PODE SALVAR-SE A EUROPA COM A DESVALORIZAÇÃO DO EURO?

O euro celebra este mês o 16º aniversário e a  pergunta é colocada aqui, numa altura em que a cotação da moeda única europeia contra o dólar atingiu o valor mais baixo ($ 1,15512) nos últimos dez anos. A inesperada decisão do Banco Nacional da Suiça tomada na passada quinta-feira de abandonar a intervenção no mercado de divisas iniciada em meados de 2011, veio confirmar a antecipação de uma desvalorização inevitável com o anunciado programa do BCE de aquisição de dívida pública de menor risco. 

Pode esta desvalorização ajudar à reanimação das economias europeias, e não apenas as da zona euro considerando a colagem da generalidade das outras moedas ao euro, e, mais alargadamente, à economia global? Não é garantido. E não é garantido porque, apesar da desvalorização da moeda única ser, praticamente, agora a único mola capaz de funcionar no ambiente estagnado em que se deixou cair a Europa, as probabilidades de sucesso, segundo os analistas citados no artigo que refiro, são indecisas.

Em todo o caso, a desvalorização do euro vai, certamente, proporcionar às exportações portuguesas ganhos, transitórios como todos os ganhos de competitividade monetária. Tendo, por outro lado, caído as cotações do crude para níveis não previsíveis há alguns meses atrás, o efeito da desvalorização sobre as exportações e importações portugesas será significativamente positivo. Será? Ou seria? As últimas notícias sobre as restrições de Angola às importações de Portugal é um dos vários factores que podem afectar negativamente algum optimismo das expectativas.

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Correl . - The eurozone : a strained bond

NAPOLEÃO E JOSEFINA

Guilherme d'Oliveira Martins: Sair do euro condenaria Portugal "à mediocridade" (aqui)

Michael Spence, Nobel da Economia em 2001 afirma que Portugal ou a Grécia poderão querer sair do euro e a UE deve estar preparada (aqui)

Vítor Bento : Sou contra a saída do euro,  mas devemos discutir esse cenário (aqui)

Amaral é a favor (aqui), Martins é contra, Bento também é contra, Michael Spence pensa (ou calcula?) que a saída é provável e que é preciso prepará-la. Uma pequena amostra dos pró e contra a saída de Portugal da Zona Euro.

São muitos os que alinham de um lado ou do outro mas, até hoje, não é conhecido um trabalho que possa orientar uma discussão pública com alguns fundamentos sólidos. Quando Vítor Bento afirma que "devemos discutir esse cenário" não está, certamente, a pensar na generalidade dos cidadãos deste país cujo futuro estará sempre muito condicionado pela unidade de conta do que recebe e do que paga. A generalidade dos cidadãos, perante as posições públicas de pessoas que, em princípio, são melhor informadas, só pode estar confundida. Quem não estaria?

"Precisamos do projecto do euro, não por razões meramente económicas mas por razões políticas. Caso contrário, estaremos condenados à periferia, à mediocridade e à irrelevância", afirmou Oliveira Martins, ministro das Finanças na altura da introdução das notas e moedas do euro (2002) e actual presidente do Tribunal de Contas.

Em entrevista à agência Lusa, Guilherme d'Oliveira Martins diz que, mesmo tendo em conta a crise financeira que agora afecta o país, valeu a pena para Portugal integrar a Zona Euro. "Julgo que não há dúvidas relativamente a isso. Basta ver os números, a evolução no que se refere a grandes tendências de convergência", diz o antigo ministro das Finanças. "Creio que estes dez anos são para celebrar."  Oliveira Martins prevê que o euro será "duradouro", apesar das dificuldades conjunturais e de uma "tendência que pode ocorrer" no sentido da "progressiva irrelevância" das economias europeias. "O projecto do euro não é irreversível, não há nenhum projecto humano que o seja, mas está para durar", afirma o presidente do Tribunal de Contas. "Costumo perguntar aos meus alunos se o euro é uma moeda forte ou fraca; todos me dizem que é forte. É uma moeda respeitada internacionalmente. Esperemos que seja a base para uma economia mais segura."  Oliveira Martins rejeita igualmente a ideia de que voltar a ter moeda própria poderia ajudar Portugal a superar a crise económica. Os efeitos positivos da desvalorização cambial, argumenta, são muito exagerados pelos seus defensores. "Essa política das desvalorizações, que muitas vezes se invoca como espécie de [saída para a crise], não corresponde de modo algum a uma salvação", afirma. Optar por essa via "seria apenas aceitar a periferia e a irrelevância".

Destaco: Segundo o professor Martins, o euro é uma moeda forte porque os seus alunos assim o dizem; Os efeitos da desvalorização cambial são muito exagerados pelos seus defensores; Julga que não há dúvidas que estes dez anos são para celebrar, concluindo-se daqui que o professor Martins não ouve ou não lê o professor Amaral.

Por que não se convoca um conclave de gente competente mas de opinião diferente, sustentados a pão e laranjas até sair fumo branco? Assim, enquanto baralham o cidadão comum, sangram o País. Não percebem isto?

DABLIÚ - 3

Este é o terceiro apontamento neste caderno sobre o famigerado dabliú.  A primeira vez, aqui, sobre um artigo de Nouriel Roubini alertando para a eventualidade do preço das commodities vir a fazer mergulhar a economia norte-americana numa nova recessão dentro de pouco tempo, e, um mês depois, um alerta de Stiglitz, aqui, para o mesmo mergulho, em consequência do recrudescimento das operações especulativas nas bolsas, prevendo Stiglitz que, provavelmente, escapariam à prova a  Àsia e a Europa. 

Nouriel Roubini, incansável na sua missão de avisar o mundo, volta de novo a dizer como pode ser evitada a "Double-Dip Global Recession". *

Vale a pena ler o que nos diz agora o guru.

There is an ongoing debate among global policymakers about when and how fast to exit from the strong monetary and fiscal stimulus that prevented the Great Recession of 2008-2009 from turning into a new Great Depression. Germany and the European Central Bank are pushing aggressively for early fiscal austerity; the United States is worried about the risks of excessively early fiscal consolidation.

In fact, policymakers are damned if they do and damned if they don’t. If they take away the monetary and fiscal stimulus too soon – when private demand remains shaky – there is a risk of falling back into recession and deflation. While fiscal austerity may be necessary in countries with large deficits and debt, raising taxes and cutting government spending may make the recession and deflation worse.

