Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, September 07, 2023
Why US Annual Budget Deficits Are Getting Worse / Economics / US Economy
By: Nadeem_Walayat
The pandemic a once in a 100 year event sparked rampant deficit spending to bailout the economy, that was 2020, whilst 2021 was nearly as bad! And 2022 did show an improvement by reverting back to pre-pandemic deficit era extremes. However the 2023 deficit is once more ramping up and running at twice the pre-pandemic extreme rate.
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Wednesday, September 06, 2023
US Presidential Election Cycle and Recessions / Economics / Recession 2023
By: Nadeem_Walayat
As my analysis of Jan 2023 pointed out (Stock Market Gasping to Reach 4000 Ahead of Earnings Season, Dow New All Time High 2023?)
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Monday, September 04, 2023
Yield Curve Inversion and Recessions / Economics / Recession 2023
By: Nadeem_Walayat
Apparently the yield curve inversion has a 100% hit rate, whenever a yield curve inverts it has always resulted in a recession.
Only problem is that it can take anywhere from 6 months to 3 years for the recession to materialise! Thus is another one of those nothing burgers that most analysts obsess over. For instance take the current inversion as of March 2022, those who swallowed the recession is coming mantra have been sat in money market accounts for the last 9 months whilst stocks such as META first doubled, then tripled and look set to quadruple, what kind of *****-A-Doodle-Doo indicator is the yield curve inversion? Which is why I don't tend to pay it much attention, given that it is pretty much useless in terms of investing.
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Saturday, September 02, 2023
CPI Smoke and Mirrors Hides Decade Long REAL Inflation PAIN! / Economics / Inflation
By: Nadeem_Walayat
INFLATION
Firstly understand that inflation is by DESIGN, the last thing your masters want is for the slaves to stop working so one of the primary mechanisms used to keep the slaves working is inflation because it destroys the purchasing power of earnings and savings so that most folks are kept running on the work hamster wheel into their graves where their lifetime of savings have been eroded away by INFLATION, or stolen by the banking crime syndicate, financial con men and through a myriad of modern day scam artists, run a mile from fund managers! They are all scam artists! If you think UK and US inflation is high take a look at the poor souls in Turkey (where I will soon be taking a trip, Istanbul), 58% inflation against which the depositors are thrown scraps of a 15% TAXED interest! Yes that's right, you get TAXED on the interest that FAILS to keep pace with inflation! Same in the UK, fake inflation of 7.2%, savings rates typically of 4.5% to 5.5% and the lemmings appear on broadcast news happy that they are in receipt of a sub inflation pittance, this after TEN YEARS of STEALTH theft of the purchasing power of their savings! At least the risky stock market gives ordinary folks a good chance to avoid the stealth theft, money in the bank is guaranteed to be systematically STOLEN! Yes we can play the fixed rate game which can temporarily work, but money in the bank in the UK over 10 years will lose between 1/5th and 1/3rd of it's value!
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Saturday, August 19, 2023
Talking Heads Predict No Recession While Shrinkflation Clips Consumers / Economics / Inflation
By: MoneyMetals
Precious metals markets are extending their losing streak as the U.S. dollar pushes higher. The Dollar Index rose for a fifth straight week through Thursday's close.Although the downward momentum in metals markets has been fairly steady for over a month, the total amount of price retracement has been modest. Volatility in gold and silver markets has actually been coming down.
When volatility gets compressed, that tends to precede a big move – often in the opposite direction of the prevailing trend, which has been down.
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Sunday, July 09, 2023
Uk Inflation in 2023: The Current Situation / Economics / Inflation
By: Umer_Mahmood
The April index falls less than expected to 8.7%. And the core figure has been at its best since 1992. After the IMF's good estimates on the economy, markets see a hawkish BoE
Difficult day for the stock markets of the Continent, which has been affected by a long series of bad news. Starting with the cold shower that came from British inflation, to which are added the fears of the failed agreement on the US debt ceiling and those about the damage that the Chinese economy could suffer from the new wave of Covid together with the ban on Micron chips. But, if on the impasse in Washington there is the belief that an agreement will arrive before 'date X', the race in prices in the United Kingdom gives us a glimpse of a dark future on the interest rate front.
