Some recent good news

June has been a good month thus far for US economic news. Some points:

1. The month began with U.S. politicians avoiding a cliff, avoiding default on U.S. Treasuries. Good for us, and good for the rest of the world. The world, after all, needs a numeraire, a measure of the measures, a money of the monies. The numeraire was long ... gold. Now it is the U.S. dollar. With a U.S. bond default, one fears it would soon be something else ... perhaps the Chinese yuan. The transition would not be accomplished without grave difficulties and hardships and, once it was resolved, a new geopolitical balance would have been struck. One difficult to contemplate with equanimity.

2. The Fed decided NOT to raise the base rate of interest this month. It has been on a long campaign of increases, in order to try to cool down inflation. The goal, though, is to thread a needle -- to cool the price increases without dampening productivity and job creation.

3. A new contract for the west coast dockworkers. This is very good news. It means there will likely be no disruption further disruption this year in the work at those docks, the critical work of bringing into the U.S. all the stuff we buy from Asia. It is too soon after the Covid related supply-chain disruptions to be presumptuous about that.

4. The cryptocurrency market seems to be radically shrinking. This is at least superficially bad news. The popping of another bubble? The housing derivatives market went bust in 2007 and look at how THAT turned out! But the cryptocurrency news has an important difference. Nobody outside of that smallish world seems to be getting slammed by it. That market seems not to have intertwined itself with the general world of finance in such a way that bad news for the former would have to be bad news for the latter.

So ... we may in fact be threading this needle.

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