On the other hand, if policymakers maintain the stimulus for too long, runaway fiscal deficits may lead to a sovereign debt crisis (markets are already punishing fiscally undisciplined countries with larger sovereign spreads). Or, if these deficits are monetized, high inflation may force up long-term interest rates and again choke off economic recovery.

The problem is compounded by the fact that, for the last decade, the US and other deficit countries – including the United Kingdom, Spain, Greece, Portugal, Ireland, Iceland, Dubai, and Australia – have been consumers of first and last resort, spending more than their income and running current-account deficits. Meanwhile, emerging Asian economies – particularly China – together with Japan, Germany, and a few other countries have been the producers of first and last resort, spending less than their income and running current-account surpluses.

Overspending countries are now retrenching, owing to the need to reduce their private and public spending, to import less, and to reduce their external deficits and deleverage. But if the deficit countries spend less while the surplus countries don’t compensate by savings less and spending more – especially on private and public consumption – then excess productive capacity will meet a lack of aggregate demand, leading to another slump in global economic growth.

So what should policymakers do? First, in countries where early fiscal austerity is necessary to prevent a fiscal crisis, monetary policy should be much easier – via lower policy rates and more quantitative easing – to compensate for the recessionary and deflationary effects of fiscal tightening. In general, near-zero policy rates should be maintained in most advanced economies to support the economic recovery.

Second, countries where bond-market vigilantes have not yet awakened – the US, the UK, and Japan – should maintain their fiscal stimulus while designing credible fiscal consolidation plans to be implemented later over the medium term.

Third, over-saving countries like China and emerging Asia, Germany, and Japan should implement policies that reduce their savings and current-account surpluses. Specifically, China and emerging Asia should implement reforms that reduce the need for precautionary savings and let their currencies appreciate; Germany should maintain its fiscal stimulus and extend it into 2011, rather than starting its ill-conceived fiscal austerity now; and Japan should pursue measures to reduce its current-account surplus and stimulate real incomes and consumption.

Fourth, countries with current-account surpluses should let their undervalued currencies appreciate, while the ECB should follow an easier monetary policy that accommodates a gradual further weakening of the euro to restore competiveness and growth in the eurozone.

Fifth, in countries where private-sector deleveraging is very rapid via a fall in private consumption and private investment, the fiscal stimulus should be maintained and extended, as long as financial markets do not perceive those deficits as unsustainable.

Sixth, while regulatory reform that increases the liquidity and capital ratios for financial institutions is necessary, those higher ratios should be phased in gradually to prevent a further worsening of the credit crunch.

Seventh, in countries where private and public debt levels are unsustainable – household debt in countries where the housing boom has gone bust and debts of governments, like Greece’s, that suffer from insolvency rather than just illiquidity – liabilities should be restructured and reduced to prevent a severe debt deflation and contraction of spending.

Finally, the International Monetary Fund, the European Union, and other multilateral institutions should provide generous lender-of-last-resort support in order to prevent a severe deflationary recession in countries that need private and public deleveraging.

In general, deleveraging by households, governments, and financial institutions should be gradual – and supported by currency weakening – if we are to avoid a double-dip recession and a worsening of deflation. Countries that can still afford fiscal stimulus and need to reduce their savings and increase spending should contribute to the global current-account adjustment – via currency adjustments and expenditure increases – in order to prevent a global shortage of aggregate demand.

Failure to implement such coordinated policy measures – to sustain global aggregate demand at a time when deflationary trends are still severe in advanced economies – could lead to a very dangerous and damaging double-dip recession in advanced economies. Such an outcome would cause another bout of severe systemic risk in global financial markets, trigger a series of contagious sovereign defaults, and severely damage the growth prospects of emerging-market economies that have so far experienced a more robust recovery than advanced countries.
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Uma tradução deste artigo encontra-se aqui.

HÁ VIDA PARA LÁ DA DÍVIDA?

The age of easy credit and its aftermath

Is there life after debt?

Rich countries borrowed from the future. Paying the bill will be difficult, and so will living in a thriftier world

more

A EUROPA CONTADA AOS AMERICANOS

clicar para aumentar

A challenge to unity

Central bank faces threats to the euro and Europe 
by Neil Irwin

For an entire generation of European leaders, the euro coins jangling in their pockets are more than just a currency. They are a powerful driver of political unity on a continent where people speak more than two dozen languages and spent much of the 20th century fighting each other.

Now, as the euro faces a challenge like none before, the question is whether it will last.

The debt crisis that began in Greece and menaces half a dozen other European nations has caused the euro to lose 15 percent of its value relative to the dollar since January. Some economists consider it obvious that the currency union will not survive in its present form, that one or more southern European nations will end up reverting to liras, pesetas and drachmas.

That leaves the future of European unity to be decided not merely by politicians in Paris, Berlin and other capitals, but in a glass skyscraper in this banking hub, by a French banker named Jean-Claude Trichet and his 1,600 employees. Less than a decade after cash machines across the continent started spitting out the same currency -- and less than a month after it laid the cornerstone for a new permanent headquarters -- the European Central Bank is facing extraordinary pressure to keep the euro, and Europe, together.

The bank has crossed into virgin territory in response to the crisis, buying billions of euros' worth of government bonds to try to stabilize markets. But those actions have unleashed new tensions at the heart of the ECB as its largest member, Germany, recoils from what it sees as a violation of the most deeply held principles of central banking.

The challenge

The ECB's challenge is to craft one policy that will work for in 16 member countries from Finland to Portugal, which have different economic conditions -- and views about inflation and employment.

Trichet testified Monday that a broad new strategy of cooperation -- perhaps involving stronger restrictions on government deficits and new means of helping troubled states -- is the key to Europe's economic future. He told the European Parliament that he envisions "the equivalent of a fiscal federation," which would "require a quantum leap in terms of progress" toward a stronger economic union.

In their effort to hold Europe together, Trichet and his colleagues have upended the traditional rules under which they operate, taking a page from the playbook that Chairman Ben S. Bernanke used at the U.S. Federal Reserve during the financial crisis. But these efforts have exposed new strains within the organization, complicating their efforts.

Early last month, the European debt crisis spiked and markets turned hard against Spain, Portugal, Italy and Ireland, significantly increasing their cost for financing government spending. One solution would be for the ECB to intervene in the market, buy some of those countries' bonds and thus force down the price of borrowing money.

