Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Friday, June 12, 2015
The Fallacies of GDP Economic Statistics / Economics / Economic Statistics
The common error of confusing growth with progress goes largely unnoticed, though it permeates all macroeconomic analysis. There is no better example of this mistake than the fallacies behind the interpretation of Gross Domestic Product. GDP is the market value of all final goods and services in a given year. As such, it is only an accounting identity reflecting the quantity of money in the economy.
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Thursday, June 11, 2015
Let’s Hope Machines Take Our Jobs: We Want Wealth, Not Jobs / Economics / Technology
Peter St. Onge writes: The job-threatening rise of the machines is an economically illiterate meme that refuses to die. We’re actually probably in the early stages of it, a bull-market in neo-luddism, if you will. Bastiat’s “Candlemakers Petititon” answered this one long ago, but today I’ll run a little thought experiment that owes it all to good old Bastiat.
Let’s say Weird Al Yankovic invents a machine capable of making everything with a single push of a button. The first thing he does is print up a bunch of machines and sell them for a ton. Weird Al is now a billionaire, and there are thousands of make-everything machines.
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Thursday, June 11, 2015
The Fed's Gift of Free Money: Return to Sender / Economics / Deflation
The real reason consumers aren't spending is not a matter of monetary policy; it's a matter of psychology
On June 2, the postman rang once -- and, boy, did he ring.
That day, the Wall Street Journal published a strongly worded letter titled, "Grand Central: A Letter to Stingy American Consumers," which included these notable passages:
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Wednesday, June 10, 2015
Fact Checking Paul Krugman's Claim To Be "Right About Everything", Krugtron the Invincible! / Economics / Economic Theory
Andrew Syrios writes: But can the debate really be as one-sided as I portray it? Well, look at the results: again and again, people on the opposite side prove to have used bad logic, bad data, the wrong historical analogies, or all of the above. I’m Krugtron the Invincible!
Thus wrote the great Paul Krugman. A man so modest as to proclaim that “I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.”
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Tuesday, June 09, 2015
A Six-Point Plan to Restore Economic Growth and Prosperity / Economics / Economic Theory
Three weeks ago I co-authored an op-ed for the Investor’s Business Daily with Stephen Moore, founder of the Club for Growth and former Wall Street Journal editorial board member, currently working with the Heritage Foundation. Our goal was to present a simple outline of the policies we need to pursue as a country in order to get us back to 3–4% annual GDP growth. As we note in the op-ed, Stephen and I have been engaging with a number of presidential candidates and with other economists around the topic of growth.
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Monday, June 08, 2015
Technology Needs Capital To Produce Economic Growth / Economics / Economic Theory
In his article “The Big Meh” Paul Krugman complains that despite all the information technology advances the effect so far has been negligible as far as economic growth is concerned.
Krugman writes “That the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines but modest economic results. Why? ... The answer is that I don’t know — but neither does anyone else.”
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Friday, June 05, 2015
US Jobs Table 9 BLS Data Dump / Economics / Employment
It seems the mainstream media is giddy with excitement over the 280,000 jobs supposedly created in May. The markets aren’t so happy, as good news is actually bad news. What excuse will Yellen and her fellow Wall Street puppets at the Federal Reserve use to not increase interest rates from emergency levels of 0.25%? The ten year Treasury rate immediately skyrocketed to 2.43% in seconds. It was at 1.64% in February. That’s a 46% decline in price in four months. Do you still think bonds are a safe investment? Guess what is tied to the 10 Year Treasury rate? Mortgage rates. There goes the fake housing recovery. Artificially high prices, higher mortgage rates, and young people unable to buy sounds like a perfect recipe for collapse.
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Thursday, June 04, 2015
Uptown Slowdown: The Rich Are Slowing Their Spending Now, Too! / Economics / US Economy
Recent statistics show that the affluent are rapidly slowing in their spending. Economists are surprised, as usual. We’re not. The beauty of demographic trends is that they allow us to see changes in spending well ahead. It’s the single best indicator we have for the economy.
This is even more important in a time when many leading indicators no longer work, thanks to an economy artificially manipulated by quantitative easing. What we know from our research is that the demographic blows have already started to hit us since 2007, but that they’ll get markedly worse through 2020 and 2022.
Wednesday, June 03, 2015
Even The Good Economic Numbers Are Bad / Economics / US Economy
US factory orders tanked again this morning, and were generally reported that way at first. To take just a few of the low-lights:
- Factory orders have declined in eight of the last nine months.
- Orders for transportation equipment fell 2.4 percent while orders for computers and consumer goods-related equipment also fell by varying amounts.
- Last month’s durable goods orders were revised to -0.3% from the original +1%.
- Business inventories remain at near-record high levels.
