Link: Tea Party/GOP Are Wrong: Federal Government Should Be Borrowing More Right Now
This column highlights the most interesting and useful business and financial commentary from around the Web each day. Feel free to send along your own suggestions
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Capital Gains and Games
"Yesterday's The New York Times had a good story by Binyamin Appelbaum about how low interest rates are significantly driving down the government's borrowing costs. Appelbaum said that, given the continuing very strong demand for U.S. debt, the Treasury is considering issuing securities with negative interest rates -- requiring buyers to pay for the privilege of safely parking their money -- and is assuming it will get lots of takers. In fact, the story shows that some investors in Treasuries are already getting a negative return and, given the alternatives, are happy to have it. Appelbaum's piece is factually correct and interesting but misses the real story. As Jesse Eisinger of ProPublica wrote about a months or so ago in The Times and I posted about here, there are three important budget implications of this situation."
"Mobile payment systems feel like magic. Wave a smartphone in the air with a wandlike flourish, or tap two of them together like Captain Marvel's bracelets, and invisible currency changes invisible hands.Contact-free and tap-and-go payments powered by NFC (near-field communication) give great demo. They're all the rage at this year's Mobile World Conference in Barcelona, where Spanish bank La Caixa just rolled out an ambitious citywide payment system. But even at a Google Wallet-friendly Starbucks, waiting in a 10-minute line only to pull a phone out of our pocket and fumble with it rather than a credit card barely feels like the future."
"Noam Scheiber, a senior editor of The New Republic, is the author of the just-published book "The Escape Artists," which argues that the Obama administration "fumbled the recovery." Bloomberg Businessweek calls the book a "Woodwardian account of infighting in the White House's economics team." Neil Irwin of The Washington Post praised its "really good detail" and said the book contained much he didn't know. Michiko Kakutani, in her review in The New York Times, also praised the book's detail while taking issue with some of Mr. Scheiber's arguments. My conversation with him, conducted by e-mail, appears below." (Also read Stock Markets Perform Much Better Under Democratic Than Republican Presidents
"Back on January 27, before the impact of the trillions in liquidity injections by the central banks was fully appreciated, the advance Q4 GDP print came in below estimates of 3.0%, printing at 2.8%. Today, we just got the flip flop to that, after the second revision just printed at 3.0%, on expectations of an unchanged print at 2.8%. The reason: a fine-tuning, whether seasonally adjusted or not, which improved 4 of the components of Q4 GDP (Fixed Investment, Personal Consumption, Imports, Government Expenditures), while reducing two (Inventories and Exports) nominally."
"Over the past year, you'd have made roughly 26% on an investment in gold. But you'd have done even better, with a 35% return (ignoring dividends and currency translation), if you'd put your money into De La Rue, the U.K.-based printer and papermaker. Just as gold benefits from "money printing" by the world's central banks, so does De La Rue, which prints money for more than 150 countries. De La Rue also benefits from operating in a secretive, even crepuscular, industry. Among the other firms that contribute to the making and printing of currencies: Giesecke & Devrient, family-owned and based in Germany; privately held, French-based ArjoWiggins; Crane Currency, also private, based in Sweden and the U.S.; and privately held Orell Fuessli and family-controlled SICPA, both based in Switzerland." (Also Read The Long-Term Fundamental Case for Gold
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