CAMBRIDGE FORECAST GROUP: COMMENT NUMBER 2 ON “PROSPECTS FOR THE UNITED STATES AND THE WORLD”

February 27, 2009 at 2:10 pm | Posted in Development, Financial, Globalization, History, Research, Third World, USA, World-system | Leave a comment

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CAMBRIDGE FORECAST GROUP:

COMMENT # 2 ON “PROSPECTS FOR THE UNITED

STATES AND THE WORLD”

In the current The Levy Economics Institute of Bard College “Strategic Analysis,” called “PROSPECTS FOR THE UNITED STATES AND THE WORLD: A CRISIS THAT CONVENTIONAL REMEDIES CANNOT RESOLVE” BY WYNNE GODLEY, ET AL, we read:

“Fiscal policy alone cannot, therefore, resolve the current crisis. A large enough stimulus will help counter the drop in private expenditure, reducing unemployment. But it will bring back a large and growing imbalance, which will keep world growth on an unsustainable path.”

(page 4)

“…however well coordinated, this approach will not be sufficient.”

(page 5)

“It is inconceivable that such a large rebalancing would occur without a drastic change in the institutions responsible for running the world economy—a change that would involve placing far less than total on market forces.”

(page 5)

CAMBRIDGE FORECAST GROUP COMMENT:

Translated into American/world policy, this means that the current crisis can only be solved at the global level by a redesign of the global economy itself.

This will mean the Third World  as the locomotive and Development as the engine.

The main blockage in the way, the global “traffic jam”, is political and caused by the neocon and Israeli insistence on swallowing Palestine and the inability of Washington to come to grips with this.

The absence of a Palestinian state means that global politics is blocked and the global coordination required for a redesign of the global economy is impossible.

Thus the main obstacles to climbing out of the current downward spiral in the U.S/world economy are two:

  1. understanding the new locomotive/engine/caboose arrangement as explained above

  2. neocon/Israel blocking of Palestine and the parallel political subjugation of Washington by this grouping.

Thus the deep blockage is historical and political first and then economic.

Go To:

CAMBRIDGE FORECAST GROUP: COMMENT ON “PROSPECTS FOR THE UNITED …

MAIN WEBSITE: WWW.CAMBRIDGEFORECAST.ORG « Cambridge Forecast Group

CLICK ON “BACKGROUND ESSAYS” in the TABLE

OF CONTENTS ON THE LEFT SIDE OF THE SCREEN

CFG Comment:

global “traffic jam”

“It is inconceivable that such a large rebalancing would occur without a drastic change in the institutions responsible for running the world economy…”

“large and growing imbalance, which will keep world growth on an unsustainable path”

CAMBRIDGE FORECAST GROUP: COMMENT # 2

ON “PROSPECTS FOR THE UNITED STATES AND THE

WORLD”

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CAMBRIDGE FORECAST GROUP: COMMENT ON “PROSPECTS FOR THE UNITED STATES AND THE WORLD”

February 27, 2009 at 5:24 am | Posted in Development, Economics, Financial, Globalization, History, Research, Third World, World-system | Leave a comment

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PROSPECTS FOR THE UNITED STATES AND THE

WORLD: A CRISIS THAT CONVENTIONAL

REMEDIES CANNOT RESOLVE

In the current LEVY ECONOMICS INSTITUTE OF

BARD COLLEGE “Strategic Analysis”, we read:

PROSPECTS FOR THE UNITED STATES AND THE

WORLD: A CRISIS THAT CONVENTIONAL

REMEDIES CANNOT RESOLVE

Wynne Godley, et al (“Strategic Analysis”)

The prospects for the U.S economy have become uniquely dreadful, if not frightening. In this paper we argue, as starkly as we can, that the United States and the rest of the world’s economies will not be able to achieve balanced growth and full employment unless they are able to agree upon and implement an entirely new way of running the global economy.”

Comment by Cambridge Forecast Group:

As we have been arguing since the late 1970’s, the world economy “wants” to transition to a Third World locomotive for the world economy, driven by a Developmental engine.