Tuesday, June 20, 2023
How Germany's Economy is Turning Ugly / Economics / China Economy
By: EWI
This economic gauge "dipped back below zero in less than a year"
In November 2020, when fears were rampant over a second wave of the coronavirus pandemic, the president of the European Central Bank called for economic stimulus (Reuters):
Facing gloomy outlook, Lagarde calls for unlocking EU aid
In December of 2020, what is known as the Next Generation EU package became operational. This economic aid was massive, amounting to more than €2 trillion at current prices.
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Saturday, April 01, 2023
THE INFLATION MEGA-TREND / Economics / Inflation
By: Nadeem_Walayat
The primary driver for stock prices is Not Innovation, Disruption or even GDP growth (though it is part of the soup), No the Primary driver for stock prices is INFLATION! It's why Turkish stocks (before this weeks killer Quake) were racing ahead despite persistently high Turkish inflation rates of as much as 85% during 2022 as they experienced their own version of the Crack up BOOM!
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Friday, March 24, 2023
U.S. Money Supply Deflates 2% Annually (What That Means) / Economics / Deflation
By: EWI
The debt bomb implodes: Expect recession and deflation;
Many pundits have expressed worry about the ramifications of global debt -- and rightly so. As the Wall Street Journal noted toward the end of 2022:
The world has amassed $290 trillion of debt and it's getting more expensive to pay for it.
In the U.S. alone, the cost of servicing the national debt is expected to skyrocket over the next decade (Fox News, Feb. 27):
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Thursday, March 16, 2023
I Walked into the Mercedes Dealership… / Economics / Motoring
By: Submissions
By Chris Wood : I couldn’t believe what I saw at the Mercedes dealership… 5% is the magic number… The simplest way to profit from the EV boom…- I walked into a Mercedes shop in New Orleans the other day and was shocked…
All I saw were electric vehicles (EVs). Rows and rows of them.
I had to walk all the way to the back of the store to check out the “old school” gas-powered models.
Sunday, February 19, 2023
Get Ready for the GREAT DISINFLATION / DEFLATION CON of 2023 / Economics / Inflation
By: Nadeem_Walayat
US CPILIE smoke and mirrors inflation rate has peaked and will head sharply lower during 2023 that will sow the seeds for the next spike higher to 10% during 2025.
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Saturday, February 18, 2023
The Inflation Bonfire Continues but More States Are Fighting Back / Economics / Inflation
By: MoneyMetals
As investors digest the latest readings on inflation, employment, and consumer spending, precious metals markets are wavering on fears of further rate hikes.
Inflation continues to run well above the Federal Reserve’s 2% target.
On Tuesday, the Labor Department released the latest Consumer Price Index figures. The CPI rose a higher than expected 0.5% in January. That translates into an annual gain of 6.4%.
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Wednesday, January 25, 2023
STEALTH INFLATION / Economics / Inflation
By: Nadeem_Walayat
Gold and especially Silver are coming alive, the sleepers finally waking up to the INFLATION that they have been waiting for a decade to materialise. Where most are focused on the smoke and mirrors annual rate of CPLIE that the clueless mainstream media will latch onto to indicate that the Fed is winning and inflation is being defeated as the annual rate of CPI falls as the economy weakness..
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Sunday, January 08, 2023
Stagflation to Terrorize the US Economy in 2023 / Economics / Stagflation
By: MoneyMetals
Gold and silver markets got off to a strong start in the first couple days of trading this year before running into some selling pressure on Thursday – only to bounce back again on Friday morning.A superficially strong jobs report has raised expectations for further rate hikes by the Federal Reserve and boosted the U.S. dollar on foreign exchange markets. Metals futures traders reflexively responded by hitting the sell button yesterday only to turn around and buy today.
Investors often look at the first few trading days of a New Year for clues as to market trends that may develop for the rest of the year.
Financial News Report: U.S. stocks fell sharply on Thursday as fresh evidence of a tight labor market deepened fears the Federal Reserve will keep interest rates elevated for longer than expected.
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Wednesday, January 04, 2023
Monetary Lags and the Acute Recession of 2023 / Economics / Recession 2023
By: Michael_Pento
Fed Chair Jerome Powell remains unimpressed with the reduction of the rate of inflation; down to 7.1% in November, from 9.1% June. The Summary of Economic Projections shows a desire of the Fed to increase their forecast for the Fed Funds Rate to 5% in 2023, up from the 4.6% projection made in the last SEP that was released in September.
