Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Friday, February 12, 2021
Bubblicious Asset Prices, Debt Dependency, Economic Collapse / Economics / Coronavirus Depression
By: Kelsey_Williams
The words bubbly and delicious might be more descriptively accurate when talking about champagne. However, it is not too difficult to imagine giddy salivation among the owners of Bitcoin, or Tesla stock.
And, while some might be more stringent in their terms of definition and applicability, investors in stocks, bonds, real estate, etc. – pretty much anything with a $ sign in front of it – might want to rethink the current state of affairs as it pertains to valuation of their financial assets.
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Friday, February 12, 2021
UK Real Inflation is 15% to 20% - Grocery Price Rises Due to Rampant Money Printing / Economics / Inflation
By: Nadeem_Walayat
The Government and Bank of England would have you believe that Inflation is not a problem as they continue to focus the masses on their fake conjured out of thin air inflation indices such as CPI at just 1.4%, so as to allow the theft of real purchasing power to continue unabated as the government goes on an annual £400 billion spending spree, racking up debt that the Bank of England is busy monetization though QE, all so as to suppress real interest rates giving the illusion that the consumers are getting a free lunch, i.e. rampant government money printing deficit spending all without any inflationary consequences that the morons in the mainstream financial press are more than happy to regurgitate. However REAL inflation, that which people experience when they do their weekly shops is far higher than the fake 1.4%, REAL Inflation is at LEAST 15% and more like 20% as that is what happens when the Government starts paying 1/3rd of the workforce to stay at home, as has been the case for most of 2020 and continuing into 2021.
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Thursday, February 11, 2021
The Gripping Hand Holds Inflation / Economics / Coronavirus Depression
By: John_Mauldin
The question people ask me most often is when the US will see inflation.
Not to be a two-handed economist ("on the one/other hand"), but it's really the third hand—the gripping hand, which has the least dexterity and the most strength—that holds the answer.
The thing is, you cannot predict inflation or deflation until you know what happens with COVID-19 this summer.
The good news is that US vaccinations are accelerating. States and the federal government are working out bugs in the process. Supply constraints are easing a bit. It is still going much too slowly, but was always going to be an ordeal. The single-dose Johnson & Johnson vaccine should be approved soon and will help give everyone a chance to be vaccinated by this summer.
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Thursday, January 28, 2021
Captain Biden now Piloting MMT Adventure / Economics / Coronavirus Depression
By: Richard_Mills
Gold may have come off the boil after rising above $1,900 an ounce in the aftermath of the US election, but the precious metal, and its sister silver, will do very well under a Biden presidency, an Ahead of the Herd analysis has found.
The main factors are drastically increased government spending, leading to even more unsustainable US debt levels than currently, along with rising inflation; dovish monetary policy as the Federal Reserve continues to advocate near 0% interest rates; and a sinking US dollar. Gold prices and the USD generally move in opposite directions.
Covid spending ‘out the wazoo’
Within the current structural bull market for gold, the antecedents of the next phase are in the spending promises of President-elect Joe Biden.
Biden, despite claiming otherwise, believes strongly in the power of the state to tax and spend, and will face overwhelming pressure from the left wing of the Democratic Party – supporters of hard-left progressives like Elizabeth Warren, Alexandria Ocasio-Cortez and Bernie Sanders – to toe the party line. A long wish list waits to be filled, with little to no concern regarding the already out of control $28 billion national debt, courtesy of Modern Monetary Theory, or MMT.
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Thursday, January 28, 2021
China's Accelerated Economic Recovery Key to Global Growth / Economics / China Economy
By: Dan_Steinbock
Unlike other major economies, China has rebounded and its recovery is accelerating. It could fuel a third of global economic growth in 2021.
With the Spring Festival holidays just weeks away, recent resurgences of COVID-19 infections in Jilin province and Shijiazhuang, Hebei province have renewed concerns about sporadic outbreaks.
China’s public-health authorities believe a major outbreak of the novel coronavirus in the Chinese mainland is unlikely. The authorities have taken strong containment measures to rapidly identify, isolate and control potential outbreaks.
Nonetheless, despite the holidays, Chinese people have been urged to avoid travels, to keep the infection rate under control. Downside risks permit no complacency in the foreseeable future.
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Tuesday, January 26, 2021
4 Economic Challenges for 2021 / Economics / Coronavirus Depression
By: John_Mauldin
This year will bring several economic challenges in the U.S.—some we may not yet foresee. But I can already identify at least four.
First, the coronavirus pandemic is permanently changing certain parts of the economy.