Trying now, once again, to make American-led Western consumption the locomotive, based on an American consumption engine, is a “humpty-dumpty” misunderstanding and a “wrong-way Corrigan” misdirection.

GO TO:

CAMBRIDGE FORECAST GROUP: GLOBALIZATION’S FUTURE LOCOMOTIVE …

CAMBRIDGE FORECAST GROUP: WORLD ECONOMY BIG PREDICTION BOOK …

CAMBRIDGE FORECAST GROUP: GLOBALIZATION AND RELINKING VERSUS …

CAMBRIDGE FORECAST GROUP: GLOBALIZATION ESSAY BY L. FEINER …

CAMBRIDGE FORECAST GROUP: CFG NEWSLETTER NUMBER 1 JUNE 1979 MEGA …

CAMBRIDGE FORECAST GROUP: INTRODUCTION « Cambridge Forecast Group Blog

GLOBALIZATION: DEEP STUCTURE II « Cambridge Forecast Group Blog

CAMBRIDGE FORECAST GROUP: THE MCLAUGHLIN GROUP PONDERS GLOBALISM …

“to agree upon and implement an entirely new way

of running the global economy.”

PROSPECTS FOR THE UNITED STATES AND THE WORLD: A

CRISIS THAT CONVENTIONAL REMEDIES CANNOT RESOLVE

CFG Comment

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BANK FOR INTERNATIONAL SETTLEMENTS BIS REVIEW NO. 22: BERNANKE REPORT PLUS GLOBAL RECESSION

February 26, 2009 at 4:12 pm | Posted in Economics, Financial, Globalization, Research | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 22 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

Thu 2/26/09

Please find BIS Review No 22 attached as an Adobe Acrobat (PDF) file.

Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 22 (26 February 2009)

Ben S Bernanke: Semiannual Monetary Policy Report to the Congress

Mario Draghi: The global recession

Jean-Claude Trichet: Remarks on the future of European financial regulation and supervision

Ingimundur Friðriksson: The banking crisis in Iceland in 2008

Savenaca Narube: A voice of reason – the writings of Savenaca Siwatibau

please e-mail press.service@bis.org.

BIS Review

Bank for International Settlements

BIS Review No 22 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

http://www.bis.org/review/index.htm

Thu 2/26/09

KANSAS CITY FED: THREE NEW RESEARCH PAPERS

February 26, 2009 at 3:50 am | Posted in Economics, Financial, Globalization, Research, USA | Leave a comment

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The Federal Reserve Bank of

Kansas City

Three New Research Working Papers

are now available‏

KC Fed Update (KCFedUpdate@kansascityfed.org)

Wed 2/25/09

The following information is now available on the Federal Reserve Bank of Kansas City’s Web site:

The Federal Reserve Bank of Kansas City invites you to view the three latest additions to our Research Working Paper Series:

“Decomposing the Declining Volatility of Long-Term Inflation Expectations”

Since the mid-1990s, movements in inflation and economic activity have come to play a larger role in the variability of long-term inflation expectations. http://www.kansascityfed.org/Publicat/Reswkpap/RWP09-05.htm?ealert=RWP0224

“Time Variation in the Inflation Passthrough of Energy Prices”

Estimates of a model that allows continual change over time in coefficients and shock variances show that the pass-through of energy prices to core inflation fell sharply between 1975 and 1985 and has remained near zero since then. http://www.kansascityfed.org/Publicat/Reswkpap/RWP09-06.htm?ealert=RWP0224

“Payday Loan Pricing”

Do competition and regulation constrain the high prices of payday loans? http://www.kansascityfed.org/Publicat/Reswkpap/RWP09-07.htm?ealert=RWP0224

For additional information, visit the Federal Reserve Bank of Kansas City’s Web site. http://www.kansascityfed.org

The Federal Reserve Bank of Kansas City

Three New Research Working Papers are now

available‏

KC Fed Update (KCFedUpdate@kansascityfed.org)

http://www.kansascityfed.org

Wed 2/25/09

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BANK FOR INTERNATIONAL SETTLEMENTS BIS REVIEW NO. 21: EUROPEAN CENTRAL BANK

February 25, 2009 at 3:26 pm | Posted in Economics, Financial, Globalization, Research, Third World, World-system | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 21 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

Wed 2/25/09

Please find BIS Review No 21 attached as an Adobe Acrobat (PDF) file.

Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 21 (24 February 2009)

Jean-Claude Trichet: The ECB’s response to the crisis

Glenn Stevens: Financial crisis developments – impact on the Australian economy

Mohammed Laksaci: Financial system developments in Algeria – resilience and risks in the face of the international financial crisis and its spillover effects

Shamshad Akhtar: Launch of microfinance initiatives

John Gieve: Seven lessons from the last three years

please e-mail press.service@bis.org.

BIS Review

Bank for International Settlements

BIS Review No 21 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

http://www.bis.org/review/index.htm

Wed 2/25/09

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“BALANCE SHEET RECESSION”: RICHARD KOO BOOK

February 25, 2009 at 1:09 am | Posted in Books, Economics, Financial, Japan, Research | Leave a comment

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Balance Sheet Recession: Japan’s Struggle with Uncharted

Economics and its Global Implications

by Richard C. Koo (Author)

Editorial Reviews

Product Description

In this groundbreaking book, leading international economist, Richard Koo argues that far from being the sick man of Asia, Japan is suffering from a temporary but highly unusual economic aberration.

Economists and business commentators have always assumed that the majority of companies in any economy are forward looking and are trying to maximize profits. They never considered the possibility that a vast majority of companies may be placing their highest priorities on minimizing debt in order to repair their balance sheets. But that remote possibility has been the reality in Japan for the past decade, and more recently in many other countries including at least a part of the US.

Balance Sheet Recession argues that contrary to popular belief, it is this massive shift in corporate behavior, instead of structural problems, that is the root cause of both the deflation and the non-performing loan problems that have troubled Japan for so long. It argues that when the causality runs from the corporate balance sheet problems to deflation and banking problems, a highly unconventional policy response is needed to stabilize the economy. After all, the last time anything similar has happened was the 1930s in the US.

Richard Koo’s experience in dealing with both the US banking crisis of the early 1980s and the Japanese balance sheet and banking problems of the last ten years makes him unique qualified to comment on this situation. He clearly explains how such a recession can happen in any economy following an asset price bubble, and how best to deal with it.

About the Author
Richard C. Koo is the Chief Economist of Nomura Research Institute, the research arm of Nomura Securities, the leading securities house in Japan. Consistently voted as one of the most reliable economists by Japanese capital and financial market participants for nearly a decade, he has also advised successive prime ministers on how best to deal with Japan’s economic and banking problems. He served as an economist with the Federal Reserve Bank of New York, and was a Doctoral Fellow of the Board of Governors of the Federal Reserve System. Author of many books and a visiting professor of Waseda University, he was awarded the Abramson Award by the National Association of Business Economics, Washington, D. C. for 2001.

Product Details:

  • Hardcover: 280 pages

  • Publisher: Wiley

  • October 24, 2003

  • Language: English

  • ISBN-10: 0470821167

  • ISBN-13:978-0470821169

Balance Sheet Recession: Japan’s Struggle with

Uncharted Economics and its Global Implications

by Richard C. Koo (Author)

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THREE INDICATORS: TED SPREAD VIX LIBOR-OIS

February 25, 2009 at 12:27 am | Posted in Economics, Financial, Globalization, History, Research | Leave a comment

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TED SPREAD VIX LIBOR-OIS

The TED spread is the difference between the interest rate on three-month Treasury bills and three-month LIBOR, the rate banks charge on loans to each other.

The TED spread is an indication of lack of trust in financial markets; its widening is a sign that things are going badly.

Ted is a measure of credit risk. The higher the number, the more hampered the economy is,

The VIX is an index which measures investor fear. As a volatility index, the VIX tries to measure the market’s expectation of change in the S&P 500 over the next month.