But the ECB has no authority to buy government debt, a power that other central banks, such as the Federal Reserve and Bank of England, have. That restriction reflects deep German opposition to any policies that carry a risk of fueling inflation, borne of the hyperinflation in that country in the 1920s. The rules are meant to prevent the ECB, which is modeled after the German national bank, from essentially printing money to lend to national governments. German politicians and economists were aghast at the idea of compromising that core principle because of, in their view, the fiscal profligacy of a few euro member states.

As the situation grew dire, however, Trichet and his colleagues decided that the goal of European unity was more important.

The compromise: They would buy bonds on the open market, not directly from governments, getting around the prohibition on funding government debt. At the same time, they would take other steps to avoid increasing the money supply, thus easing any inflationary pressures.

Announced in conjunction with a $1 trillion European Union program to backstop governments' debts, the actions worked to stop the free fall in debt markets, and European financial markets have been more stable since the announcement.

 

But speculation remained rampant, especially in Germany, that the program was a backdoor way to print money for free-spending Greek, Portuguese and Spanish governments. The blowback from Germany has been immense.

German blowback

Axel Weber, the head of the German national bank and a member of the ECB governing council, said in a newspaper interview that he sees the decision "in a critical way" because of the risks that it could undermine long-term economic stability.

After fighting back one threat to the euro, Trichet and his eventual successor now must deal with another: German frustration.

"Euro area governments have effectively thrown away the rulebook," said Volker Wieland, an economist at Goethe University Frankfurtand a leading ECB-watcher. "It's a complete regime change. No-bailouts and individual fiscal responsibility have been replaced with mutual guarantees" for government debt.

These tensions, in part, reflect decisions made by European leaders almost two decades ago. Instead of waiting to adopt the euro until European countries had grown more integrated with each other, making a currency zone easier to administer, the leaders decided to move ahead. They calculated that having a single currency would bring the countries closer together, leading to better collaboration on everything from the environment to defense policy.

This mission gives the ECB a political importance that is in some ways greater than that of its counterparts overseas, such as the Fed. The ECB is designed from the ground up to achieve that unity. The bank keeps minutes of policy meetings secret for 30 years, in contrast with the Fed, which releases minutes three weeks later. The ECB's aim is to allow policymakers to advocate what they think is best for the euro area as a whole, freeing them from public pressure to represent their nations' interests.

With Trichet's eight-year term expiring late next year, followers of the ECB see Weber as the most likely successor because he is the most powerful central banker in the largest eurozone country. Other European leaders might worry, though, whether he will be flexible enough to keep the euro together.

But even as the debt crisis has cast Europe's fissures into high relief, it has reminded European leaders of how much they stand to lose if these divisions are left unaddressed.

"The stakes are so high, I think the incentives are high to sort it out," said Michael Dicks, chief economist of Barclays Wealth. "That's the biggest silver lining. That's why you are seeing huge pressure to do what Europe has never done before, which is work together."

QUEM É QUE FALOU EM GUERRA?

A Alemanha é um perigo para a Europa, afirma Soros numa entrevista que registei ontem aqui e aqui. O artigo do Jornal de Negócios que resumia a entrevista acrescentava, em abono da posição de Soros que,

"Mais mordaz foi o Nobel da Economia Paul Krugman. "O mundo não precisa de menos, mas sim de mais programas de apoio à conjuntura, e a política de estabilidade alemã actualmente é o caminho errado". "Só quando a armadilha da depressão estiver afastada é que os governos devem ocupar-se dos défices", disse, sublinhando que "a deflação é um perigo muito maior do que a inflação".

O professor da Universidade de Princeton adverte inclusive para o cenário de uma guerra comercial entre EUA e Europa. "Se o euro passar a ter paridade com o dólar, os europeus vão ficar admirados com a s exigências que o Congresso dos EUA fará, e eu apoiarei", vaticinou. "Não permitiremos que alguns países exportem a sua política de austeridade e façam aumentar o desemprego nos Estados Unidos", alertou ainda Krugman.

A reacção dos alemães às contundências de Krugman não se fizeram esperar. Como pode constatar-se  aqui, a opinião de Krugman acerca da política mais conveniente neste momento depende do ponto de vista do observador. E a de Krugman é muito clara nos seus propósitos. Aos EUA não convém que o euro se desvalorize a ponto de favorecer as exportações da Europa e, em particular, da Alemanha. Já lhe basta a China e o  persistente atrelado da renminbi ao dólar. 

   

No seu blog, Krugman queixa-se (ou acusa) "They hate me".

Quem se perfila do lado alemão é Trichet: Trichet pede medidas credíveis de consolidação orçamental na Zona Euro.
Os receios de uma recaída grave das economias ocidentais pairam no ar: "Vamos ter um crash algures em 2008, afirma Tim Howkins, CEO do IG Group. Os principais problemas são a crise da dívida pública e os bancos. Bolsas europeias em queda com Grécia e Espanha a liderar as perdas  num dia em que os receios com as dívidas de alguns países da região voltam a penalizar o sentimento dos investidores.

Et pour cause, o Secretário do Estado do Tesouro português entende que o BCE pode reforçar o seu papel no apoio à banca. Supõe-se que onde o SET disse "pode" queria dizer "deve".

Provavelmente, não terá alternativa.

NÓS E OS OUTROS

A crise continua a ameaçar as economias ocidentais e, naturalmente, as medidas de austeridade adoptadas, ou em vias disso, suscitam polémica entre políticos e economistas, defendendo uns que a recuperação económica passa pela redução dos défices fiscais e das dívidas públicas, avisando outros que, nas actuais circunstâncias, a contracção da despesa pública terá inevitavelmente como consequência o agravamento da crise, a deflação, uma peste pior que a inflação.

O artigo de Martin Wolf que transcrevi na íntegra (este meu hábito de transcrição total resulta do facto de não ter subscrição do FT e o acesso ser indirecto) aqui, aborda, uma vez mais, o assunto reforçando a convicção do autor que é cedo para retirar estímulos e que a boa política estará na continuação da emissão de liquidez pelos bancos centrais, contrariando a persistência alemã na redução dos défices públicos (incluindo o da Alemanha) mas também, por exemplo, a do novo governo do Reino Unido (vd aqui ).

Martin Wolf está bem longe de estar isolado nesta sua cruzada. Soros, por exemplo, critica duramente a política de Angela Merkel (vd aqui ). Paul Krugman (vd aqui, por exemplo), Stiglitz, entre outros propõem a continuação de uma intervenção expansionista dos Estados, avisando que a redução precipitada dos défices fiscais poderá ter consequências dramáticas globais nas economias. 

