1/n

Putin wanted the borders of 1991. Now he has the economy of 1991.

Very soon we will have a situation where Russia will be going back to a planned economy. 2/n

Given the sanctions Russia is essentially in a situation of a barter economy in terms of foreign trade.

It will oil and gas for cars, medicin, technology - everything - and at a price significantly above world market prices.

1/n

The discussion about "transitory" versus "permanent" higher inflation is silly.

The point that the Federal Reserve has created a massive excess liquidity - broad money supply growths continue to strongly outpace the trend in money demand.

That is inflationary. 2/n

Have a look at the M3 of compared to a very long-term trend.

All that extra money will have to increase nominal spending in the US economy.

1/n How much excesss liquidity has US monetary easing created? And how much inflation will it create?

The P-star model is a way to evaluate that. 2/n The P-star model is old-school monetarist thinking and was first presented in the 1989 in the article "M2 per unit of potential GNP as an anchor for the price level" by Jeffrey J. Hallman, Richard D. Porter and David H. Small

1/n

I am working on a paper on why interest rates and yields are as low as they are. I will share some preliminary results here. 2/n

What I will share are some of the output from a simple model for US 10-year Treasury bond yields.

I have been reading up on 'Central Bank Digital Currencies' (CBDC) - it seems to me that central banks really are mostly are driven by fear our 'private' crypto currencies and really have little idea about why they need CBDCs.... ...I on the other hand think CBDCs could improve the functioning of monetary policy and could be useful in the conduct of monetary policy - particular with the natural interest rate close to the Zero Lower Bound.

1/n Siden marts har jeg brugt rigtig meget tid med Covid-19 data. I forhold til at forklare forskelle mellem forskellige lande er min konklusion at hverken adfærd eller politik betyder betyder nær så meget som det gøres til. Der er ikke ansvarlig og uansvarlige befolkninger. 2/n "Vi" styrer eller kontrollerer ikke virussen. Tidsmæssigt kan forskellige faktorer "forskubbe", hvor mange der bliver smittet og dør, men langt mere vigtigt er det, som jeg har kaldt "health fundamentals"

1/n

Covid Scandale :

From the Danish newspaper @berlingske (in Danish): 2/n

"I ugevis har medier og forskere og over hele verden med stigende utålmodighed afventet offentliggørelsen af et stort dansk studie om effekten – eller manglen på samme – af at gå med mundbind i det offentlige rum her under coronapandemien."

1/n Epidemiological vs economic forecasting

If we look at the forecasts we got from epidemiologists initially in this pandemic it has turned out that they have massively wrong. While tragic the number of people who has died in this pandemic has been much lower than forecasted 2/n The reason given by epidemiologists then is that that is because of interventions - lockdowns. But then you made the wrong kind of forecast - a forecast you forgot to forecast what would happen IF lockdowns were implemented.

1/n I have a simple model of US stock market valuation. I like to look at the Wilshire 5000 to get a broad stock market measure. I have just updated the model. Here are the results... 2/n This is actual (log) Wilshire 5000 versus the model. The model is based on two factors only - Potential Nominal GDP (as estimated by CBO) and Baa rated corp. bond yields.

1/n Are US stocks overvalued? yes, 20-25% according to a simple variation of the Fed model I have estimated.

@euroinvestor 2/n I estimated Wilshire 5000 as a function of potential US NGDP, corp bond yields (Baa rated and 5-year ruling variance in US industrial production.