• Tag Archives Austria
  • Meet New Zealand’s New Prime Minister As Kiwi Tumbles

    Labour leader, Jacinda Ardern, will be New Zealand’s next Prime Minister after winning the support of the New Zealand First Party to form a coalition government. Labour with NZ First and the Greens will have 63 of the 120 parliamentary seats versus the National Party with 56. At 37, Ardern joins a global wave (France, Austria) of young politicians being appointed to key leadership roles, and will be the country’s youngest Prime Minister and the third woman to hold the post. New Zealand’s Labour Party had not been in power for nine years, after three terms in power for the National Party.
    Twenty-six days after the election, the leader of New Zealand First, Winston Peters, announced his party was backing Labour live in an eagerly -awaited television announcement.

    This post was published at Zero Hedge on Oct 19, 2017.


  • Bill Blain: “This Time It Really Is Different! The Machines Have Taken Over And They Will Never Sell”

    Submitted by Bill Blain of Mint Partners
    Forget the Known Unknows, its the shocking surprises that are going to get us

    ‘Bubbles don’t grow out of thin air, they have a solid basis in reality. But, reality is distorted by misconception..’ And it’s a bad start to the week as my Bloomberg obliquely gave the finger by refusing to log me on.
    Markets don’t care about my travails. They continue on their unstoppable upward trajectory. (Remember that word – trajectory, often parabolic. Look it up.) Lots of folks warning about complacency, but markets pay no heed. They prefer the global unlimited growth vibe..
    Now, I know I sound like a broken record with my boring repeated warnings the market has gone overly frothy. I could counter with arguments about low volatility and short-tops painting a weakening technical picture. I could make arguments about how the short-term and long term business cycles all converge on weak indicators – I could even give you a lengthy discussion on how the Kondratieff ultra-long cycle says ‘run-away!’ I could refer to volume of money issues, or QE concerns. I could even point you to some astrological stuff…
    Or I could point out what a worrying place the markets are. After reading through all the news this morning it strikes me we’re in thrall to a host of known unknowns.
    If you want to worry, then pick your choice: it’s a delightful smorgasbord of things to go bump from the anniversary of the Hurricane and Crash of 87, the right-wing in Austria, noise about Tax reform in the US, Norte Korea, Kurds vs Iraq/Turkey, Catalunya vs Spain, UK vs Everyone, Trump vs the Universe, and everything in between. (In my own case, tomorrow is exactly a year since the unpleasantness with my primary pump – just doesn’t feel like it’s going to be a lucky week!).

    This post was published at Zero Hedge on Oct 16, 2017.


  • In Historic Result, 31-Year-Old Wins Austrian Elections, Worst Result For Establishment Party Since Hitler Rule

    In another stunning defeat for Europe’s establishment, as previewed earlier this morning Austria’s 31-year-old Sebastian Kurz is assured victory in the Austrian National Council elections, becoming Chancellor with his center-right People’s Party set to take roughly 30.2% of the vote – the best result in almost two decades – according to exit polls by Austrian broadcaster ORF, while just as shocking is that the anti-immigrant, nationalist Freedom Party appears set to top the Social Democrats in 2nd place with 26.8% of the vote: the two parties are expected to form a coalition government. If confirmed out by final results, that would be its strongest performance for the Freedom Party since the 26.9% it won in 1999 when the party was led by the charismatic Jorg Haider. Meanwhile, Chancellor Christian Kern’s Social Democrats are looking at another devastating – for Europe’s establishment – loss, sliding to 3rd spot with just 26.3% of the vote.
    The full breakdown from the initial exit polls vs the last election results in 2013:
    People’s Party (Foreign Minister Sebastian Kurz) 30.5% vs 24%
    Freedom Party (Heinz-Christian Strache) 26.8% vs 20.5% Social Democrats (Chancellor Christian Kern) 26.2% vs 26.8% in 2013 Neos (Matthias Strolz) 5.3% vs 5% Greens (Ulrike Lunacek) 4.7% vs 12.4% Liste Pilz (Peter Pilz) 4.3% (didn’t run in 2013)

    This post was published at Zero Hedge on Oct 15, 2017.


