Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, March 13, 2014
Inflating Assest Prices - Why the Wealth Effect Doesn’t Work / Economics / Economic Theory
By: MISES
Chris Casey writes: Higher equity prices will boost consumer wealth and help increase confidence, which can spur spending. — Ben Bernanke, 2010[1]
Across all financial media, between both political parties, and among most mainstream economists, the “wealth effect” is noted, promoted, and touted. The refrain is constant and the message seemingly simple: by increasing people wealth through rising stock and housing prices, the populace will increase their consumer spending which will spur economic growth. Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness.[2] Such is the purpose of this article. The wealth effect is but a mantra without merit.
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Wednesday, March 12, 2014
Soros Warns Europe Faces 25 Years of Stagnation; Ukraine a Wake-Up Call - Video / Economics / European Union
By: Bloomberg
Billionaire investor George Soros discusses the crisis in Ukraine and Europe with Bloomberg Television's Francine Lacqua and said, Europe faces 25 years of Japanese-style stagnation unless politicians pursue further integration of the currency bloc and change policies that have discouraged banks from lending, "[Europe] may not survive 25 years of stagnation. You have to go further with the integration. You have to solve the banking problem, because Europe is lagging behind the rest of the world in sorting out its banks."
Sunday, March 09, 2014
Robert Johnson: New Perspectives For Economics / Economics / Economic Theory
By: Jesse
Some of Johnson's remarks are extraordinarily insightful.
I enjoyed his comments on the modern preoccupation with modeling. But I do think his looking back to the Thirty Years War for the trend towards abstract theory over the empirical method in general is a bit of a stretch. But it was kind of cool to think about it.
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Sunday, March 09, 2014
Economic Myth Busters – The Minimum Wage / Economics / Economic Theory
By: Andy_Sutton
It has been quite some time since we did a ‘Myth Busters’, even though there obviously remains quite a bit of mythology. So we’re going to chop away at it piece by piece and demonstrate once again that the media, government, and what I like to the call the ‘establishment’ (which is the concatenation of the aforementioned and the banksters) couldn’t give a rip about the truth. The establishment only cares about what is expedient and convenient for itself.
Saturday, March 08, 2014
Weakening U.S. Economy Weather or Not? / Economics / US Economy
By: Peter_Schiff
Everyone agrees that the winter just now winding down (hopefully) has been brutal for most Americans. And while it's easy to conclude that the Polar Vortex has been responsible for an excess of school shutdowns and ice related traffic snarls, it's much harder to conclude that the it's responsible for the economic vortex that appears to have swallowed the American economy over the past three months. But this hasn't stopped economists, Fed officials, and media analysts from making this unequivocal assertion. In reality the weather is not what's ailing us. It's just the latest straw being grasped at by those who believe that the phony recovery engineered by the Fed is real and lasting. The April thaw is not far off. Unfortunately the economy is likely to stay frozen for some time to come.Read full article... Read full article...
Friday, March 07, 2014
Long Term Change from Average Earnings Growth above RPI to AEI below RPI / Economics / Earnings
By: Jonathan_Davis
There are many reasons why the evidence is building that we, in the West, may be #TurningJapanese (it’s a Twitterese I coined). Japan experienced deflation for over 20 years, had a generational depression and stocks and property fell 80%, from 1989 to 2012.
Thursday, March 06, 2014
How Inflation Destroys the Wealth of Nations / Economics / Inflation
By: Joseph_T_Salerno
Brendan Brown is a rara avis — a practicing financial economist and shrewd observer of financial markets, players, and policies, whose prolific writings are informed by profound theoretical insight. Dr. Brown writes in plain English yet can also turn a phrase with the best. “Monetary terror” vividly and succinctly characterizes the policy of the Fed and the ECB (European Central Bank) to deliberately create inflationary expectations in markets for goods and services as a cure for economic contraction; the “virus attack” of asset price inflation well describes the unforeseeable suddenness, timing, and point of origin of asset price increases caused by central bank manipulation of long-term interest rates and the unpredictable and erratic path the inflation takes through the various asset markets both domestically and abroad.
Thursday, March 06, 2014
What Needs to Happen Before We See a Big Economic Recovery? / Economics / Economic Recovery
By: F_F_Wiley
In a Bloomberg article last May, Caroline Baum summed up the economy nicely in a single question:
Four-and-a-half years of an overnight rate near zero and aggressive securities purchases by the Fed have succeeded in raising asset prices. The question is whether higher asset prices will deliver jobs and economic growth before they become destabilizing.
In other words, will the real economy mend before excessive financial risk-taking kills the patient?
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Wednesday, March 05, 2014
Bastiat's Paradox, Broken Windows, Deficit Spending And War / Economics / Economic Theory
By: Andrew_McKillop
Frederic Bastiat's early 19th century paradox is easy to recycle today. If the West, we mean a certain small number of gung-ho steroid-fed European politicians and their lookalikes in the USA, decided to borrow and spend what it takes to “call a war” with Putin's Russia to defend the Crimea against the violation of Ukraine's territorial integrity, would the net economic result be win-win or lose-lose?
