results fully validate Fisher’s (1936) claims. The Chicago Plan could significantly reduce business cycle volatility caused by rapid changes in banks’ attitudes towards credit risk, it would eliminate bank runs, and it would lead to an instantaneous and large reduction in the levels of both government and private debt. It would accomplish the latter by making government-issued money, which represents equity in the commonwealth rather than debt, the central liquid asset of the economy, while banks concentrate on their strength, the extension of credit to investment projects that require monitoring and risk management expertise. We find that the advantages of the Chicago Plan go even beyond those claimed by Fisher. One additional advantage is large steady state output gains due to the removal or reduction of multiple distortions, including interest rate risk spreads, distortionary taxes, and costly monitoring of macroeconomically unnecessary credit risks. Another advantage is the ability to drive steady state inflation to zero in an environment where liquidity traps do not exist, and where monetarism becomes feasible and desirable because the government does in fact control broad monetary aggregates. This ability to generate and live with zero steady state inflation is an important result, because it answers the somewhat confused claim of opponents of an exclusive government monopoly on money issuance, namely that such a monetary system would be highly inflationary. There is nothing in our theoretical framework to support this claim. And as discussed in Section II, there is very little in the monetary history of ancient societies and Western nations to support it either.

in IMF
Working Paper
Research Department
The Chicago Plan Revisited
Prepared by Jaromir Benes and Michael Kumhof
Authorized for distribution by Douglas Laxton
August 2012

(PDF)

NOTAS

1. Sobre a foto que acompanha este post: “A line of people waiting outside a soup kitchen during the Great Depression. “Soup kitchens” provided the only meals some unemployed Americans had. This particular soup kitchen was sponsored by the Chicago gangster Al Capone.” LearnNC.
2. Para uma leitura crítica deste polémico estudo nada melhor do que o artigo de Steve Keen, “The IMF gets radical?”, in Business Spectator, 7:26 AM, 5 Nov 2012.

Última atualização: 16 nov 2012 20:03

From Portugal with Love — 1

Raphael Bordallo Pinheiro. "II-A Finança: O Grande Cão" (1900)

Dear Troika,

I feel that I should write to you a weekly post beginning in such friendly way a useful convesation about the country you are trying to help to stabilize its unfortunate economic, financial and political recent evolution. You must know by now that accurate information is not an easy pearl to get! Noise is everywhere. Even for a local dandy like me to know what’s happening is not an easy task. Nevertheless I presume to know by now what are the few decisive barriers we have to cross if we really want to put Portugal in the right path to sustainability and human progress. I assume optimistically that your difficult job may profit from new, independent and above all unexpected insights.

Every Saturday at brunch time I will post a brief memo to you. This first one is about the need of theory before practice. I am actually reading for the second time a marvellous book by Hyman Minsky on the very same and urgent issues that worry most of the macro-economists today, at least in USA and Europe. Big Government he said! Too big right now, many suggest. Can we have “IT” (The Great Depression) again — notwithstanding the huge preponderance of governance in almost all contemporary corners of life?

From Minsky to Yiamouyiannis

How can an exhausted Lender Of Last Resort (Keynes) play the role of an Employer Of Last Resort (Minsky)? Answer: if without some global Debt Forgiveness policy (Yiamouyiannis) it is impossible. On the other hand, fiscal adjustment as the only way to socialize debt cannot solve real issues. It is actually a very dangerous step to try at present pandemic sovereign debt crisis, either in USA or Europe. Overall OTC derivatives notional value amount to more than ten times world GDP. This monster cannot be socialized!

Why to give away our public companies?

Total amount of expected revenues from forthcoming privatization of Portuguese public companies and utilities will not suffice to pay for TAP and CP debts alone. My country is then supposed not only to offer these public companies, but also to heavily pay for such nonsensical give away of potencially profitable business, public utilities and public services. Why not spin-off some of these companies into reliable (even profitable) entities before taking such a suicidal course of action?

Next week

Future roads (SCUTs) and dams (PNBEPH) will drawn this country down the drain of debt if you do not give it full attention, and if we the people fail to stop these huge scams!