I’ll start with the one most familiar to me: business travel. It came to a screeching halt last spring. Airlines, hotels, and so on since recovered a little but are nowhere near normal, nor are most profitable. They’re just holding on.
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Monday, January 25, 2021
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String / Economics / Coronavirus Depression
By: Kelsey_Williams
The word stimulus has become an oft-repeated term, sometimes overused. We are referring to the non-biological meaning below.
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Sunday, January 24, 2021
4 Reasons for Coronavirus 2021 Hope / Economics / Coronavirus Depression
By: John_Mauldin
2021 may feel more like an extension of 2020 rather than a fresh start. But take heart—there is plenty of good news out there.
Here are four things to be hopeful about today:
First, we now have weapons against the coronavirus. The US has two approved vaccines. England, China and Russia have developed their own. Additional vaccines are under development and will likely be available later this year.
These will be game-changers if we manage to deploy them widely and quickly. Which, I admit, is a big “if.”
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Friday, January 22, 2021
2021: The Year of the Gripping Hand / Economics / Coronavirus Depression
By: John_Mauldin
Harry Truman famously asked for a one-handed economist so he could stop hearing, “On the one hand, but then on the other hand.”
But what if we had three hands?
Larry Niven and Jerry Pournelle's 1974 book, "The Mote in God’s Eye," features an alien species with three arms. It has two “normal” hands and a stronger, but less dexterous one called the “gripping hand.”
Tuesday, January 05, 2021
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB / Economics / Inflation
By: Kelsey_Williams
As of November 30th, the annual inflation rate for the year 2020 is 1.17% (CPI). And it is not likely to get a whole lot worse anytime soon.
When the Federal Reserve responded to the financial crisis of 2007-08 with hugely unprecedented monetary expansion efforts, many thought that it would lead to runaway inflation and collapse of the U.S. dollar. It didn’t; and the expected higher inflation rates did not occur.
What did happen is that consumer prices remained reasonably stable and we even saw lower prices in 2009 and 2015.
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Thursday, December 31, 2020
US Economy GDP 2021 / Economics / US Economy
By: Michael_Pento
Wall Street is universally bullish on the economy and stock market for 2021. For example, Morgan Stanley is on record predicting the U.S. economy will expand by 5.9% next year. The stock market has front-run this optimism. The most important valuation metric, total market cap to GDP, currently stands at an unprecedented 185%. This absurd valuation only makes sense if investors believe corporate profits will skyrocket next year. No other bull market in history even comes close to this historic distortion between the price of stocks and the underlying economy.Read full article... Read full article...
Saturday, December 26, 2020
Tackling US Infrastructure and Unemployment Crises: The “American System” Solution / Economics / Government Spending
By: Ellen_Brown
A self-funding national infrastructure bank modeled on the “American System” of Alexander Hamilton, Abraham Lincoln, and Franklin D. Roosevelt would help solve not one but two of the country’s biggest problems.
Millions of Americans have joined the ranks of the unemployed, and government relief checks and savings are running out; meanwhile, the country still needs trillions of dollars in infrastructure. Putting the unemployed to work on those infrastructure projects seems an obvious solution, especially given that the $600 or $700 stimulus checks Congress is planning on issuing will do little to address the growing crisis. Various plans for solving the infrastructure crisis involving public-private partnerships have been proposed, but they’ll invariably result in private investors reaping the profits while the public bears the costs and liabilities. We have relied for too long on private, often global, capital, while the Chinese run circles around us building infrastructure with credit simply created on the books of their government-owned banks.
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Thursday, December 24, 2020
US Fed Recommits to Misleading the Public About Inflation / Economics / Inflation
By: MoneyMetals
Did the Federal Reserve just usher in the next phase of the U.S. dollar’s decline?
On Wednesday, the central bank recommitted to leaving its benchmark interest rate near zero for the foreseeable future.
Fed officials also vowed to keep pumping cash into financial markets.
Following Fed chairman Jerome Powell’s remarks, the wavering U.S. Dollar Index turned down – hitting a fresh new low for the year. Gold gained modestly on the day while silver got a bigger boost to close solidly above $25/oz, promptly heading to $26/oz the day following.
Precious metals markets have been basing out over the past several weeks. They are struggling to attract safe-haven demand amid record runs in stocks and Bitcoin.
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Friday, December 11, 2020
We Can’t Wait Any Longer for More Coronavirus Relief / Economics / Coronavirus Depression
By: John_Mauldin
The Federal Reserve acted quickly last March, cutting rates and launching a massive asset purchase program. Congress helped with a giant fiscal aid package.
Together, these jolted the economy back to life. The jolt wasn’t permanent, however.