  • The Case for Privatizing Oceans and Rivers

    Quarterly Journal of Austrian Economics 20, no. 1 (Spring 2017) [Water Capitalism: The Case for Privatizing Oceans, Rivers, Lakes, and Aquifers by Walter E. Block and Peter L. Nelson]
    This collaboration between Block (free-market economist) and Nelson (free-market engineer) offers a little bit of anarcho-free-market-everything with which to engage the interested reader. Block, as always, brings his combative spirit and formidable reasoning abilities. He is ready to take on all comers including, at one point in the book, his own co-author! Nelson’s interesting case-studies highlight particularly well what happens when property rights and market forces are suppressed – whether on land or on water.
    The book is a fusion of two complementary tomes, a circumstance that can often make for choppy reading. At times, it is hard going. But the pilgrim who perseveres will in time be rewarded with many interesting insights, as well as a glimmer of what a consistent free-market water-rights regime would (or should) look like.
    The first half of the book is a theoretical section of sorts, laying down the case for free-market economics in a property-rights context. This is followed by several interesting case studies that reinforce the theoretical discussion at the tract’s beginning. A marvelous list of provocative topics is covered (albeit briefly for most of the topics). These mostly pertain to water-rights issues, but often the range broadens and discussion strays into more generalized property issues (e.g. the shameful treatment of Cliven Bundy [re. p. 40]). Here also is where the authors re-state their free-market roots, adding a second crucial concept: the problem of ‘government failure’ which waxes in importance as the case studies are reached. These authors are not bamboozled by the sight of bureaucrats bringing gifts to the private sector, and they also understand about free lunches.

    This post was published at Ludwig von Mises Institute on Oct 10, 2017.


  • Entrepreneurs Are the Key To Economic Development

    Questions of economic development have long been long held a prominent position in economics. How did the most advanced economies get to where they are? What can less-advanced economies do to catch up with the leading pack?
    After World War II, a whole sub-field of economics emerged to focus on these questions. Today, we call it development economics. Instead of simply explaining historical trends, this field’s main focus lies on discovering what would help less-developed countries achieve more economic growth and join the predominantly Western countries at the top of the economic ladder.
    Compared to mainstream economics, development economics is quite a heterodox discipline in which many theoretical approaches are pursued. This can be both a curse and a blessing. On the one hand, it means that development economics is a field where ‘every economic fallacy ever refuted is still alive and well’ (to paraphrase economist GP Manish), but it also means that there is room for free-market approaches and different methodologies to make themselves heard.
    As such, it is a field in which Austrian economists might fruitfully engage. To this author’s knowledge, however, such Austrian engagement has so far not been wide-spread. One reason for this might be that, ultimately, Austrian economics often boils down to ‘liberate markets’ and ‘protect private property rights.’ These are suggestions that are superficially similar to the neoliberal approach that has been popular since the 1980s and that have consequently been tarnished by neoliberalism’s mixed success in promoting economic development.

    This post was published at Ludwig von Mises Institute on October 9, 2018.


  • Why Small States Are Better

    Andreas Marquart and Philipp Bagus (see their mises.org author pageshere and here) were recently interviewed about their new book by the Austrian Economics Center. Unfortunately for English-language readers, the book is only available in German. Nevertheless, the interview offers some valuable insights.
    Mr. Marquart, Mr. Bagus, you have released your new book -Wir schaffen das – alleine!’ (‘We can do it – alone!’) this spring. The subtitle says: ‘Why small states are just better.’ To begin: Why are small states generally better than larger ones?
    Andreas Marquart (AM): In small states the government is closer to its citizens and by that better observable and controllable by the populace. Small states are more flexible and are better at reacting and adapting to challenges. Furthermore, there is a tendency that small states are more peaceful, because they can’t produce all goods and services by themselves and are thereby dependent on undisturbed trade.
    How far can the principle of small states go? You are for example open to the idea of Bavaria seceding from Germany, or Upper Bavaria then from the rest of Bavaria. Ludwig von Mises stopped at the communal level, thinking that the secession of individuals would be unrealistic. You as well? Is there a point when your rule – the more decentralized the better – is not true anymore?
    Philipp Bagus (PB): In principle not. We don’t want to arrogate, however, to know the optimal size and to say that this state is too small and that one too big. The optimal size would be determined in competition through the right of secession. If an apartment tower or street secedes from its municipality and then concludes that there are problems which were previously done better, then the secession could be revoked and the two entities reunited. Are they are better off alone, however, they will stay seceded. In this competition it will then show how successful small states can be.