O que é que tudo isto poderá ter a ver connosco? Tem muito, porque envolvidos numa economia aberta, nela se reflictirão as consequências das políticas adoptadas pelos nossos principais parceiros comerciais. 

Por outro lado, o nosso grau de liberdade de escolha encontra-se fortemente condicionado pelas medidas adoptadas pela UE, em particular pela Zona Euro, mas também pelas restrições que impendem sobre a nossa capacidade de razoavelmente aumentarmos os níveis de endividamento público e privado. Porque essa capacidade não somos só nós que a avaliamos mas, sobretudo, os credores externos.

Dito de outro modo: Mesmo que Wolf, Krugman, Soros, Stiglitz, etc. tenham razão, mesmo que o BCE decidisse garantir-nos a liquidez necessária à continuação do crescimento do endividamento do País, faria sentido continuar uma política de auemento da despesa e dos investimentos públicos? Aumentar o investimento faz sempre sentido desde que o retorno esteja muito provavelmente assegurado. Quem pode assegurar?

Mais tarde ou mais cedo as taxas de juro da dívida pública irão subir para além dos níveis preocupantes que já atingiram. Uma política de redução do défice certamente que terá um efeito contraccionista sobre  a economia a curto prazo. A continuaçao de uma política de crescimento da dívida seria uma tragédia a média prazo.

Se a Alemanha expandisse, ganharíamos com isso, certamente. Mas quem é que convence os alemães a gastarem mais do que desejam? 

O QUE DIZ SOROS

"A  Alemanha é um perigo para a Europa"

Sem meias palavras, George Soros aponta o dedo a Berlim e diz que a guinada de austeridade dada pela Alemanha pode “destruir” o euro e o próprio projecto europeu.

SINCRONIZADOS

até a levar a mão ao bolso.

BCE revê em alta perspectivas de crescimento para a zona euro em 2010 dos 0,8%, previstos em Março, para 1%. Por outro lado, baixou as previsões relativas a 2011 que passaram dos anteriores 1,5 por cento para 1,2 por cento, devido ao impacto negativo que terão no crescimento os planos de austeridade recentemente lançados por vários países europeus para o saneamento das contas públicas.

A inflação na Zona Euro deverá crescer para 1,5 por cento, contra os anteriores 1,2 por cento, e, em 2011, as projeções do BCE apontam para 1,6 por cento, face aos 1,5 por cento prognosticados em Março.

O BCE decidiu manter as taxas inalteradas em 1 por cento, Trichet garantiu que a entidade “está inflexivelmente comprometida com a estabilidade dos preços”.
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Merkel, dixit.

OS MALEFÍCIOS DA QUEDA DOS PREÇOS

Fear must not blind us to deflation´s dangers
By Martin Wolf

A consensus is forming that policymakers should tighten fiscal policy, sharply, in countries with large fiscal deficits. Yet what makes these policymakers sure that business and consumers will spend in response to austerity? What if they find that it tips economies into recession, or even deflation?

In last weekend’s communiqué of the Group of 20 leading economies, finance ministers and central bank governors stated that “countries with serious fiscal challenges need to accelerate the pace of consolidation”.Yet the world economy confronts two risks, not one: the first is, indeed, that much of the developed world is going to be Greece; the second is that it will be Japan.

As Adam Posen, outside member of the Bank of England’s monetary policy committee, pointed out in a recent speech, fiscal contraction, along with persistent banking problems and insufficiently loose monetary policy, generated the negative shock in 1997 that entrenched deflation in Japan.* Many economic historians argue that the US made a similar mistake in 1937.

How, I wonder, will the world look back on what is now being planned? Germany’s commitment to greater fiscal austerity across the eurozone is powerful, if hardly surprising. Judged by the UK prime minister’s speech on Monday, the UK is on the same path. Happily, the US has not joined the consensus – as yet.

Japan is stuck firmly in deflation. Germany’s most recent rate of annual core inflation was just 0.3 per cent. In the US, core inflation is 0.9 per cent. Another economic shock could shift these economies into deflation, with all the attendant difficulties of trying to make monetary policy bite in a world of post-bubble deleveraging.

Moreover, despite the heroic efforts of central banks, growth of broad monetary aggregates is subdued, mainly because the transmission mechanism is impaired: over the latest 12-month period, US and eurozone M2 grew just 1.6 per cent. Monetarists should be quite relaxed about the risks of inflation. They should be concerned, instead, that central banks are failing to give the private sector the liquidity it wants.

Against this background, what would a big tightening of fiscal policy deliver? In the absence of effective monetary policy offsets, one would expect aggregate demand to weaken, possibly sharply. Some economists do believe in “Ricardian equivalence” – the notion that private spending would automatically offset fiscal tightening. But, as Mr Posen argues of Japan, “there is no good evidence ... of strong Ricardian offsets to fiscal policy.” In developed countries today, fiscal deficits are surely a consequence of post-crisis private retrenchment, not the other way round.

This is all very well, many will respond, but what about the risks of a Greek-style meltdown? A year ago, I argued – in response to a vigorous public debate between the Harvard historian, Niall Ferguson, and the Nobel-laureate economist, Paul Krugman – that the rapid rise in US long-term interest rates was no more than a return to normal, after the panic. Subsequent developments strongly support this argument.

US government 10-year bond rates are a mere 3.2 per cent, down from 3.9 per cent on June 10 2009, Germany’s are 2.6 per cent, France’s 3 per cent and even the UK’s only 3.4 per cent. German rates are now where Japan’s were in early 1997, during the long slide from 7.9 per cent in 1990 to just above 1 per cent today. What about default risk? Markets seem to view that as close to zero: interest rates on index-linked bonds in the France, Germany, the UK and US are about 1 per cent. What, for that matter, does the spread between conventional and index-linked bonds tell us about inflation expectations? We can say that these are, happily, still well anchored, at about 2 per cent in the US, Germany and France. In the UK, they are somewhat higher.

The question is whether such confidence will last. My guess – there is no certainty here – is that the US is more likely to be able to borrow for a long time, like Japan, than to be shut out of markets, like Greece, with the UK in-between.

