Just out, another Federal Reserve Bank of San Francisco Economic Letter featuring another model.

Here is the effect on employment, it suggests, of the $1.72 trillion the US Central Bank has spent buying up various assets since 2008:



That is, the buying spree will have lowered unemployment by a point and a half by (important bit this) 2012. Or, in other words, the Fed will have created 3 million jobs. Nice.

Course, that does pan out to $573,000 (keep the change) per job. But this was not just about jobs was it? D-E-F-L-A-T-I-O-N!

No fear - once establishing that that particular threat is fully under control the authors produce this beautiful section of economic prose-hedging:

"The simulations also suggest that the longer-run inflationary consequences of the program are likely to be minimal, as portfolio-balance effects rapidly fall to zero and conventional monetary policy adjusts to bring conditions back to baseline. In part, this long-run neutrality reflects that agents in the model have confidence in the FOMC’s determination and ability to maintain price stability—a belief that policymakers ratify."
Que? Whatever - it's all good - bring on QE3, baby.

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In the land where I was born...


...one of my local rags pays the price for sacking the sub editing team (guess). Or not training them enough (certainty).

But in terms of fantasy political-economics the resulting style has much to recommend it.

Have a fine weekend.

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Norway's Aftenposten joined the Wikileaks ball recently from which this quote about state-sponsored industrial espionage à la française comes:

"France is the evil empire when it comes to stealing technology - and Germany knows it," said the director of Americans, while he added that German authorities have shown little willingness to do something about it." (link, Google translated)

Try telling that to the French:

"The French government today said it was the victim of an "economic war" after Renault, the partially state-owned car maker, suspended three top executives over suspected leaks of secret electric car technology." (link to yesterday's Guardian article)
Brilliant counter-PR? Or just a fact of international relations life? Looks like both.

There is a long pedigree for such activities and, in France, the most memorable episode concerned Russian theft of Concorde technology in the early 1960s. Not that the Tupolev TU-144 went on to become a household name or roaring success (Wikipedia entry here, with a nice section on the espionage).

But it is just the type of background in which to perfect what Molière called "the knack of easing scruples". Along with everyone else.

By the way, the Direction Générale de la Sécurité Extérieure, the French intelligence organisation that Aftenposten refer to, have been on a recruitment drive - which continues. A growth industry, no less.

Happy New Year to you.

(And, by popular demand, the ad that inspired US Ambassadors everywhere to spoil their audiences)

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