    This post was published at Ludwig von Mises Institute on Andreas Marquart / Oct 4, 2017.


  • Digital Fools Gold – Bitcoin’s Sustainability in Question

    Recently, Jamie Diamond of Citibank made headlines by labeling Bitcoin a fraud. Whether those comments played any part in Bitcoin’s recent sell off is hard to say, but the true believers reacted with predictable outrage given that the comments came from the ultimate Wall Street insider whose financial supremacy is supposedly threatened by crypto currencies like Bitcoin.
    Although my critical comments on Bitcoin over the years have not received nearly as much attention, they have been just as summarily dismissed by the crypto currency crowd. But I am a well know libertarian and follower of the Austrian School of economics. I am not a member of the banking establishment, nor am I a fan of fiat money. I should be one of the good guys. But since I happen to own a company that sells gold, a metal that supposedly Bitcoin will soon make obsolete, the crypto crowd looks at me like a stubborn old buggy whip salesmen who refuses to acknowledge that the future resides in horseless transportation.
    Well Bitcoin is not the automobile and gold is not a buggy whip. While Diamond’s comments were not 100% on the money, he is right about Bitcoin’s ultimate demise, just wrong about how it will meet its fate and why. While most fear that government will simply look to make Bitcoin illegal (which could be a possibility if Bitcoin could actually deliver on its promises), it is much more likely to die of natural causes.

    This post was published at Schiffgold on OCTOBER 4, 2017.


  • PHYSICAL GOLD – THE ONLY PENSION FUND TO SURVIVE

    There are probabilities in markets and there are certainties. It is very probable that investors will lose a major part of their assets held in stocks, bonds and property over the next 5-7 years. It is also probable that they will lose most of their money held in banks, either by bank failure or currency debasement.
    WHO BUYS A BOND THAT WILL GO TO ZERO?
    What is not probable, but absolutely certain, is that investors who buy the new Austrian 100-year bond yielding 2.1% are going to lose all their money. Firstly, you wonder who actually buys these bonds. No individual investing his own money would ever buy a 100-year paper yielding 2% at a historical top of bond markets and bottom of rates.
    The buyers are of course institutions who manage other people’s money. These will be the likes of pension fund managers who will be elated to achieve a 2% yield against negative short yields and not much above zero for anything else. These managers will hope to be long gone before anyone finds out the disastrous decision they have taken with pensioners’ money.
    But the danger for them is that the bond will be worthless long before the 100 years are up. It could happen within five years.

    This post was published at GoldSwitzerland on September 21, 2017.


  • Money-Supply Growth Drops Again – Falls to 108-Month Low

    Growth in the supply of US dollars fell again in August, this time to a 108-month low of 4.2 percent. The last time the money supply grew at a smaller rate was during August 2008 – at a rate of 4.1 percent.
    The money-supply metric used here – an “Austrian money supply” measure – is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2. The Mises Institute now offers regular updates on this metric and its growth.
    The “Austrian” measure of the money supply differs from M2 in that it includes treasury deposits at the Fed (and excludes short time deposits, traveler’s checks, and retail money funds).
    M2 growth also slowed in August, falling to 5.3 percent, a 75-month low.

    This post was published at Ludwig von Mises Institute on Sept 18, 2017.


  • “It Blows My Mind”: 100-Year Austrian Bond With Record Duration 3x Oversubscribed

    As we reported yesterday, Austria was set to make Eurozone history with the first sale of a 100 year bond direct to public markets, bypassing private syndication. It did that later in the day, when the 3.5 billion offering priced tighter than initially marketed, at RAGB 2/2047 +50, at a price 99.502 to yield a paltry 2.112% and with a negligible 2.1% cash coupon.
    What is even more notable is that despite mounting fears of an imminent tapering by the ECB which many have predicted will lead to a new European bond tantrum and blow out in yields, there was tremendous end demand by investors for the offering managed by BofAML, Erste Group, GS (B&D), NatWest and SocGen, mostly fund managers from across the globe, resulting in what ended up being more than 11BN in 208 different bids for the paper, an oversubscription of more than 3x! The breakdown for the final allocation is was follows, courtesy of Bloomberg:
    3.5b 100Y tranche: Book exceeded 10.8b from 208 investors, including 1.5b of JLM interest
    Allocation by geography:
    Eurozone incl. Austria 29% Germany 13% France 4% Spain 3% Other Eurozone 9% Other Europe (non-Eurozone) 55% U. K. 42% Switzerland 9% Americas 12% Middle East 4%