As borrowers, the US and UK have advantages: first, their private sector surpluses cover some three-quarters and 90 per cent, respectively, of their fiscal deficits; second, many private-sector investors need assets that match liabilities in their domestic currency; third, because these countries have active central banks, bondholders suffer no significant liquidity risk; fourth, they have floating exchange rates, which take some of the strain of changes in confidence; fifth, they have policy autonomy, which gives a reasonable prospect of near-term economic growth; and, finally, the US offers the world’s most credible reserve asset. That gives the US government the position vis-a-vis the world that the Japanese government possesses vis-a-vis Japanese savers.

Critics could argue that these arguments downplay the risks of a “sudden stop” in financial markets. But risks arise on both sides. When Japan – or Canada or Sweden – tightened in the 1990s, a buoyant world economy could absorb excess domestic supply. There is no world economy big enough to offset renewed contraction in Europe and the US. Concerted fiscal tightening could, in current circumstances, fail: larger cyclical deficits, as economies weaken, could offset attempts at structural fiscal tightening. For countries in southern Europe, this is already a danger. Much of the world could end up in a beggar-my-neighbour position towards an increasingly fiscally stretched US.

The G20 did stress “the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability, differentiated for and tailored to national circumstances.” That seems fair. In so doing, policymakers must recognise that deflation is a risk, too, and that tighter fiscal policy requires effective monetary policy offsets, which may be hard to deliver today, above all in the eurozone.

Premature fiscal tightening is, warns experience, as big a danger as delayed tightening would be. There are no certainties here. The world economy – or at least that of the advanced countries – remains disturbingly fragile. Only those who believe the economy is a morality play, in which those they deem wicked should suffer punishment, would enjoy that painful result.

DILEMA GLOBAL

THE DEFLATION DILEMA (here)
Rich countries must act to prevent prices from falling. That will cause problems for emerging economies

SHOULD you fret more about inflation or deflation? Few questions matter more for investors and policymakers, yet few seem so uncertain. Financial markets are sending mixed signals. Falling yields on Treasury bonds suggest that many investors worry about economic stagnation and deflation; the soaring price of gold points to fears of runaway inflation.

Economists also differ in their assessment of where the greater risks lie, depending largely on the country and time frame they are looking at. Judging by the discussion in a new online forum of more than 50 leading economists from around the world, which The Economist launched this week, deflation is the bigger short-term danger in big, rich economies, whereas inflation is an immediate worry in many emerging economies and, potentially, a longer-term danger in rich ones.

That seems a fair assessment. In America, the euro area and Japan, deflation is either uncomfortably close or a painful reality, despite near-zero interest rates and other efforts by central banks. In the year to April core consumer prices rose by a mere 0.9% in America, the slowest pace in four decades. In the euro area they rose by 0.7%. And in Japan, which has battled falling prices for more than a decade, they fell by 1.5%.

Nor is there much reason to expect a sudden turnaround. Broad measures of money and credit growth are stagnant or shrinking in all three places. Unemployment is high and there are large gaps between the economies’ actual output and their potential. In the euro area, especially, austerity plans will further sap domestic demand. Thankfully, there is unlikely to be a sudden price plunge, not least because ordinary people still expect consumer prices to rise modestly, and these expectations of future inflation help anchor actual prices. But the short-term balance of pressures clearly points downward.

So, too, does the balance of risks. Deflation, if it becomes entrenched, is more dangerous than most forms of inflation. When prices fall consumers put off their purchases in anticipation of even greater bargains later, condemning the economy to a vicious cycle of weak spending and sliding prices. In heavily indebted economies falling prices would increase the real burden of consumers’ and governments’ debts.

Deflation is also harder to fight than inflation. Over the past two decades central bankers have gained plenty of experience in how to conquer excessive price increases. Japan’s ongoing inability to prevent prices falling suggests the opposite task is rather less well understood. Although it is true that heavily indebted governments might be tempted to erode their debts through higher inflation, there are few signs that political support for low inflation is waning (see article).

Add all this together and the world’s big three central banks—in America, the euro zone and Japan—should worry most about falling prices. The scale of budget belt-tightening suggests these banks’ policy rates could stay way down for several years. But this will cause problems elsewhere. Near-zero interest rates in the big, rich economies send capital flooding elsewhere in search of higher yields, making it harder for the healthier countries to keep their economies stable.

Helps here, hurts there

The problem will be most acute in emerging economies. Many are already overheating, with prices rising and asset bubbles inflating. Most have inappropriately loose monetary policy. Real interest rates are negative in two-thirds of the 25 emerging economies tracked by The Economist. Their inflation expectations are less stable, so prices can quickly spiral upwards.

This suggests a need for tighter monetary policy. Central banks in Brazil, Malaysia and elsewhere have begun. But the most important emerging economy, China, pegs its currency to America’s dollar, which limits its ability to raise interest rates. And even those with more flexible exchange rates worry that higher interest rates will send their currencies soaring.

In fact, stronger currencies in emerging markets are a necessary part of the “rebalancing” of the global economy that will allow enfeebled rich economies an escape from deflationary pressure. Tighter fiscal policy in emerging economies would help dampen price pressure. Capital controls should be part of their defences, too, against sudden floods of foreign cash.

History suggests, however, that none of these policies will be a panacea. When monetary conditions in the rich world are loose, emerging economies are prone to lending binges and asset bubbles. The price of avoiding deflation in the rich world today may be a bust in the emerging world tomorrow.

A LATA DA CAIXA

A redução dos rendimentos dos portugueses (e não só dos salários, porquê apenas dos salários?) ou se faz de uma forma abrupta ou é resultante do empobrecimento prolongado. Não parece existir alternativa menos gravosa para a saída do beco em que nos enfiaram, ou nos deixámos enfiar. No primeiro caso, a solução seria socialmente mais justa e melhor direccionada para a recuperação da competitividade perdida pelos sectores produtores de bens e serviços transaccionáveis.

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Mas a adopção dessa medida, susceptível de gerar conflitos sociais dramáticos, só poderia ser levada a bom termo por um governo maioritário pluripartidário, como já várias vezes anotei neste caderno de apontamentos, e deveria ser geral, exceptuando apenas os rendimentos mais baixos.

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A notícia de hoje do Jornal de Negócios* da intenção da administração da CGD pedir o "estatuto de excepção" só prova que os responsáveis pelo banco do Estado estão longe de perceber as dificuldades por que passa o país, uma parte significativa das quais resultou do comportamento de rebanho da Caixa no contexto do sistema financeiro português.

