Gold Bug, The Fed Is Stuck, Globalization Under Attack, Trump’s China Syndrome, Loonie’s Bounce, Under 30 Angst

What I’m listening to.

Mozart -- Mitridate, Re di Ponto

Why countries dump and hoard gold.

Bloomberg -- Why Canada Is Dumping Gold -- and China Isn’t

Canada, home to some of the world’s largest gold-mining companies, recently announced that it had effectively liquidated all of the country’s holdings of the shiny metal and is moving to what a government spokesperson described as “easily tradable” assets.


Central Banks and Gold Puzzles

We study the curious patterns of gold holding and trading by central banks during 1979-2010. With the exception of several discrete step adjustments, central banks keep maintaining passive stocks of gold, independently of the patterns of the real price of gold. 

Cash for gold.

CNBC -- The Fed under Yellen and the gold trade

Gold which has been on a remarkable run so far in 2016, pulled back this week before the Fed statement, and then did an about-face.

The Fed still can’t find the low interest rate off ramp.

Telegraph -- The Yellen Fed risks Faustian pact with inflation

Interest rates in the United States have fallen to minus 2pc in real terms and are dropping into deeper negative territory with each passing month. This is a remarkable state of affairs.

Globalization under assault.

Globe and Mail -- Globalization and its discontents

Sir Karl Popper, one of the great philosophers of the 20th century, once wrote a book titled The Open Society and Its Enemies. Today, the title might read, “Globalization and Its Enemies.”

The problem with globalization, ammunition for both sides, even Trump.

New York Times -- What Donald Trump Gets Pretty Much Right, and Completely Wrong, About China

If there is one thing Donald Trump seems sure about, it is that the United States is getting a raw deal from China.

The combination of the Bank of Canada holding interest rate cuts, the planned fiscal stimulus in the upcoming Federal budget, the Fed blinking on interest rate increases, and a bounce back in commodity prices put a floor under the Canadian dollar at 68 cents US in January resulting in a 15% rise to date. Most analysis puts the fair value of the Canadian dollar at 80-85 cents US so today’s 77 cents suggest the currency is still undervalued unless you expect any of the four conditions above to change. 

Globe and Mail --  The loonie is soaring, but is this rally sustainable?

In less than two months, the Canadian dollar has wiped out nearly a year’s worth of fear.

You’ve screwed the planet, I can never buy a house, a post-secondary education leaves me in crushing debt, and unless my parents are rich I start 50 yards behind the starting line in life’s 100 yard dash.

Project Syndicate -- The New Generation Gap

Something interesting has emerged in voting patterns on both sides of the Atlantic: Young people are voting in ways that are markedly different from their elders.

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Twin Virtues: Inequality of Outcomes & Equality of Opportunity©

Twin Virtues

Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.

The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.

When too few get too much everybody loses.

Feminism is about women living their lives on their own terms, marshalling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.

Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?

Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.

My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.

Free trade is a wonderful thing. Time and time again economists have proven that free trade creates enormous wealth for each country 'on the whole'. Historians have shown that free trade is usually associated with rising political, social and cultural liberty. The perennial problem is that free trade always creates tremendous disruption for thousands even millions of individuals often concentrated in one geography, and where the state is idle, not investing in best in class instruments of social justice, free trade can be a permanent ticket out of the middle class, down, not up.

Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.

Public policy should be designed to decrease inequality before the law and increase equality of opportunity.

Capitalism is not the problem; the problem is what we do with capitalism.

Content is always more difficult to argue than conspiracy.

Let the state regulate and the market operate (most things).

Welfare strategies are best designed as a hand up, not as a hand out.

Political debate should not be fact free fighting.

Explanation lasts longer than eloquence.

Always favour empowerment over dependency.

The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.

Find your voice and don't be the echo of somebody else.

It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.