And yet, the Deep State of Wall Street is busy telling investors that the Fed is almost done raising rates, hence, and a new bull market is right around the corner. But history proves this premise to be false. For example, during the preamble to the Great Recession, the Fed Funds Rate reached its apex in June of 2006 at 5.25%. It took 3 years for it to ascend to that level, up from the 1% starting level back in June of 2003. Ben Bernanke then began to cut rates in September of 2007; but the Great Recession began anyway in December of that same year. And, exactly one year from that first rate cut, the stock market went into freefall. This is another clear example of many throughout history that shows rate hikes work with a long lag.
Sunday, December 18, 2022
2023: Preparing for tectonic shifts in the world economy / Economics / Global Economy
By: Dan_Steinbock
Colossal structural shifts are taking place in the global economy, as evidenced by the huge challenges during the ongoing year. In 2023, China seeks recovery, but the West – the US, the Eurozone and the UK, and Japan - will cope with recession and the specter of a debt crisis.
In a recent Foreign Affairs commentary, Mohamed A. El-Erian warned that we are not facing just extraordinarily challenging business-cycle fluctuations, but structural and secular long-term pressures. As a result, “the global economy may never be the same.”
In reality, the “old normal” has been history since 2008 and the consequent debt crises. During the past decade, world economy has been driven by geopolitical agendas, not by economic priorities. And the results have been predictable: catastrophic.
Friday, December 02, 2022
Why the Fed is Wrong about Inflation Coming Down / Economics / Inflation
By: Richard_Mills
The US Federal Reserve continues to grapple with inflation, which at 7.7% (October CPI) is more than triple the Fed’s 2% target, without causing a recession by lifting interest rates too high.
The Fed has two options when it comes to interest rate increases designed to tackle the highest US inflation since the early 1980s. The first is it continues to hike rates, beyond what the economy can handle, causing a recession, usually defined as two consecutive quarters of negative economic growth. This is the “Volcker Fed” playbook.
In 1979, then US Federal Reserve Chair Paul Volcker faced a serious challenge: how to quell inflation which had been wracking the economy for most of the decade. The prices of goods and services had averaged 3.2% annually since World War II, but after the 1973 oil shock, they more than doubled, to an annual 7.7%. Inflation reached 9.1% in 1975, the highest since 1947. Although prices declined the following year, by 1979 inflation had reached a startling 11.3% (led by the 1979 energy crisis) and in 1980 it soared to 13.5%.
Not only was inflation going through the roof, but economic growth had stalled and unemployment was high, rising from 5.1% in January 1974 to 9% in May 1975. In this low-growth, hyperinflationary environment we had “stagflation”.
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Sunday, November 27, 2022
US Recession 2023 Already Happened in 2022! / Economics / Recession 2023
By: Nadeem_Walayat
Yes it is a a big fat con because the US has already posted 2 quarters of negative GDP, what can you do? This is the world we inhabit of fake economic data, the Fed does not like CPI, lets run with the much lower PCE, 5% instead of 8% inflation! What a con!
The facts are the US had a recession in 2022 that everyone is ignoring!
The US posted it's 2nd negative GDP of -0.6%, that's -2.4% year to date, what does that mean for stocks? Corporate profits Dividend by GDP graph clearly shows that we are still near the cycle peak, i.e .unlike Q4 2019 BEFORE the pandemic crash, earnings have not contracted anywhere near to signal an earnings bottom. So this metric suggests new highs in the indices are NOT likely anytime soon, especially given that GDP is FALLING. However against this we have the MAGIC of INFLATION that should support nominal stock prices as Inflation INFLATES GDP and corporate profits, case in point being the 1970's where corporate profits ROSE albeit form a 1970 trough, but the indices ended the decade little changed.
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Monday, November 21, 2022
CPLIE - The Exponential Inflation Mega-trend / Economics / Inflation
By: Nadeem_Walayat
People need to learn to forget about graphs such as this (Annual percentage change in CPLIE) -
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Friday, November 18, 2022
WHY PEAK INFLATION IS a RED HERRING / Economics / Inflation
By: Nadeem_Walayat
Dear Reader
The Inflation Mega-trend
REAL INFLATON and not the BS statistics that the likes of the Fed and Bank of England vomit every month, fake inflation statistics watered down over decades to hide the stealth theft of wealth and purchasing power of wages and savings..
I have been calculating my my own inflation measure for the UK for a couple of decades now which computes to the UK inflation rate currently being at about 20% per annum! In fact it has been in a range of 15% to 20% for over a year!
As for the United States, shadow stats does a good job of calculating the real rate of inflation which ia based on the US governments own 1980 formulae that resolves to 13.5% vs 8.2%.
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