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Por quê a excepção? Terá o senhor Ministro das Finanças a coragem de dizer aos administradores da Caixa que o sector financeiro tem sugado os sectores produtivos, que têm de mostrar no mercado o que valem? E que a Caixa se tem comportado como se nenhuma obrigação lhe coubesse no encaminhamento mais adequado das poupanças dos portugueses para os sectores essenciais ao crescimento económico e social sustentado? E que, pelo contrário, a Caixa tem privilegiado os sectores especulativos (na construção civil, potenciando de vários modos a especulação imobiliária) e os monopólios de facto, de um modo ou de outro já favorecidos por incentivos vários? Que a redução geral de rendimentos se impõe porque também a Caixa se apropriou muito mais do que devia de um bolo global que não cresceu nos últimos doze anos?

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*Caixa quer aumentar salários em 2010
A Caixa Geral de Depósitos (CGD) admite pedir o "estatuto de excepção" para fazer aumentos salariais em 2010, disse hoje à Lusa fonte oficial do banco público, ponderando assim juntar-se à TAP, que já anunciou que vai aumentar ordenados.
Governo congela salários dos gestores e trabalhadores das empresas públicas

ECONOMIA, POLÍTICA, E POLÍTICA ECONÓMICA

Em Junho do ano passado 51 economistas portugueses assinavam um documento defensor das opções do Governo pelo grandes investimentos, em resposta a um documento subscrito por 28 economistas defendendo a suspensão do programa governamental. A falta de meios (ou o crescimento abrupto da dívida) veio retirar a questão de cima da mesa das discussões. Não havendo dinheiro não há vícios.

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Ocorreu-me a lembrança deste confronto economista doméstico a propósito das cartas enviadas ao Financial Times*, subscritas por gente de peso, de entre os quais dois premiados com o Nobel da economia, recomendando que a despesa pública não seja reduzida antes de 2011, em resposta a uma outra carta dirigida ao Sunday Times**, subscrita por gente credenciada, recomendando o contrário. Estes últimos apoiam as propostas do líder da oposição conservadora, os primeiros dão ao actual governo argumentos para evitar políticas restritivas com eleições à vista.

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Onde é que, Economia, pára a tua a virtude?

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*Financial Times letter

**Sunday Times letter

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Supprt for Labour in battle over public debt
By Jean Eaglesham and Daniel Pimlott

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More than 60 leading economists have backed Alistair Darling, UK chancellor of the exchequer, in his decision to delay spending cuts until 2011, creating a dividing line within the profession on the

issue of how to tackle the UK's huge public debt, which will be crucial in the forthcoming general election.
Two letters in today's (02/19) FT warn of the risks of damaging Britain's recovery by "reckless" early cuts. They are a riposte to 20 economists who wrote to The Sunday Times last week supporting the opposition Conservative party's line that fiscal tightening should start this year.
The letters reject the claim that cuts are needed now to reassure the markets and head off the risk of Britain losing its triple-A credit rating.
One, organised by Lord Skidelsky, asks instead how "foreign creditors will react if implementing fierce spending cuts tips the economy back into recession".
The other backs the chancellor's "sensible" plan for tackling the deficit, warning that "with people's livelihoods at stake, a responsible government should avoid reckless actions".
The signatories to the letters include two Nobel Laureates - Joseph Stiglitz and Robert Solow - and five former members of the Bank of England's monetary policy committee, including two former deputy governors. Alan Blinder, a former vice-chairman of the Federal Reserve, is also a signatory.

O QUE DIZ KRUGMAN

The Making of a Euromess

Paul Krugman

Lately, financial news has been dominated by reports from Greece and other nations on the European periphery. And rightly so.
But I’ve been troubled by reporting that focuses almost exclusively on European debts and deficits, conveying the impression that it’s all about government profligacy — and feeding into the narrative of our own deficit hawks, who want to slash spending even in the face of mass unemployment, and hold Greece up as an object lesson of what will happen if we don’t.
For the truth is that lack of fiscal discipline isn’t the whole, or even the main, source of Europe’s troubles — not even in Greece, whose government was indeed irresponsible (and hid its irresponsibility with creative accounting).
No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.
Consider the case of Spain, which on the eve of the crisis appeared to be a model fiscal citizen. Its debts were low — 43 percent of G.D.P. in 2007, compared with 66 percent in Germany. It was running budget surpluses. And it had exemplary bank regulation.
But with its warm weather and beaches, Spain was also the Florida of Europe — and like Florida, it experienced a huge housing boom. The financing for this boom came largely from outside the country: there were giant inflows of capital from the rest of Europe, Germany in particular.
The result was rapid growth combined with significant inflation: between 2000 and 2008, the prices of goods and services produced in Spain rose by 35 percent, compared with a rise of only 10 percent in Germany. Thanks to rising costs, Spanish exports became increasingly uncompetitive, but job growth stayed strong thanks to the housing boom.
Then the bubble burst. Spanish unemployment soared, and the budget went into deep deficit. But the flood of red ink — which was caused partly by the way the slump depressed revenues and partly by emergency spending to limit the slump’s human costs — was a result, not a cause, of Spain’s problems.
And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation.
Now, if Spain were an American state rather than a European country, things wouldn’t be so bad. For one thing, costs and prices wouldn’t have gotten so far out of line: Florida, which among other things was freely able to attract workers from other states and keep labor costs down, never experienced anything like Spain’s relative inflation. For another, Spain would be receiving a lot of automatic support in the crisis: Florida’s housing boom has gone bust, but Washington keeps sending the Social Security and Medicare checks.
But Spain isn’t an American state, and as a result it’s in deep trouble. Greece, of course, is in even deeper trouble, because the Greeks, unlike the Spaniards, actually were fiscally irresponsible. Greece, however, has a small economy, whose troubles matter mainly because they’re spilling over to much bigger economies, like Spain’s. So the inflexibility of the euro, not deficit spending, lies at the heart of the crisis.
None of this should come as a big surprise. Long before the euro came into being, economists warned that Europe wasn’t ready for a single currency. But these warnings were ignored, and the crisis came.
Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger “the mother of all financial crises.” So the only way out is forward: to make the euro work, Europe needs to move much further toward political union, so that European nations start to function more like American states.
But that’s not going to happen anytime soon. What we’ll probably see over the next few years is a painful process of muddling through: bailouts accompanied by demands for savage austerity, all against a background of very high unemployment, perpetuated by the grinding deflation I already mentioned.
It’s an ugly picture. But it’s important to understand the nature of Europe’s fatal flaw. Yes, some governments were irresponsible; but the fundamental problem was hubris, the arrogant belief that Europe could make a single currency work despite strong reasons to believe that it wasn’t ready.

