Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, May 21, 2013
Hot Money, Cold Credit - Misguided Monetary Policy / Economics / Money Supply
By: Steve_H_Hanke
Money matters — it’s a maxim of Prof. Milton Friedman that I repeat often in my columns. Since the Northern Rock bank run of 2007 — the "opening shot" of the financial crisis — the money supply, broadly measured, in the United States, Great Britain, and the Eurozone has taken a beating. Recently, in the United States, money supply growth has started to rebound, but only slightly. In the U.K. and the Eurozone, things are much worse. This is cause for concern, because the quantity of money and nominal gross domestic product are closely related.
Not surprisingly, in the U.S., growth has been anemic, at best. In the U.K., the economy has fluctuated between stagnation and recession. And, in Europe, growth has been replaced by the Eurozone’s longest recession ever. Indeed, 9 of 17 E.U. countries that use the euro are in a recession, including France, and Eurozone unemployment sits at a record 12.1%.
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Tuesday, May 21, 2013
Economic Philosophy And The New Cycle / Economics / Economic Theory
By: Andrew_McKillop
DENY THE NEGATION
Unknown to many, the dominant political economic doctrine of today, certainly in the OECD countries is the "liberal market doctrine" was built on denial. Since the 2008 crisis, this doctrine has become a mix-and-mingle of 1980s Neoliberalism plus a rejuvenated or reycled 1940s Keynesianism. In other words there is non-intervention in markets, certainly when it concerns fighting near-total monopolies like Microsoft or Google or finding the populace a job, plus massive state borrowing and bail outs of Bad Banks, called too big to fail. The principle is:
Sunday, May 19, 2013
Let’s Export Our Deflation - All Japan, All the Time / Economics / Deflation
By: John_Mauldin
The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then we must be content to return, quo ad hoc, to the savage state, to recur to barter in the exchange of our property, for want of a stable, common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers. –Thomas Jefferson, in a letter to John Adams, 21 March 1819
Thursday, May 16, 2013
Why Jim Chanos is Wrong About China's "Ghost Cities" / Economics / China Economy
By: Money_Morning
Greg Madison writes: China's "ghost cities" present the West with the shocking images of vast urban areas that sit nearly empty.
In a striking report, shown recently on CBS News' "60 Minutes,"there are rows of high-rise apartment buildings, tracts full of suburban American-sized detached homes and imposing government edifices in China's western desert that are empty and utterly devoid of any signs of life.
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Wednesday, May 15, 2013
Prohibition Caused the Greatness of Gatsby / Economics / Government Intervention
By: Mark_Thornton
The new adaptation of F. Scott Fitzgerald’s The Great Gatsby is a good movie, but it is no indictment against capitalism, as some may contend. It is rather an implicit condemnation of government prohibition.
When I read the book in high school I did not like it. I found it hard to read, not because it was overly complicated or poorly done, but because of the subject matter. The book (as well as the movie) dwells on decadence, licentiousness, promiscuity, and recklessness, or what was called “luxury” in the old days. I have an aversion to all that, and there was only so much I could take.
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Wednesday, May 15, 2013
BRICs Are a Bust, South Korea is Only Real Economy Left in the World / Economics / South Korea
By: Money_Morning
Martin Hutchinson writes: With most of the world's major economies running the printing presses to the point where it's becoming absurd, there's one country out there that is in the catbird seat when it comes to a strong, stable economy, growing export markets and strong stable companies.
And it's only going to get better.
Yes, there's a world of opportunity out there, but for all the good there are some serious risks in the usual investing suspects:
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Tuesday, May 14, 2013
How the Fed Undermines the Econcomy - Stable Prices, Unstable Markets / Economics / Inflation
By: Frank_Shostak
According to European Central Bank Governing Council member Ewald Nowotny, Federal Reserve Chairman Ben Bernanke sees no risk of inflation in the United States. According to Nowotny, Bernanke had given a “very optimistic” portrayal of the US outlook.
“They see absolutely no danger of an expansion in inflation,” Nowotny said. Bernanke had said US inflation should be 1.3 percent this year.
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Tuesday, May 14, 2013
Anti Economic Growth, De-growth, Re-growth / Economics / Economic Theory
By: Andrew_McKillop
DECRECIMIENTO POSTWACHSTUM
Anti-consumerism is steadily advancing and gaining political visibility in Europe, as a Lost Decade opens up for Europe's present 29 million unemployed persons. Europe's huge ranks of youth unemployed, sometimes over 50% of the 16-25 year age group in the worst affected countries, know they have No Future. In some countries like Greece, they have been simply and officially told by the government that their only chance is to get out of the country. In others like Spain, the depth of crisis has forced the state to seize some foreclosed properties, simply to prevent the country's ever growing number of homeless families becoming too socially explosive, but its youth has No Future.
Monday, May 13, 2013
Central Bank Asset Price Bubbles Inflating Faster Than GDP / Economics / Liquidity Bubble
By: Michael_Pento
Global central banks have clearly demonstrated the ability to re-inflate stock and real estate bubbles. Global stock markets are roaring ahead of their economies and real estate prices are quickly rebounding from their recent collapse. However, rock-bottom interest rates and massive money printing have yet to show an aptitude for creating sustainable GDP growth.
