Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Saturday, November 01, 2014
The Most Important U.S. Economic Charts You'll See / Economics / US Economy
By: DailyWealth
David Eifrig writes: The market is crashing... Ebola is running rampant... Look out for cloaked and bearded ISIS warriors.
You can always find a lot of fear-mongering in the news and in financial markets. Right now, it appears to be a particularly worrisome time.
Most of it is nonsense...
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Saturday, November 01, 2014
US Now Importing the World's Deflation / Economics / Deflation
By: John_Rubino
With US QE about to end, the rest of the world faced the prospect of another "taper tantrum" financial crisis, one that this time around could suck the world into a deflationary vortex. So it should come as no surprise that the end of QE was countered with a series of offsetting treats for the global financial markets:
• The US Fed promised to keep interest rates low for a really long time.
• The European Central Bank announced that in November it would start buying asset backed bonds, in effect beginning an open-ended, potentially huge debt monetization program of its own.
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Friday, October 31, 2014
The Deflation Boogeyman / Economics / Deflation
By: Frank_Hollenbeck
Here we go again. A plunge in oil prices has spurred a bevy of articles from the bought-and-paid-for media, as well as quasi-governmental agencies, alerting us of pending disaster if deflation were allowed to make an entrance, however briefly. Never mind that there is no theoretical or empirical evidence to justify this fear of deflation. (explanation here) According to the St. Louis Fed:
“While the idea of lower prices may sound attractive, deflation is a real concern for several reasons. Deflation discourages spending and investment because consumers, expecting prices to fall further, delay purchases, preferring instead to save and wait for even lower prices. Decreased spending, in turn, lowers company sales and profits, which eventually increases unemployment.”
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Wednesday, October 29, 2014
As the Eurozone Economy Stalls, China Cuts the Red Tape / Economics / China Economy
By: Frank_Holmes
Forty-four percent. That's the alarming unemployment rate for those aged 15 to 25 in Italy, where I traveled recently to meet with other global chief executives and business leaders.
The reason for Italy's high youth unemployment? Tortuous red tape, high taxation and thuggish unions. Many of the CEOs at the event I attended noted that Italy is mired in unionization. This has created a restrictive jobs market that crowds out well-educated, aspirational young people, many of whom are forced to flee their homes and seek work elsewhere.
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Wednesday, October 29, 2014
Bulgaria: Liquidate KTB, Now / Economics / Eastern Europe
By: Steve_H_Hanke
The long-awaited audit of the Corporate Commercial Bank’s (KTB’s) assets has been released by the Bulgarian National Bank (BNB). In its wake, a debate has arisen about the future of the KTB: Should it be recapitalized? And if KTB is recapitalized, should the Bulgarian or the European authorities be responsible? However, it is clear from the results of the audit that, once the obscurity of the technocratic arguments is stripped away, there can be no debate. KTB should be liquidated as soon as possible, and whatever proceeds can be obtained in liquidation should be used to reimburse guarantees to depositors paid from the Bulgarian Deposit Insurance Fund (BDIF).
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Tuesday, October 28, 2014
U.S. Economic Snapshot - Strong Dollar Eating into corporate Profits / Economics / US Economy
By: Gary_Tanashian
Our view has been that a stronger US dollar would eventually start to eat away at corporate results, especially in the manufacturing sector and at US based companies with a global customer base. The decline in revenues thus far is something to be watched because where revenues go, earnings eventually follow.
[edit: the segment previous to this one reviewed a contrast between strong earnings and sagging revenues with companies that have reported earnings thus far]
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Tuesday, October 28, 2014
Functional Economics - Getting Your House in Order / Economics / Economic Theory
By: Dr_Jeff_Lewis
Old Habits Reappear
Fighting the Fear of Fear
Growing Conspiracy
Myself Is after Me
Frayed Ends of Sanity
Hear Them Calling
Frayed Ends of Sanity
Hear Them Calling
Hear Them Calling Me
- Frayed Ends of Sanity, Metallica
Sunday, October 26, 2014
Why Money Doesn’t Measure Value / Economics / Fiat Currency
By: Robert_Murphy
Anyone who knows him personally would attest that David Gordon is a troublemaker. He lived up to this label with a recent review of the new book by Steve Forbes and Elizabeth Ames. Gordon took them to task for referring to money as a measure of value, analogous to a ruler or clock; Gordon cited the authority of Ludwig von Mises while rejecting such a view. In a previous post here at Mises Canada, I then defended Gordon from the reply of John Tamny. Yet now I see that economist Marc Miles has jumped in the fray, also thinking that Gordon is ignorant of basic economics.
Saturday, October 25, 2014
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? / Economics / Deflation
By: Mike_Shedlock
There's some interesting discussion points in the UK-based Absolute Return Partners October 2014 Letter, by Niels C. Jensen, most of which I agree with, others not.
Japan-Style Deflation in Our Backyard?Read full article... Read full article...It is no secret that we have been long-standing believers in deflation being a more probable outcome of the 2008-09 crisis than high inflation. What has changed over the past six months is that the world has begun to move in different directions. Whereas rising unit labour costs in the U.S. make outright deflation in that country quite unlikely, the same cannot be said of the Eurozone.
Thursday, October 23, 2014
U.S. Economy Faltering Momentum, Debt and Asset Bubbles / Economics / US Economy
By: John_Mauldin
I featured the thinking of Dr. Lacy Hunt on the velocity of money and its relationship to developed-world overindebtedness and the potential for deflation in this week’s Thoughts from the Frontline, and I thought you’d like to peruse Lacy’s entire recent piece on the subject.