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Euroskeptic, Me

see this

and this

BLACK CURRENCY

DUAL CURRENCY
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“Estamos (ainda) longe disso.”

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O problema, grave, destas coisas é que não são assim tão inconsequentes. Um artigo destes, publicado no Financial Times deu a volta ao mundo em segundos. E, tendo consequências, elas não serão neutras, bem longe disso, para a situação crítica em que Portugal se meteu.

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Percebo perfeitamente a bondade da recomendação mas tenho as maiores dúvidas acerca dos seus méritos: porque não resolve o problema, apenas o mascara.

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Se estamos no euro. e essa presença implica todo um processo de gestão dos preços internos que considere a reavaliação da moeda em que transaccionamos internamente de modo a que obviem as consequências perversas que o V Bento tem repetidamente descrito, pois que se diga isso mesmo ao povo português. E se proceda em conformidade.

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Não é por acaso que a Irlanda, que enfrenta uma situação financeira mais sufocante que a nossa, não entra neste baralho. A resposta parece simples: Fez o que tem de ser feito: reduziu os salários.

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O seu diagnóstico está certo: Se não forem reduzidos de um golpe serão reduzidos lentamente, prolongando dolorosamente o período de ajustamento.Com todas as consequências, incluindo as de maior injustiça social que o V Bento refere. Mas tem outra: No fim do tratamento iniciar-se-á um novo período de recaída.

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O OE para 2010 vai ser aprovado com as abstenções do PSD e do CDS, que não tinham alternativa. Sem uma oposição vertebrada, o OE é um instrumento de compromisso de curto prazo que não compromete as posições partidárias perante os seus eleitorados. Todos satisfeitos, portanto.

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Se este artigo do Financial Times tiver um mérito será o de tocar a rebate junto dos nossos governantes e candidatos a isso. Talvez o ouçam, e arrepiem caminho. Entretanto, muita gente já o ouviu.

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Creio estarmos perante uma situação com alguns contornos parecidos à atribuição de ratings. As agências descredibilizaram-se e contribuíram para a gestação da crise. Mas, para mal dos nossos pecados, os credores continuam a dar-lhes ouvidos.

QUEM É QUE FALOU EM APOCALIPSE?

Inflação ou deflação, a seguir à inundação?
Ninguém sabe ao certo.
Como quanto às virtudes da vacina da gripe:
quanto mais julga que sabe mais sabe o homem a dimensão da sua ignorância.
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On Wall Street: Apocalypse how?
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Confused about what the future holds for the economy? So are financial markets.
Record gold prices and negative US Treasury yields are strange bedfellows, indicating general uneasiness but also conflicting bets on inflation or deflation.
As the great economist Woody Allen once put it: “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly.”
Fear that one’s net worth might evaporate is, of course, no laughing matter. In spite of the fact that risk appetite has come roaring back, it is hard to reconcile resurgent optimism with the eventual fiscal and monetary hangover of the financial crisis.
Voices from beyond Wall Street who foresaw the debacle now range from mildly to wildly pessimistic. Nobody captures the confusion better than the satirical economic country and western singer Merle Hazard (geddit?) crooning about whether we face hyperinflation or deflation: “Will we become Zimbabwe or will we be Japan?”
Unprecedented growth in money supply will unleash higher inflation warns Bob Wiedemer, co-author of the recently published Aftershock, and of the prescient 2006 book America’s Bubble Economy.
Agreeing with him is Michael Panzner, who published Financial Armageddon just as the last boom peaked and followed it up with When Giants Fall: An Economic Roadmap for the End of the American Era.
In the opposite corner is well-known economist and pundit A. Gary Shilling, who was also appropriately bearish before the bust and now sees deflation ahead. Money supply growth and yawning deficits alone will not spark price increases before overly leveraged consumers rebuild their balance sheets and excess global production capacity is soaked up, he says. That may take another decade.
It is hard to be pessimistic in the face of a furious market rebound and harder still when the handful of prognosticators who came out of the crisis with their reputations enhanced cannot agree on what constitutes a haven.
Dr Shilling advises long-term government bonds while Messrs Wiedemer and Panzner would eschew them, preferring hard assets such as precious metals.
There are other authors predicting upheaval, some late to the party. The apparently flexible Harry S. Dent Jr’s latest tome, The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History, released in January, was preceded by The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History, published in 1998. So long Dow 44,000!
Of course it is simpler to be pessimistic as a writer than as an insider. “There’s no upside to being bearish – it’s an occupational hazard both on Wall Street and in Washington,” says Mr Panzner, a stockbroker.
Those who took the risk such as David Rosenberg, Paul Kasriel, Meredith Whitney, Peter Boockvar, Albert Edwards, Jeremy Grantham, Nouriel Roubini and Andrew Smithers remain a pessimistic lot these days but take a less apocalyptic view than purveyors of disaster-lit.
While those already hoarding bullion or cash may not care for the latter, it is worth recalling popular tomes that spooked readers into unnecessary precautions in the past.
Two are 1981’s Survive and Win in the Inflationary Eighties, (recently re-issued) and Surviving the Great Depression of 1990, written after the 1987 stock market crash.
Then again, forewarned is forearmed, and Messrs Wiedemer, Panzner and Shilling are, by no stretch of the imagination, kooks.
“I think people were looking for someone with a long beard and a sign that says: ‘The end is near’ and were surprised to find someone from Wall Street,” says Mr Panzner.
There is no point in being a kneejerk contrarian, says Dr Shilling, who also got his start on Wall Street, but hewing to consensus adds little value. And, while being a pessimist might get one noticed, it is hardly pleasant.
“I’m by nature a very optimistic person,” says Mr Wiedemer. “In a way, I’d rather not be right. I’d support this bubble economy if I didn’t think it’d blow up.”

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Conflicting bets on inflation or deflation
Global markets hit by fresh Dubai jitters
Fujii warns about ‘one-sided’ currency movements

CHUVA TORRENCIAL

Entre o monetarismo e o keynesianismo, a administração Obama escolheu os dois para dominar a crise. É tal a chuva de dólares desencadeada para contrariar a crise que é bem provável que a seguir à seca se siga uma inundação global.