Monday, May 13, 2013
U.S. Jobs Crisis - Skills, Education, and Employment / Economics / Employment
By: John_Mauldin
"The large shortfall of employment relative to its maximum level has imposed huge burdens on all too many American households and represents a substantial social cost. In addition, prolonged economic weakness could harm the economy's productive potential for years to come. The long-term unemployed can see their skills erode, making these workers less attractive to employers. If these jobless workers were to become less employable, the natural rate of unemployment might rise or, to the extent that they leave the labor force, we could see a persistently lower rate of labor force participation." - Janet L. Yellen, Vice-Chair, US Federal Reserve, March 4, 2013
Monday, May 13, 2013
Europe's Fragile Competition Quest, From QE To Bangladeshi Pay / Economics / Euro-Zone
By: Andrew_McKillop
Any leading politician in Europe, today, has a "competitivity" speech ready at the touch of the Talk button. Europe's CNN-lookalike business TV channels have almost daily "great debates" on how to make Europe competitive. Against what and who? More than 65% of trade for most countries in Europe is with other European countries - the EU is a free trade area and customs union. Many observers say that is the only good thing European union ever brought about.
Saturday, May 11, 2013
Wage Inflation - A Bond Bull Turns Bearish / Economics / Inflation
By: John_Mauldin
"The large shortfall of employment relative to its maximum level has imposed huge burdens on all too many American households and represents a substantial social cost. In addition, prolonged economic weakness could harm the economy's productive potential for years to come. The long-term unemployed can see their skills erode, making these workers less attractive to employers. If these jobless workers were to become less employable, the natural rate of unemployment might rise or, to the extent that they leave the labor force, we could see a persistently lower rate of labor force participation." - Janet L. Yellen, Vice-Chair, US Federal Reserve, March 4, 2013
Friday, May 10, 2013
Symptoms Don't Lie, The Economic Patient is Getting Sicker / Economics / Inflation
By: Peter_Schiff
A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy. Although our government-supplied data suggests we are experiencing low inflation and modest economic growth, the economy shows symptoms of low growth, rising prices, and diminishing purchasing power.
Thursday, May 09, 2013
Is Abenomics Going to Put Japan Economy Back on the Growth Map? / Economics / Japan Economy
By: John_Mauldin
In a special Outside the Box today, Keith Fitz-Gerald, Chief Investment Strategist for Money Morning, dissects "Abenomics," the radical, not to say outlandish, fiscal moves that the newly installed government of Japan is making. And Keith has a ringside seat: he spends much of each year in Japan.
In an attempt to cut the Japanese a little slack, Keith comes up with four things that will have to happen for Abenomics to work – but when all is said and done, he says, Abenomics is a recipe for disaster. That does not mean, however, that there is not plenty of opportunity here for short-term profit, and Keith offers a play that is a potential money maker in this volatile Japanese environment.
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Wednesday, May 08, 2013
Is This the End of Cheap Chinese Labor? / Economics / China Economy
By: Money_Morning
Greg Madison writes: It's been the lament of everyone for years now: Cheap Chinese labor is killing the job market.
With lower wages and lax regulation, the giant sucking sound we heard was manufacturing jobs headed from Sheboygan to Shenzhen.
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Tuesday, May 07, 2013
What Chained CPI Inflation Really Means To You / Economics / Inflation
By: Money_Morning
Jason Jenkins writes: When U.S. President Obama released his 2014 budget proposal last month, many Americans who paid attention to the details needed a measurement he used - "chained CPI" - explained.
That's because President Obama used chained CPI (consumer price index) to help shave off more than $1 trillion from spending on government programs.
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Monday, May 06, 2013
The Case Against Economic Deflation / Economics / Deflation
By: Alasdair_Macleod
Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.
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Monday, May 06, 2013
April U.S. Jobs Report Begins to Show the Signs of the "Obamacare Effect" / Economics / Employment
By: Money_Morning
Diane Alter writes: Economists breathed a sigh of relief when the Labor Department reported a better than expected April employment report on Friday, but the details show cracks still remain.
Many of the job gains proved to be in lower paying fields and the average number of hours worked dipped.
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Monday, May 06, 2013
QE Has Been and Will Be a Complete and Utter Failure / Economics / Quantitative Easing
By: Graham_Summers
The Fed is now blaming Congress for the failures of its QE policies.
This is to be expected, given that no one in the power elite ever accepts responsibility for their own failures. Congressional members blames each other (depending on which party they’re in), the Fed blames Congress, the White House blames the GOP, and on and on.
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Monday, May 06, 2013
Keynes - Two Sides of the Same Debased Coin / Economics / Economic Theory
By: MISES
Hunter Lewis writes: In the beginning of The General Theory, John Maynard Keynes says that his ideas will no doubt be rejected because they are so novel and revolutionary. Toward the end of the same book, he seems to have forgotten this because now he says he is reviving the same centuries-old ideas that he had once dismissed as the most absurd fallacies. At least he acknowledges that he is changing his position, although he does not explain how his ideas can be new, revolutionary, and also centuries old.