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Zimbabwe’s New Currency Problem Is The Opposite Of Hyperinflation
Zimbabwe just can’t win. After escaping hyperinflation by adopting the US dollar in 2009, the country is struggling to deal with such an expensive single unit of currency. This is a problem when they don’t have any US coins.
NYT’s Lydia Polgreen describes their informal credit and barter system:
Zimbabweans have devised a variety of solutions to get around the change problem, none of them entirely satisfactory. At supermarkets, impulse purchases have become almost compulsory. When the total is less than a dollar, the customer is offered candy, a pen or matches to make up the difference. Some shops offer credit slips, a kind of scrip that has begun to circulate here.
Don’t miss: How hyperinflation could happen in America >
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Economist Steve Keen Goes After Paul Krugman With A New Presentation
Post-Keynesian economist Steve Keen really socked it to Paul Krugman in a presentation this weekend in Scotland.
If you’re just joining the battle this is a good, albeit wonky, starting point.
Keen refutes first the idea that the creation of credit necessarily leads to crisis, and second the idea (Krugman’s) that banks have nothing to do with debt crises. Instead he offers a theory of good and bad bank behavior.
See the rest of the story at Business Insider
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This Father Of 3 Lost His Job Of 26 Years And Now Faces An Impossible Decision
We came across this man’s “impossible decision” on Reddit:
I have 3 children (20 yrs., 14 yrs., and 9yrs.) and a very supportive wife. My position of 26 yrs. at a well known department store has been cut. It is truly the only job I have known as I have been working there since my college days. I started working the docks and from there a regional manager and finally a corporate buyer, and now all that has been lost. I am no stranger to travel, but I have already moved my family twice and I can’t bare the financial cost once more. I still owe the mortgage payment on my current house which amounts to about $137,000; however I do have a 401k that would cover at least 3/4 of that allowing me to at least pay of most of my current house. This is where I am unsure of what to do. Do I take a penalty and pay off my house so we have a roof over our heads? Or do I loose the house and collect unemployment until I can find another job? I am all very new to this and especially reddit, but my son assures me that you all are the best of crowds. Thank you in advance.
Most people on Reddit say that he shouldn’t touch the 401(k).
From our series of interviews with the long-term unemployed, we can confirm that many Americans are facing the same decision.
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See Also:
- How To Turn Your Tax Refund Into A Nest Egg
- Retirement Plans Are Sucking Up Money That Workers Need Right Now
- Traders Walk Out Of The CME En Masse After A Controversial Trade
Former TSA Chief Says We Should Allow Knives, Lighters And Liquids On Airplanes
Kip Hawley, the TSA director from 2005 to 2009, has an explosive editorial in the WSJ (and a book on the same subject coming soon).
Here’s the nut:
More than a decade after 9/11, it is a national embarrassment that our airport security system remains so hopelessly bureaucratic and disconnected from the people whom it is meant to protect.
Hawley proposes dramatic reforms including lifting the ban on knives, lighters and liquids.
Knives won’t be effective in taking down a plane anymore now that cockpit doors are reinforced and air marshals, flight crew and passengers know how to react. Lighters are far from the only way to set off an explosive. And we can scan for dangerous liquids with a minor technological upgrade.
Instead Hawley says the TSA should be given more discretion and incentive to identify major threats.
Read the whole thing at the WSJ >
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See Also:
- Traders Walk Out Of The CME En Masse After A Controversial Trade
- The Navy Says Its New $700 Million Combat Ship Will Never Survive A Shootout With China
- EXCLUSIVE: Ron Paul Shocks Campaign Staff With New Position On Israel
Here’s Why The NY Fed Says Unemployment Could Go Lower Than Anyone Expects
Economists at the NY Fed have come up with an alternative to the standard Okun’s Law that sees the unemployment rate falling well below consensus.
Where Okun’s Law relates unemployment to GDP, their “bathtub model” emphasizes the importance of outflows from unemployment.
These outflows will increase thanks to (1) acquisition of skills to meet new employment demands; (2) decreasing numbers of long-term unemployed; (3) unemployed people who decide not to re-enter the market—notably Baby Boomers and women.
As long as the economy keeps expanding, these trends will steadily bring down the unemployment rate to 6.5 percent by 2014 and as low as 4.7 percent by 2018.
Economists Jonathan McCarthy, Simon Potter and Ayşegül Şahin admit that, yes, their outlook may seem optimistic:
This series of labor market posts has examined the possible paths of the unemployment rate if the current expansion lasts beyond the postwar average of fifty-nine months. Of course, readers of this post may consider the assumption that the current expansion will last at least until mid-2014 as optimistic. However, once one assumes an ongoing expansion, then it seems likely that the unemployment rate will continue to fall more quickly than predicted by consensus forecasts based on a moderate growth outlook. Whether or not this fall in the unemployment rate produces fast overall growth in the economy depends on the speed at which the employment-to-population ratio increases and the productivity of the workers added as the labor market expands. The flow-based approach we have taken to study the labor market appears superior to the more aggregate approach taken by many forecasters using Okun’s Law. Moreover, even though flow rates have declined in recent years, the U.S. labor market remains dynamic by international standards. By examining flows as well as stocks in the labor market, we come to conclusions that differ from the conventional wisdom about how difficult it might be to reduce so-called structural unemployment, as we showed in our analysis of unemployed construction workers.
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See Also:
- Understanding The Unemployment Situation In One Huge Slide
- This Midwest Boomtown May Have Just Recorded The Lowest Unemployment Rate In American History
- Markets Do Nothing On The Jobs Report