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Treasury Announces $1 Trillion Public-Private Plan to Buy Banks' Bad Debt

The Obama administration unveiled its plan to remove toxic assets from the books of the nation’s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization.

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Dow Climbs Nearly 500 Points on Bank Aid Plan

Investors Send Stocks Surging On Treasury Announcement
Gains amount to a vote of confidence by investors in government program to purchase troubled real-estate related loans and securities from banks.
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Aqui, explicação do crescimento e consequências da massa monetária em circulação.

CONTRA A CORRENTE

Quando toda a gente se preocupa com a deflação que esta crise promete, obrigando os bancos centrais a baixar as taxas de juro até níveis históricos, parece uma ideia de outro mundo falar de inflação e da possibilidade dela estar à espreita no outro lado da esquina. Ainda que, certamente, muito gente veja na ceifeira uma saída do buraco onde se meteu a economia global.

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Pela minha parte, receio que a tentação que, a páginas tantas da crise, se apoderará de muitos para a convidar a entrar submergirá a resistência de uns quantos. Já dediquei ao assunto mais de duas dezenas de apontamentos neste caderno.

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Foi, portanto, sem surpresa, que li na entrevista de Paul Samuelson (um jovem com 93 anos) transcrita na edição desta semana da Visão, o notável economista responder à questão das consequências dos estímulos no crescimento dos preços:

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"Se, numa perspectiva optimista, estivermos com uma taxa de desemprego de 4%, em 2012, os preços serão mais elevados do que hoje, provavelmente crescerão a um ritmo de 2% ao ano, culminando numa taxa de inflação de 8%. Julgo que é preferível à deflação, um problema muito mais preocupante. Dadas as circunstâncias, é melhor errar por excesso, no que toca aos estímulos. Ninguém, no seu perfeito juízo, tentaria evitar a escalada inflacionista que descrevi sabendo que ela permite evitar a deflação e nos poderá conduzir a um estado de economia sustentada, outra vez."

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Na entrevista transcrita na Visão, P Samuelson diz que se envolveu com "a política económica a 2 de Janeiro de 1932, num dos pontos mais baixos da Grande Depressão. Era, na época, conselheiro da Fed...". Naquela data, Samuelson não teria ainda completado 17 anos (nasceu em Maio de 1915), frequentava a Universidade de Chicago, onde foi bachelor em 1935. Não localizei o envolvimento precoce na Fed a que Samuelson faz ferência em Nobel Lectures , que resume o curriculum dos laureados.

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Já depois de ter escrito este post, observo no Jornal de Negócios on line que Helena Garrido subscreve a tese

"Do que precisamos é de uma (boa) inflação". Se precisamos, ela não tardará. A não ser que Angela Merkel não esteja pelos ajustes. A inflação é um fantasma que continua a assustar os alemães.

E os reformados de todo o mundo.

KEYNES RESSUSCITADO E O HELI BEN

O QUE DIZ MARTIN WOLF

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Keynes offers us the best way to think about the financial crisis
Sixty-two years after Keynes’ death, in another era of financial crisis, it is easier for us to understand what remains relevant in his teaching, writes Martin Wolf

...The shorter-term challenge is to sustain aggregate demand, as Keynes would have recommended. Also important will be direct central-bank finance of borrowers. It is evident that much of the load will fall on the US, largely because the Europeans, Japanese and even the Chinese are too inert, too complacent, or too weak. Given the correction of household spending under way in the deficit countries, this period of high government spending is, alas, likely to last for years. At the same time, a big effort must be made to purge the balance sheets of households and the financial system. A debt-for-equity swap is surely going to be necessary.
The longer-term challenge is to force a rebalancing of global demand. Deficit countries cannot be expected to spend their way into bankruptcy, while surplus countries condemn as profligacy the spending from which their exporters benefit so much. In the necessary attempt to reconstruct the global economic order, on which the new administration must focus, this will be a central issue. It is one Keynes himself had in mind when he put forward his ideas for the postwar monetary system at the Bretton Woods conference in 1944.
No less pragmatic must be the attempt to construct a new system of global financial regulation and an approach to monetary policy that curbs credit booms and asset bubbles. As Minsky * made clear, no permanent answer exists. But recognition of the systemic frailty of a complex financial system would be a good start."

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Keynes’s difficult idea (Paul Krugman)
Great piece by Martin Wolf today. I particularly liked this:
Keynes’s genius – a very English one – was to insist we should approach an economic system not as a morality play but as a technical challenge.
That’s the point of my favorite Keynes quote, where he declared of the Great Depression, “we have magneto trouble.”
What’s been striking me lately is how many people who talk and write about macroeconomics just don’t get Keynes’s essential point — the fact that economies can suffer from insufficient aggregate demand because people want to acquire liquid assets rather than real goods. Not to single out any one commentator, but this morning I read this:
Government spending doesn’t increase aggregate demand. All it does is transfer spending power from one party to another by borrowing from or taxing the public.
That’s exactly the infamous “Treasury view” from the 1920s, against which Keynes had to struggle. And it’s still out there.
Anyway, good for Martin; we’re going to need every possible voice to counter the niggling nabobs of negativism.

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*Hyman Minsky (September 23, 1919, Chicago, Illinois – October 24, 1996), was an American economist and professor of economics at Washington University in St. Louis. His research attempted to provide an understanding and explanation of the characteristics of financial crises. Minsky was sometimes described as a radical Keynesian because he supported some government intervention in financial markets and opposed some of the popular deregulation policies in the 1980s, and argued against the accumulation of debt. His research, nevertheless, endeared him to Wall Street. [1].

Nouriel Roubini perguntava a 30 de Julho de 2007: "Are We at the Peak of a Minsky Credit Cycle?" - Transcrito aqui no Aliás.

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‘Helicopter Ben’ confronts the challenge of a lifetime
Central banks may resort to their most powerful weapons against deflation: the printing press and the ‘helicopter drop’ of money. Will this work? Yes. But returning to normality will prove far more elusive, writes Martin Wolf

"...Ironically, we are where we are partly because the Fed was so terrified of deflation six years ago. Now, a credit bubble later, Mr Bernanke has to cope with what he then feared, largely because of the Fed’s heroic attempts at prevention. Similar dangers now arise with the drastic measures that look ever more likely. This time, I suspect, the result will ultimately not be deflation but unexpectedly high inflation, though probably many years hence."