And now some juicy food for thought!



By the way: FHFA Sues 17 Firms to Recover Losses to Fannie Mae and Freddie Mac

Finally, my readings for this weekend:

Stabilizing An Unstable Economy (1986, 2008)
Hyman P. Minsky

Although stabilization policy operates upon profits, the humane objective of stabilization policy is to achieve a close approximation to full employment. The guarantee of particular jobs is not an aim of policy; just as with profits, the aggregate—not the participants—is the objective.

The current strategy seeks to achieve full employment by way of subsidizing demand. The instruments are financing conditions, fiscal inducements to invest, government contracts, transfer payments, and taxes. This policy strategy now leads to chronic inflation and periodic investment booms that culminate in financial crises and serious instability. The policy problem is to develop a strategy for full employment that does not lead to instability, inflation, and unemployment.

The main instrument of such a policy is the creation of an infinitely elastic demand for labor at a floor or minimum wage that does not depend upon long— and short-run profit expectations of business. Since only government can divorce the offering of employment from the profitability of hiring workers, the infinitely elastic demand for labor must be created by government.

A government employment policy strategy should be designed to yield outputs that adavnce well-being, even though the outputs may not be readily marketable. Because the employment programs are to be permanent, operating at a base level during good times and expanding during recession, the tasks to be performed will require continuous review and development.


“Endgame: When Debt is Fraud, Debt Forgiveness is the Last and Only Remedy”
by Zeus Yiamouyiannis, Ph.D., copyright 2011. (in Of Two Minds, September 1, 2011)

Finally serious economists are considering a position I have been maintaining and writing about since the 2008 financial meltdown. Whatever its name —erasure, repudiation, abolishment, cancellation, jubilee— debt forgiveness, will have to eventually emerge forefront in global efforts to solve an ongoing systemic financial crisis.

[...]

Debt grows exponentially indefinitely, growth (income and otherwise) cannot. This leads to a widening condition where the fruits of productive “growth” devoted to interest payments increase until those fruits are entirely consumed. [...] Once this happens, stores of wealth (hard assets) begin to be cannibalized to make up for the difference. You see this in Greece with its sale of public assets to private companies, and in middle-class America where people are liquidating retirement accounts to pay for their cost of living.

This problem is compounded by a private Federal Reserve that lends money into circulation at interest, and then allows the multiplication of this consumer debt-money liability through fractional reserve banking. The money in circulation today could pay only a small fraction of the total private and public debt. That fact alone is evidence of a kind of systemic fraud. “If you just work hard enough, save, and make sensible decisions, you can get out of debt” could only physically work for a bare fraction of the population, given the money-to-debt ratio. The rest would have to simply default to clear the boards.

This is why debt forgiveness makes not only moral but rational, mathematical sense. Finances require balancing to be coherent. There must be some way to redress systemic imbalance. One has to be able to “zero the scales” to get an accurate weight of value and to re-establish healthy value creation.

[...]

...subtle debt extortion creates a system of never-ending debt-slavery for a vast majority of the population. When this “manageable” slavery is aggravated by a desire to use hardship to extort ever greater assets from the overburdened at ever cheaper prices (what Naomi Klein calls “disaster capitalism”), by open and unapologetic widespread fraud, and by the unjust offloading of risk and liability to taxpayers who had nothing to do with poor decisions of private banks, then the systemic abuse is revealed in the daily lives of citizens.

Debt creates scarcity, which stimulates fear, which drives manic competition, which favors opportunism, collusion, and concentrations of power, which translates to abuse, which results in a collapse of legitimacy for the economic system. Overreach causes a breaking point, and we are getting close to it. Will the response be warfare, taxpayer revolt, political upheaval, mass default, debt forgiveness, something other, some combination? I have predicted pockets of violence would be mixed with some softer combination of taxpayer revolt, mass default, political upheaval, and debt forgiveness, along with a return to community exchange to meet basic needs.

Last update: 2011-09-04 10:56