The economic patient is now wavering again. This time, despite pleas from Fed Chairman Jerome Powell that monetary policy has reached its limits, the fiscal part of the cure is not forthcoming.
Ah, but “limits” don’t really apply to central bankers. Not the central bank of the world’s largest economy and issuer of the global reserve currency.
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Thursday, December 10, 2020
The Economic Implications of Colossal Global Infrastructure Funding Deficit / Economics / Infrastructure
By: Richard_Mills
Unprecedented times call for unprecedented measures. As the saying goes, governments around the globe have taken drastic action to support their respective economies in the wake of the pandemic.
Within the first two months of the crisis, more than $10 trillion in relief packages were announced worldwide. This was three times more than the response to the 2008-2009 financial crisis.
As the leading world power, the US has already injected nearly 14% of last year’s GDP to rejuvenate its economy, according to Statista. This equates to about $3 trillion in money being printed.
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Friday, December 04, 2020
Pre-COVID US Economy Wasn’t All That Great Either / Economics / US Economy
By: Michael_Pento
The stock market and economy appear to be doing ok for the moment, as the incredibly dangerous bubble inflates further. This optimism is predicated on a plethora of COVID-19 Vaccines, which are projected to bring the economy back to its pre-COVID state of health. However, the problem with this line of thinking is that 2019 was anything but normal and healthy. It was a messy combination of a Fed slashing interest rates and re-imposing QE in order to achieve a rather mundane GDP growth rate of just 2.2%. The truth is, the pre-virus economic construct was built on Silly Sand—erected on top of asset bubbles, artificial interest rates and an avalanche of new debt issuance.
Not only will a return to “normalcy” merely bring us back to an anemic and non-viable economy, I want to highlight three things I’m watching out for during 2021 that could upend the economy and markets.
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Sunday, November 29, 2020
Look at These 2 Big Warning Signs for the U.S. Economy / Economics / Coronavirus Depression
By: EWI
Interestingly, this economic measure's "retracement of the decline from February is a Fibonacci 61%"
The 7.4% GDP growth in Q3 notwithstanding, the evidence shows that the U.S. economy remains fragile.
Let's start off with this chart and commentary from the November Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets:
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Friday, November 20, 2020
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery / Economics / Asian Economies
By: Dan_Steinbock
After four long years of diminished prospects, stagnation and divisive geopolitics, four summits could show the way toward a better future.
Recently, Moscow hosted the 12th BRICS Summit. Malaysia is hosting the APEC Summit. And Riyadh will welcome the world leaders into the highly-anticipated G20 conference.
Importantly, these high-level events followed the signing of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free-trade pact, which could help build multiple new paths toward a shared future.
The global economy is expected to shrink by 5 percent in 2020. World trade is likely to plummet by 20 percent. After misguided trade wars and the pandemic, global cooperation across all differences is vital to defeat the pandemic and facilitate economic recovery.
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Tuesday, November 03, 2020
China’s New 15-Year Vision: ‘Dual Circulation’ to Sustainable Growth / Economics / China Economy
By: Dan_Steinbock
While the coronavirus fallout is still escalating in Western economies, China’s rebound has begun. Global recovery requires multilateral cooperation that China's new development pattern seeks to foster.
Last week, the 19th Central Committee of the Communist Party of China (CPC) completed its fifth plenary session in Beijing.
Unlike all other major countries, China’s economy is rebounding and fueling global prospects.
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Friday, October 23, 2020
Sayonara U.S.A. / Economics / US Economy
By: Michael_Pento
The Japanese word for goodbye is Sayonara. But it doesn’t just mean goodbye, it means goodbye forever. Unfortunately, that is what our country is doing to American Capitalism.
In the quixotic fantasy world of Keynesian economics, the more money a government borrows and prints the healthier the economy will become. Those who adhere to this philosophy also believe such profligacy comes without any negative economic consequences in the long run. This specious dogma contends that it is ok for a government to dig further into a big deficit hole during a recession because massive public spending will help the economy to climb out faster. And then, a government can cut spending in the good times, which leads to big budget surpluses.
The trouble with this theory is the time never arrives to bring the scales into balance. Case in point, during the pre-pandemic year 2019, the U.S. had a deficit that was equal to 5% of GDP—one of the worst figures since WWII. This deficit occurred during a time which was purported to be one of the best economies in history. Today, there are negotiations for yet another “stimulus” package after having already spending $3 trillion (15% of GDP) earlier this year. Speaker Pelosi and the Democrats want to spend another $2.2 trillion and Republican President Trump says, “I would like to see a bigger stimulus package, frankly, than either the democrats or Republicans are offering.”
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