The Double-Edged Sword – The US Dollar As The World’s Primary Reserve Currency

April 19, 2023Posted ineconomics, economy, macroeconomicsNo Comments

The Congressional Budget Office has produced a paper entitled “The U.S. Dollar as an International Currency and Its Economic Effects” which they summarized as follows:

The U.S. dollar plays an important role as the most widely used currency in global goods, services, and financial markets. Strong international demand for U.S. dollars and dollar-denominated assets associated with the dollar’s status as an international currency has increased the value of the dollar in foreign exchange markets and the value of dollar-denominated assets in financial markets. As a result, the dollar’s status has contributed to persistent U.S. trade deficits and, by lowering interest rates, to increased access to credit for U.S. households, businesses, and the federal government. Over the next decade, the dollar’s international use is expected to decline very gradually, in the Congressional Budget Office’s assessment, but it will not be overtaken by either of its closest competitors, the euro or the Chinese renminbi. 

The State of Joe Sixpack in 4Q2022: The Average Joe Is Worse Off

March 12, 2023Posted ineconomics, economy, macroeconomicsNo Comments

Written by Steven Hansen

The Federal Reserve data release (Z.1 Flow of Funds) – which provides insight into the finances of the average household – shows improvement in average household net worth. Our modeled “Joe Sixpack” – who owns a house and has a job, but essentially no other asset – is worse off than he was last quarter.

Economics and Hoarding

January 28, 2023Posted ineconomicsNo Comments

Since the Great Financial Crisis of 2008, there have been headlines such as Europe banks hoarding ECB cash, threatening credit crunch (2012), Banks across Europe are considering taking a drastic step to avoid negative rates (2016), and Bank of America Clients Hoard Cash at Highest Level in Two Decades (2022).  This first became a problem in the US during the Dot.com Crash (2001) and the GFC – and then shifted to Europe. After all this time, we in America might have a more dispassionate view of the issue.  But the third reference above shows the problem of hoarding money persists.

 Where is economic theory about hoarding? Hoarding is nowhere to be seen in mainstream economics. Herein we discuss why.


Image credit: Pixabay, Public Domain.

Economics for Peace and Justice

January 8, 2023Posted ineconomicsNo Comments

An immediate danger, the danger of nuclear holocaust, can be met with an efficacious solution, a grand design. President Biden, it is suggested, can offer the end of the dollar hegemony, a great desire of President Putin, for an end to the war in Ukraine. This bargain can be constructed out of the monetary policy that results from a New Neoclassical Synthesis extended to the creation of the Bancor International Order (BIO). Any nation that follows Three Rules for the creation and distribution of money, three rules of economic justice, can be certified by the IMF to become a member of BIO, provided it ceases any belligerent action.

Illustration 1. Nuclear Armageddon.
Image by Pete Linforth from Pixabay

January 2023 Economic Forecast: Our Indicators Predict Little Change In The Rate Of Economic Growth

December 30, 2022Posted ineconomics, macroeconomics2 Comments

Authored by Steven Hansen

EconCurrent‘s Economic Index insignificantly improved this month but continues to show the lowest level of growth since the 2020 recession. The ongoing weakness of transport, and imports continues to weigh on our economic forecast. There is no question we live in interesting economic times as the future economic impacts of inflation, pandemics, and the war in Ukraine are unpredictable. Read on to understand the currents affecting our economic growth.

U.S. Agriculture Report October 24, 2022

October 24, 2022Posted inClimate, economics, weather2 Comments

There are climate webinars held in different parts of the U.S. and at a webinar “North Central U.S. Climate” held on October 20, 2022, one of the presentations was titled Midwest/Great Plains Agricultural Update, October 20, 2022. The presentation was made by Brad Rippey – USDA. Analyst & Drought Monitor Author. Brad is the managing editor of the USDA Weekly Weather and Crop Bulletin and is one of the Editors of the Drought Monitor so he is in a unique position to understand the crop situation in the U.S. If I was a little more patient, I might have a recording of his presentation to share with you but I thought that just presenting his slides would be informative.I am not sure how long it takes for the recording of those webinars to get posted.

I am presenting the slides without comments. If you look carefully, I think you will be able to see that the trend in yield increases for key crops has topped out. Is this global warming or a long cycle? It is hard to say but it is very concerning. Some of the current issues were better explained in his comments and the Q&A afterward. But I think readers will get a good grasp of the situation from the slides. I have personal experience with river levels being too high as the Ohio River Company was a client and that was a frequent problem for them. River levels being too low is new to me. So it is not just a water shortage for farms and cities but also the water-based transportation system in the U.S.. For those who do not know it, our inland water transportation system is one of the key natural endowments of the U.S. 

I have often published articles on the USDA Executive Briefings and some of Brad’s slides come from that source but he has access to all sorts of good stuff so I wanted to take advantage of that. He was kind enough to send me a PDF of his presentation so that is what is being presented in this article. 

An Overall View of Concordian Economics

October 3, 2022Posted ineconomicsNo Comments

“We cannot solve our problems with the same thinking we used when we created them.”
—Albert Einstein

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”   — Buckminster Fuller

“Where there is no vision, the people perish.”
— Proverbs 29:18

Concordian economics discloses the dynamic nature of economic systems.

Reconciling Keynes and Hayek Through Concordian Economics

August 21, 2022Posted ineconomics3 Comments

Both Keynes’ and Hayek’s shared the belief that there existed a need to revisit the economic discourse that began in the thirties and involved their respective analyses of growth and the business cycle. This paper looks at these topics and discovers some of the deep methodological, cultural, substantive, and ideological roots of the chasm that existed between Keynes and Hayek. The reasons for the chasm are understood with the aid of Concordian economics, a framework of analysis through which prism both Keynesian and Austrian economists might finally have a serious conversation with one another.