MADRID | By Luis Arroyo | Bitcoin is increasingly present everywhere: newspapers, books, all over the Internet… and everybody seems to be infatuated with this new currency. However, it isn’t as fabulous as they make us think. It’s tricky and it could endanger even more the already damaged global economies.
MADRID | By Luis Arroyo | ECB’s policies have damaged more than helped the European economy. After all, the FED has managed to steer the US towards the path of growth, while the ECB is unable to make its policies work. But the truth is, they are not entirely the ECB’s but the Bundesbank’s procedures commanded by Ms Angela Merkel.
MADRID | By Luis Arroyo | The West is losing ground in the international arena: the United States’ credibility is damaged and Europe is so self-centered, focused in its own business that it has underestimated Russia. Now Ukraine is in the middle of a boiling debate between pro-Russians and pro-westerns and Putin won’t let the EU snatch the former soviet country.
MADRID | By Luis Arroyo | The shadow of deflation looming over the euro zone economy have seemingly gone away on Friday. The statistical office Eurostat anticipated an estimated 0.9% yearly inflation rate, two percentual points under last October registers. However, being afraid of deflation is not a nonsense because next banking recapitalisation points that credit is to tighten.
MADRID | By Paul Krugman at Luis Arroyo’s Ilusión Monetaria | Looking at current macroeconomic policy, the obvious question is, stupid or evil? And the obvious answer is, why do we have to choose? But it is, I think worthwhile – or at any rate soothing – to think about the longer-term future for monetary and fiscal policy.
MADRID | By Luis Arroyo | Germany prevents the monetary expansion in the country (and within the rest of the euro zone) by controlling the ECB. If the central bank had the minimal amount of money necessary for the area, all of it would go to Germans, who would spend more, thus accelerating the recovery of their European partners.
MADRID | By Luis Arroyo | Yanis Varoufakis is the most critical economist regarding the institutional failures of the monetary union. He considers that the European Banking Union will only benefit EU Northern countries, and adds that the basic principles of the euro zone have not been entirely followed.
MADRID | By Luis Arroyo | Some people consider the external surplus of southern countries in the EU as the ultimate proof that the austerity process was a success. But they are wrong. The reality is that everybody is increasingly saving more money –even wealthy people… but nobody is consuming.
MADRID | By Luis Arroyo | It is possible, as we have seen over the past few years, that no matter how much the Central Banks increase their money emissions, it won’t change people’s preference for liquidity. It isn’t clear that an increase in banking credit will swell investment either, especially if investors own a higher than normal debt stock and if they don’t see a clear future profitability. The same applies to families.
MADRID | By Luis Arroyo |The clock is ticking: if Congress can’t agree to budget terms, parts of the federal government will shut down by Monday midnight. But markets have reacted differently than expected to this political pulse between Democrats and Republicans.