VIX is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index options. A high value corresponds to a more volatile market and therefore more costly options, which can be used to defray risk from volatility.

If investors see high risks of a change in prices, they require a greater premium to insure against such a change by selling options.

Often referred to as the fear index, it represents one measure of the market’s expectation of volatility over the next 30 day period.

Libor-OIS remains a barometer of fears of bank insolvency.

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CAPITAL ASSISTANCE PROGRAM: FED TREASURY JOINT STATEMENT

February 23, 2009 at 3:38 pm | Posted in Economics, Financial, Research, USA | Leave a comment

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Joint Statement by the Treasury

FDIC, OCC, OTS, and the Federal

Reserve on the Capital Assistance Program‏

Federal Reserve Board Notification

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue NW · Washington DC 20551 · Phone: 202-452-3000

Mon 2/23/09

Joint Statement by the Treasury, FDIC, OCC, OTS, and the Federal Reserve on the Capital Assistance Program

http://www.federalreserve.gov/newsevents/press/bcreg/20090223a.htm

Released by the Board of Governors of the Federal Reserve System

Schedule of upcoming postings to the Board’s website
List of items posted to the Board’s website over the past two weeks

If you have any questions or problems e-mail support@govdelivery.com for assistance.

Visit us on the web at www.federalreserve.gov.

20th Street and Constitution Avenue NW · Washington DC 20551 · Phone: 202-452-3000

Joint Statement by the Treasury, FDIC, OCC, OTS, and

the Federal Reserve on the Capital Assistance Program‏

Federal Reserve Board Notification

www.federalreserve.gov

Board of Governors of the Federal Reserve System

Mon 2/23/09

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BANK FOR INTERNATIONAL SETTLEMENTS: BIS REVIEW NO. 20: CENTRAL BANKING IN THE 21ST CENTURY

February 23, 2009 at 2:55 pm | Posted in Asia, Economics, Financial, Globalization, History, India, Research, Third World, World-system | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 20 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

Mon 2/23/09

Please find BIS Review No 20 attached as an Adobe Acrobat (PDF) file.

Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 20 (23 February 2009)

Zdeněk Tůma: Frontiers of monetary policy

Duvvuri Subbarao: Impact of the global financial crisis on India – collateral damage and response

Zeti Akhtar Aziz: Central banking in the 21st century – implications of economic and financial globalisation

Amando M Tetangco, Jr: The Philippine economy – building resilience in a time of uncertainty

Lorenzo Bini Smaghi: Looking beyond the euro’s first decade

please e-mail press.service@bis.org.

BIS Review

Bank for International Settlements

BIS Review No 20 available

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

http://www.bis.org/review/index.htm

Mon 2/23/09

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BANK FOR INTERNATIONAL SETTLEMENTS BIS REVIEW NO. 19: BERNANKE ON FED’S BALANCE SHEET PLUS ISLAMIC FINANCE VIA HONG KONG

February 21, 2009 at 7:41 pm | Posted in Economics, Financial, Globalization, Islam, Research, World-system | Leave a comment

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BIS Review

Bank for International Settlements

BIS Review No 19 available‏

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

Sat 2/21/09

Please find BIS Review No 19 attached as an Adobe Acrobat (PDF) file.

Alternatively, you can access this BIS Review on the Bank for International Settlements’ website by clicking on http://www.bis.org/review/index.htm.

What’s included?

BIS Review No 19 (20 February 2009)

Ben S Bernanke: Federal Reserve policies to ease credit and their implications for the Fed’s balance sheet

Ewald Nowotny: Real implications of the financial turmoil – strategies for growth and stability

Charles Bean: The economic outlook

Lars E O Svensson: Monetary policy with a zero interest rate

Eddie Yue: Hong Kong: the natural gateway to Islamic finance in Asia – current developments

please e-mail press.service@bis.org.

BIS Review

Bank for International Settlements

BIS Review No 19 available

Press, Service (Press.Service@bis.org)

Publications, Service (Publications@bis.org)

http://www.bis.org/review/index.htm

Sat 2/21/09

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