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Macro Thoughts

Analysis, Ideas and Reflections on Macroeconomic Topics

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U.S. Personal Saving Rate

As of April 2020.

U.S. Bureau of Economic Analysis
retrieved from FRED, Federal Reserve Bank of St. Louis, June 3, 2020.

We’re Fighting Deflation, Not Causing Inflation… Yet

"While sweeping policy response is probably better considering the scope of the current crisis, it’s fair to wonder about the longer-term implications of these extreme and unconventional measures."

Brian L. Giuliano, CFA, Vice President, Portfolio Management
Brandywine Global, Around the Curve, June 1 2020

Walks a bit like a ‘v’, talks a bit like a ‘v’ but this is not a ‘v’.

Germany’s most prominent leading indicator just staged a strong comeback but the route to normalcy remains long.

Carsten Brzeski, Chief Economist, Eurozone and Global Head of Macro
ING, Snap, Germany: This is not a ‘v’, 25 May 2020

The quantity theory of wealth, continued

Simon Ward, Economic Adviser
Janus Henderson Investors, May 2020

The quantity theory of wealth

G7 annual broad money growth is the highest since the 1970s. The consensus argues that this will not be reflected in strong nominal GDP growth and / or rising asset prices because of a faster fall in the velocity of circulation, which has been in trend decline for 50+ years.

Simon Ward, Economic Adviser
Janus Henderson Investors, May 2020

Global Trade Volumes Reflect the Pause in Globalization

"Moreover, in the years since the global financial crisis, international trade has been a less powerful engine of economic growth."

Nathan Sheets, PhD Chief Economist, Head of Global Macroeconomic Research
PGIM Fixed Income, Globalization 2.0—A New Synthesis, Haver Analytics, May 2020

Stocks and Unemployment’s Relationship Hasn’t Changed

Our thoughts on a novel way some news coverage has displayed unemployment.

Editorial Staff
Fisher Investments MarketMinder, May 11 2020

BoJ Conduct of Monetary Policy

"In addition, in order to maintain stability in financial markets, the Bank has enhanced the U.S. dollar funds-supplying operations, actively purchased exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs), and conducted further active purchases of Japanese government bonds (JGBs) and treasury discount bills (T-Bills)."

Haruhiko Kuroda, Governor of the Bank of Japan
Bank of Japan, Semiannual Report on Currency and Monetary Control, May 12, 2020

An unusual downturn: services have taken a sizeable hit

"The services sector has taken a much greater hit during the COVID-19 crisis than has typically been the case in past downturns, and it is the largest contributor to global GDP."

Kirsty Clark
M&G, The Equities Forum, The Shape of U?, 01 May 2020

Capital Wars - The Rise of Global Liquidity

Economic cycles are driven by financial flows, namely quantities of savings and credits, and not by high street inflation or interest rates. Their sweeping destructive powers are expressed through Global Liquidity, a $130 trillion pool of footloose cash. Global Liquidity describes the gross flows of credit and international capital feeding through the world’s banking systems and wholesale money markets.

Michael J. Howell
Palgrave Macmillan, 2020
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