Tuesday, March 04, 2014
U.S. Real Disposable Income Per Capita Analysis / Economics / Economic Statistics
By: PhilStockWorld
Courtesy of Doug Short: This morning I posted my latest Big Four update, which included today’s release of the January data for Real Personal Income Less Transfer Payments. Now let’s take a closer look at a rather different calculation of incomes: “Real” Disposable Personal Income Per Capita.
The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator has been significantly disrupted by the bizarre but not unexpected oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013.
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Monday, March 03, 2014
Anti-Logic and the Keynesian Economic “Stimulus” / Economics / Economic Theory
By: William_Anderson
American political culture always seems to be “celebrating” the anniversary of something, be it JFK’s assassination (we just passed the 50th anniversary of that sad event) or the signing of some (mostly bad) legislation. The latest political activity to be enshrined with an anniversary is the so-called stimulus, the $800 billion monstrosity passed five years ago ostensibly to “put America back to work.”
Monday, March 03, 2014
Is Bad Weather Behind Weak US Economic Trends? / Economics / US Economy
By: Frank_Shostak
Some key US economic data shows visible weakening. The National Association of Home Builders/Wells Fargo sentiment index slumped to 46 in February from 56 in January.
The New York Federal Reserve Bank’s Empire State general business conditions index fell to 4.48 in February from 12.51 the month before.
Saturday, March 01, 2014
What Can Nations Learn from Norway and Kuwait in Managing Sovereign Wealth Funds? / Economics / Sovereign Wealth Funds
By: Sam_Chee_Kong
To begin with what are Sovereign Wealth Funds? According to the Sovereign Wealth Fund Institute, a SWF can be defined as follows.
“A Sovereign Wealth Fund entity is a state-owned investment fund established from balance of payment surpluses, official foreign exchange operations, the proceeds from privatizations, governmental transfer payments, fiscal surpluses and/or receipts resulting from resource exports”
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Saturday, March 01, 2014
Do U.S. Economic Reports Mean Anything This Time? / Economics / US Economy
By: Sy_Harding
Some of the Federal Reserve’s districts compile and release monthly economic reports for their regions.
In the last week or two, those reports were that the Fed’s Empire State (NY) Mfg Index plunged from 12.5 in January to 4.5 in February. The Fed’s Philadelphia Region Index plunged from a positive reading of + 9.4 in January to - 6.3 in February. The Dallas Fed’s Mfg Index dropped from 3.8 in January to 0.3 in February. The Richmond Fed’s Index plummeted from +12 in January to -6 in February.
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Wednesday, February 26, 2014
The High Price of Delaying the Debt Default / Economics / Global Debt Crisis 2014
By: Thorsten_Polleit
Credit is a wonderful tool that can help advance the division of labor, thereby increasing productivity and prosperity. The granting of credit enables savers to spread their income over time, as they prefer. By taking out loans, investors can implement productive spending plans that they would be unable to afford using their own resources.
The economically beneficial effects of credit can only come about, however, if the underlying credit and monetary system is solidly based on free-market principles. And here is a major problem for today’s economies: the prevailing credit and monetary regime is irreconcilable with the free market system.
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Tuesday, February 25, 2014
Reviving the ‘Real World’ Scenario That’s Disappeared from Government Reports / Economics / Economic Statistics
By: Submissions
F. Wiley writes: For 50 years or so the federal government has deliberately and to an increasing extent misstated probable future budget deficits. Democrats and Republicans are guilty. The White House is guilty. And so is Congress. Private firms that deliberately misrepresent their financial statements in this fashion would be guilty of a crime… The magnitude of the misrepresentation is breathtaking. - Former St. Louis Federal Reserve Bank President William Poole, writing in the Wall Street Journal last April
Monday, February 24, 2014
Disappointing U.S. Economic Data - Whether or Not it's the Weather / Economics / US Economy
By: Michael_Pento
Wall Street and Washington have summarily dismissed the recent spate of disappointing economic data by claiming it is solely based upon the weather. The equity market is 100% convinced that winter is to blame for the faltering economy; and that even if stocks have it all wrong, Ms. Yellen and co. will immediately print enough money to make everything ok.
Sunday, February 23, 2014
The US Great Depression 1920/21 / Economics / Economic Depression
By: Jonathan_Davis
Never heard of it?
Come on sure you have. You know of the Great Depression of the 1930s. So you must know of the Great Depression of 1920/21.
No?
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Friday, February 21, 2014
U.S. Economy Weather Impact Narrative Getting Confusing / Economics / US Economy
By: Ronan_Keenan
The “weather impact” debate has been ongoing for much of this year and looks set to continue for a while longer. Initially there seemed to be a clear narrative that colder-than-normal temperatures were slowing economic activity and markets seemed to gladly discount weak figures. But several data releases this week have brought confusion to the tidy story.
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Thursday, February 20, 2014
Deadly Deflation Myths / Economics / Deflation
By: Dan_Amerman
As will be demonstrated herein, using both historical and present-day events, key aspects of current deflationary theory can be characterized as the combination of 1) an absurdity; 2) a misunderstanding; and 3) an oversimplification; all working together to create 4) a serious danger for investors.
Few questions are of greater concern for investors than: "will it be inflation or deflation that will dominate the coming years?"
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