The Kensington Review

31 August 2015

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Cogito Ergo Non Serviam

Latest Commentary: Volume XIV, Number 152

Fed Should Leave Rates Alone -- Central bankers, like old generals, tend to fight the last war. Thus, the chatter around the Fed's Jackson Hole meeting and the up-coming FOMC conclave focuses on increasing interest rates. In the minds of many, the issue is not so much if to raise them but when. The latest GDP revision has come in at 3.7%, while the number of jobs continue to increase. The standard model suggests that inflation is just around the corner, and inflation hawks are urging a pre-emptive strike, raising rates for the first time in a decade. In truth, an increase before the end of the year would probably weaken jobs and GDP while aggravating the real problem, which remains deflation. The key to understanding this is the US dollar. [31 August]

Migrants Pose Minimal Security Risk for Europe -- Europe has an immigration problem on its hands that seems to grow worse by the minute. People flee places like Syria and Libya, and the EU is definitely a better place to live and raise a family, so that's where they go. This has sparked a nativist backlash, and parties like UKIP, France's National Front and Italy's Northern League are channeling this proto-racism into the mainstream of national and European politics. One of the big arguments they make is that groups like ISIS could use the wave of immigration to place terrorists inside the EU. This argument has everything going for it except a factual basis; it is neat, plausible and wrong. [28 August]

Technology Exaggerates China-Led Crash -- It has been a bad few days in the global stock markets. China's general ineptitude at running capital markets has resulted in a nasty property bubble and a possible market slowdown. As the second largest economy in the world, when China sneezes the rest of the planet needs to reach for the aspirin and decongestants. Trillions were wiped off the value of shares around the world, and for one session, the Dow opened down 1,000 points. The market has made back much of that loss. While some prophesy a collapse worse than 2007-8, what is happening here is weeks of trading happening in seconds because of technological developments. [27 August]

Tourists Stop Terrorist on European Commuter Train -- Friday afternoon could have been a very bad time on a train running from Amsterdam to Paris. Ayoub El Khazzani, a 25-year-old Moroccan national, on four European security watch lists for his alleged links to radical Islamic groups, was carrying an AK-47 and allegedly opened fire. Three Americans, a Briton and some other passengers, unarmed, took him down. Over the week-end, President Hollande of France awarded four them the Legion d'honneur, and three more will get their red ribbon soon. Their actions merely show that everyone is on the front lines now. [24 August]

Greek PM Tsirpas Calls Snap Election -- Greek Prime Minister Alexis Tsirpas has resigned after he lost the support of many of his own MPs on the vote over the Greek bailout. He has chosen an election date of September 20, which means the opposition parties have very little time to prepare. With a faction of his own Syriza party breaking away, this is the best possible move and timing for Mr. Tsirpas. The election, however, may result in his defeat, but this offers him the best chance of a new mandate and solid majority. [21 August]

Copyright 2015 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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