Lacy takes the US, Europe, and Japan one by one, examining the velocity of money (V) in each economy and bolstering the principle, first proposed by Irving Fisher in 1933, that V is critically influenced by the productivity of debt. Then, turning to the equation of exchange (M*V=Nominal GDP, where M is money supply), he demonstrates that we shouldn’t be the least bit surprised by sluggish global growth and had better be on the lookout for global deflation.
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Wednesday, October 22, 2014
The Last Days Of The Economic Growth Story / Economics / Economic Theory
By: Raul_I_Meijer
I am thinking about the similarities between a financial crisis and for instance a family crisis, the death of a loved one or close friend, a divorce, or a personal bankruptcy.
And I wonder why in the case of our recent (aka current) financial crisis, we allow nothing to enter our communications, and our train of thought, but the idea of recovery and a return to growth. Has everyone always reacted that way after earlier financial crises – history is full of them -, or is something else going on?
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Tuesday, October 21, 2014
The Fed’s New Labor-Market Measure / Economics / Employment
By: Frank_Shostak
Economists at the Federal Reserve have devised a new indicator, which they hold will enable US central bank policymakers to get better information regarding the state of the labor market. The metric is labeled as the Labor Market Conditions Index (LMCI).
Note that one of the key data points Fed policymakers are paying attention to is the labor market. The state of this market dictates the type of monetary policy that is going to be implemented.
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Tuesday, October 21, 2014
The Similarities Between Germany and China / Economics / GeoPolitics
By: STRATFOR
I returned last weekend from a monthlong trip to both East Asia and Europe. I discovered three things: First, the Europeans were obsessed with Germany and concerned about Russia. Second, the Asians were obsessed with China and concerned about Japan. Third, visiting seven countries from the Pacific to the Atlantic in 29 days brings you to a unique state of consciousness, in which the only color is gray and knowing the number of your hotel room in your current city, as opposed to the one two cities ago, is an achievement.
Tuesday, October 21, 2014
The Death Rattle of Europe’s Statist Dream / Economics / Euro-Zone
By: Rick_Ackerman
Europe’s all-too-predictable relapse into recession is gathering force, threatening not only the pipe dream of economic and political unity, but eroding grandiose illusions that have helped prop up the world’s financial house of cards. The unwillingness of France in particular to play by the EU’s — i.e., Germany’s — rules appears to have doomed the EU dream. The idea of a borderless Europe bound by a common currency and a shared desire to forever banish war from the Continent was a lofty one, but it was mired from the start in deeply rooted political animosities, grass-roots skepticism and bureaucratic overreach. Now these problems, along with a great many others, have turned the EU project into a Tower of Babel. A million pages of meticulously codified EU rules might as well have been written in cuneiform, so inscrutable and arcane have they become.
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Monday, October 20, 2014
Challenge to Keynesians 'Prove Rising Prices Provide an Overall Economic Benefit' / Economics / Economic Theory
By: Mike_Shedlock
The ECB has been concerned about falling consumer prices. I propose that's 100% stupid, yet that's the concern.
When the euro declined vs. the US dollar, the ECB was happy that inflation would inch back up. The fear now is that falling oil prices will take away the alleged gain of a falling euro.
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Sunday, October 19, 2014
'Confidence' Is a Corollary of a Fiat Culture / Economics / Fiat Currency
By: Jesse
Economists are fretting about the current notion that the US is caught in a secular stagnation. They are concerned because they believe that this is what is driving stock prices lower. And lower stock market prices are upsetting to their masters.
They are concerned that people are believing in stagnation as a sort of urban myth, and that makes it real. Seriously. Belief is not an effect, but a primary cause in their minds.
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Sunday, October 19, 2014
Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End / Economics / Inflation
By: Joseph_T_Salerno
There are strong indications that the remarkable run up of asset prices in the last few years is beginning to run out of steam and may be on the verge of collapse. We will leave aside the question of whether the asset inflation is symptomatic of a garden-variety inflationary boom or is a more virulent bubble phenomenon in which prices are rising today simply because buyers anticipate that they will rise tomorrow.
Friday, October 17, 2014
Why The Business Cycle is Failing / Economics / Business Cycles
By: Alasdair_Macleod
Since WW2 economic theorists have posited that demand in the economy could be stimulated by a combination of deficit spending by the government and by suppressing interest rates. The separation of demand from production was promoted by Keynes and interest rate management of the economy by monetarists, though there is considerable overlap between the two. Yet no progress in economic management has been achieved: instead we appear to be on the brink of a major economic dislocation.
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Friday, October 17, 2014
America Flirts With Deflation / Economics / Deflation
By: Raul_I_Meijer
“When it becomes serious, you have to lie,” said brand-new EC head Jean-Claude Juncker back in May 2011. I’m thinking the last few days have been serious enough to warrant some real whoppers from Brussels. And beyond.
Yesterday, one hour after the S&P reached its low point, not only was it deemed necessary to bring out the Plunge Protection Team, Fed grey head Janet Yellen was trotted out as well to soothe the dark mood with rosy tales about the US economy.
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Thursday, October 16, 2014
The Inflation Imputation, Dear Saver, May You RIP / Economics / Inflation
By: John_Mauldin
A note has been circulating among economists, calling into question the wisdom of another group of economists who wrote an open letter to the Federal Reserve a few years ago suggesting that one of the risks of their quantitative easing program was increased inflation. Since we have not seen CPI inflation, this latter group is calling upon the former to admit they were wrong, that quantitative easing does not in fact cause inflation. To no one’s surprise, Paul Krugman has written rather nastily and arrogantly about the lack of CPI inflation.