    This post was published at Zero Hedge on Sep 13, 2017.


  • Austria Makes History With First 100-Year Bond Sale Into Public Euro Markets

    Austria, a country which itself is less than 100 years old, made European history today when it launched a 100-year government bond: the first such deal to be sold into eurozone public markets. While Austria is not the first nation to sell 100 year bonds – last year Ireland and Belgium both sold privately-placed century-long bonds – while Austria itself sold a 70 year bond, Austria’s planned 100-year bond is unique in that it would be the first such debt sold directly into public markets in the eurozone according to the WSJ.
    It is unclear if the lack of a private sale suggests there was no reverse inquiry for the high duration product among institutions, however the return of this highly convex and duration-laden instrument suggests that European yields are unlikely to shoot higher, at least judging by the anticipated demand. On the other hand, yields are about to spike from the perspective of Austria, which is simply seeking to lock in the longest-possible term financing before the ECB begins tapering/tightening, and yields spike, as Fasanara Capital warned yesterday.

    This post was published at Zero Hedge on Sep 12, 2017.


  • The most useful leading indicator of the global boom-bust cycle

    The long-term economic oscillations between boom and bust are caused by changes in the money-supply growth rate. It can therefore make sense to monitor such changes, but doing so requires knowing how to calculate the money supply. Unfortunately, most of the popular monetary aggregates are not useful in this regard because they either include quantities that aren’t money or omit quantities that are money.
    What ‘Austrian’ economists refer to as TMS (True Money Supply) is the most accurate monetary aggregate. Whereas popular measures such as M2, M3 and MZM contain credit instruments, TMS only contains money. Specifically, TMS comprises currency (notes and coins), checkable deposits and savings deposits.

    This post was published at GoldSeek on 1 September 2017.


  • Why Houston Doesn’t Need Federal Flood Relief – In Four Charts

    In his article today, Christopher Westley noted that Texas’s economy – when measured by GDP – is larger than Canada’s. In other words: If Texas were an independent country, it would be the world’s 10th largest economy (totaling $1.6 trillion), and its citizens would be more than capable of addressing natural disasters of the magnitude of a major flood. Texas’s economy is also larger than those of Russia and Australia.
    By why stop our analysis at the state of Texas? Indeed, if we look at the GDP of the Houston metropolitan area, we find it comes in at $503 billion. This total is similar to the GDPs of Poland, Belgium, and Austria. It’s significantly larger than the GDPs of Norway and Denmark.1

    This post was published at Ludwig von Mises Institute on Aug 31, 2017.


  • Why Every European Country Has A Trump Or Sanders Candidate

    Authored by Richard Drake via TheAmericanConservative.com,
    The suicide in the Friuli region of northern Italy earlier this year of a 30-year-old man, identified in the newspapers only as Michele, has become a symbol of the country’s unemployment tragedy, particularly as it affects young people.
    Though much worse in the South, the country’s economic crisis also has had a blighting effect on the North. The national unemployment rate now stands at nearly 12 percent. A 40 percent youth unemployment rate nationwide, however, has people speaking of a generational apartheid in Italy. There is no work to be found for young people. In the workplace, comparatively speaking, they have been walled off from the rest of the population.
    Friuli is a region of plain and mountain in the northeastern part of Italy, flush against borders to the north with Austria and the east with Slovenia. The annals of Friuli antedate by many centuries the arrival of the ancient Romans, who founded the colony of Aquileia there nearly two hundred years before Christ. The barbarian invasions swept over Friuli in the general wreckage of the Roman Empire. An Aquileian state arose in the Middle Ages, but was absorbed in the 15th century by the expanding Venetian empire. Then Friuli passed through French and Austrian phases of occupation and control before becoming part the newly founded Kingdom of Italy, in 1866.
    The Friulani, a highly energetic and resourceful people steeped in the work ethic common to the peasant and artisanal cultures of traditional Europe, tilled the land and also gained a well-deserved reputation for their skill in specialty crafts and the building trades. Typically in such cultures, the work that a man did defined him. The modern world has changed those old ways of life, but the culture they generated persists. More recently, Friuli became renowned for its small businesses and factories, which played a vital role in the national economy. There was still hard work for the Friulani to do.