Monday, June 01, 2015
The Meaning of Financial Repression / Economics / Economic Theory
Mark Thornton writes: We live in a world of massive monetary inflation and extremely low interest rates. Mortgage rates are near historic lows and yet it seems that people cannot get loans. Home sales are up, but with a near record percentage of sales made with cash, rather than a mortgage. The unemployment rate is nearing “full employment” and yet a record number of people do not have jobs.
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Thursday, May 28, 2015
US Economy – Semi b2b Amps Up its Trend / Economics / US Economy
A quick review for newer subscribers: In Q1 2013 we noted that the Semiconductor Equipment industry was in “ramp up” mode per a personal source in the industry. After that pivotal period, we have relied on the Semi Equipment ‘book-to-bill’ ratio as a monthly checkup on what is often an important economic leading indicator. The Canary chirped in 2013 and it is still singing a sweet song today.
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Thursday, May 28, 2015
Austerity, Economics and Religion / Economics / Economic Theory
There are many things going on in the Greece vs Institutions+Germany negotiations, and many more on the fringe of the talks, with opinions being vented left and right, not least of all in the media, often driven more by a particular agenda than by facts or know-how.
What most fail to acknowledge is to what extent the position of the creditor institutions is powered by economic religion, and that is a shame, because it makes it very difficult for the average reader and viewer to understand what happens, and why.
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Wednesday, May 27, 2015
Bad News For China: Bernanke Says It’s Okay / Economics / China Economy
Former Fed chairman Ben Bernanke will be remembered by future generations as the guy who didn’t see a housing bubble while he was creating it.
That is, unless he says something even dumber, like this:
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Wednesday, May 27, 2015
Don't Drown in the Sea of Global Debt / Economics / Global Debt Crisis 2015
MoneyMorning.com Peter Krauth writes: Debt is the proverbial double-edged sword, offering access to costly assets, but sometimes driving overleveraged borrowers into bankruptcy.
Only politicians and some Keynesian economists could convince themselves – along with a good portion of the masses – that more debt is the solution to the world's already crushing levels.
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Wednesday, May 27, 2015
Why Economic Growth Is Impossible / Economics / Economic Theory
The quandary of the economic dilemma continues. A globe suffering from a deflationary financial impact, while consumer prices rise well above the reported cost of living increases, does not bode well that prospects of commercial growth can rescue the world economy. What changes can overcome this predicament? Well, some academic scholar’s offers serious concern that a long term rebound towards prosperity is no longer possible.
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Tuesday, May 26, 2015
GDP, Inflation, Employment Economic Statistics: It’s All a Lie / Economics / Economic Statistics
Rodney Johnson writes: I’m not much for glossing over the true state of affairs just to make things look better, which is why I take issue with many government reports.
When it comes to providing clear information on the economy, the U.S. government is more late-night pitchman than serious news anchor. And to make matters worse, many of the numbers they peddle have been “adjusted” so that reports show better results.
Monday, May 25, 2015
Into the Breach / Economics / Global Economy
Recently, I thought it would be fun to upgrade the turbo charger on my old car. No real good reason, other than it would be free (it was given to me) and interesting. It’s a very light car that feels like a little rocket (when it works)--a guilty pleasure.
One thing I hadn’t anticipated was the need for higher quality intake hoses to manage the extra air flow and exhaust heat. Over and over, I keep blowing hose connections. While the car still drives during periods, there is barely any power at all.
Saturday, May 23, 2015
Venezuela: No Rule of Law, Bad Money / Economics / Emerging Markets
The rule of law subjects the State to a fixed set of rules that limits the scope of its coercive powers. Individuals and their property are protected from the arbitrary, ad hoc actions of the State and other individuals. In consequence, individuals can plan their activities within the confines of known, fixed “rules of the game.” This allows people to pursue their personal ends, as long as their actions do not infringe on the broadly-defined property rights of their fellow citizens.
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Wednesday, May 20, 2015
Government Regulation and Economic Stagnation / Economics / Market Regulation
Peter St. Onge writes: One of the more interesting economic debates in the past couple of decades is why the economy is slowing down.
Since 2000, per capita GDP growth in the US has been 0.9 percent per year, compared to 2.3 percent per year in the previous fifty years. This is a big difference: at 2.3 percent growth we double in wealth every generation. At 0.9 percent it takes us close to a century to double. So why the slowdown?
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Wednesday, May 20, 2015
UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt / Economics / Inflation
DEFLATION! The mainstream broadcast press appears to have swallowed the Bank of England's deflation economic propaganda hook line and sinker as they regurgitate the dangers of deflation following release of UK CPI inflation for April of -0.1% prompting headline grabbing warnings of the dangers of falling prices, the dangers of debt not being eroded by inflation, the dangers of people not spending as they wait for prices to fall, the dangers of ... you get the picture as the Bank of England sets the scene for their very own 007 Mark Carney to come to Britain's rescue with his magic PPK INFLATION gun, by promising that the Bank of England will keep price stability by aiming to bring the official CPI inflation rate back to 2%, and thus 007 Mark Carney saves Britain from the Spectre of Deflation.
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