    This post was published at Zero Hedge on Aug 30, 2017.


  • Austrian Monetary Theory vs. Federal Reserve Inflation Targeting

    One of the leading policy guideposts for central banks and many monetary policy proponents nowadays is the idea of ‘inflation targeting.’ Several major central banks around the world, including the Federal Reserve in the United States, have set a goal of two percent price inflation. The problem is, what central bankers are targeting is a phantom that does not exist.
    Perhaps we can best approach an understanding of this through an appreciation of some of the writings by members of the Austrian School of Economics on matters of monetary theory and policy. Carl Menger (1840-1921), the founder of the Austrian School in the 1870s, had explained in his Principles of Economics (1871) and his monograph on ‘Money’ (1892), that money is not a creation of the State.
    Money Emerges from Markets, Not the State A widely used and generally accepted medium of exchange emerged ‘spontaneously’ – that is, without intentional government plan or design – out of the interactions of multitudes of people over a long period of time, as they attempted to successfully consummate potentially mutually advantageous exchanges. For example, Sam has product ‘A’ and Bob has product ‘B’. Sam would be happy to trade some amount of his product ‘A’ for some quantity of Bob’s product ‘B’. But Bob, on the other hand, does not want any of Sam’s ‘A’, due to either having no use for it or already having enough of ‘A’ for his own purposes.

    This post was published at Ludwig von Mises Institute on August 24, 2017.


  • Mapping The World’s Most Liveable Cities

    If you want to move to one of the world’s most liveable cities, pack your bags and book flights to Australia or Canada…
    ***
    As Statista’s Niall McCarthy notes, The Economist assessed 140 major cities worldwide on stability, healthcare, culture and environment, education, and infrastructure, declaring Melbourne the most liveable city in 2017 for the seventh year running. Australia’s second most populous city scored 97.5 out of 100. Vienna, the Austrian capital, came second and three Canadian cities rounded off the top five – Vancouver, Toronto and Calgary.

    This post was published at Zero Hedge on Aug 23, 2017.


  • Who Bought The New Greek Bonds: Here Is The Answer

    After triumphantly returning to the bond market three years after it last issued a euro-denominated long bond (which one year later nearly defaulted when only a third bailout prevented Grexit), this morning Bloomberg has provided details of who the lucky buyers of the just priced 3BN bond offering were. And not surprisingly, the biggest source of new funds for the Greek government (which will then use most of this to pay interest owed to the ECB) were US buyers.
    As Bloomberg notes, just under half, or 1.425BN of the 3BN deal was new money with 1.57b of existing paper rolled, with the following geographic distribution of new sources of cash:
    U. S. 44% U. K./Ireland 26% Greece 14% France 7% Spain/Portugal/Italy 3% Germany/Austria 3% Others 3% By investor type:
    Fund managers 46% Hedge funds 36% Banks/private banks 13% Others 5%

    This post was published at Zero Hedge on Jul 26, 2017.


  • Money Supply Growth Falls Again, Dropping to 105-Month Low

    Growth in the supply of US dollars fell again in May, this time to a 105-month low of 5.4 percent. The last time the money supply grew at a smaller rate was during September 2008 – at a rate of 5.2 percent.
    The money-supply metric used here – an “Austrian money supply” measure – is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2. The Mises Institute now offers regular updates on this metric and its growth.
    The “Austrian” measure of the money supply differs from M2 in that it includes treasury deposits at the Fed (and excludes short time deposits, traveler’s checks, and retail money funds).
    M2 growth also slowed in May, falling to 5.6 percent, a 20-month low.

    This post was published at Ludwig von Mises Institute on July 21, 2017.