Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, August 23, 2011
The Great Recession and Dynamic Economic Decision Making / Economics / Economic Theory
By: John_Mauldin
This week’s Outside the Box is from my good friend John Silvia, the Chief Economist at Wells Fargo and fishing buddy in Maine. He has written a powerhouse book called Dynamic Economic Decision Making: Strategies for Financial Risk, Capital Markets, and Monetary Policy.
Tuesday, August 23, 2011
The "Great Depression" and the "Great Recession" FAQ / Economics / Economic Depression
By: Asha_Bangalore
There have been frequent questions from clients and partners about the “Great Depression” and the recent recession, which is often called the “Great Recession.” Here are five important aspects that should help to put the two periods in historical perspective.
Monday, August 22, 2011
Do The Maths, Worlds Developed Nations are Insolvent / Economics / Global Debt Crisis
By: Puru_Saxena
BIG PICTURE – Let’s face it; many of the world’s ‘developed’ nations are insolvent and the writing is on the wall. Either these indebted states will default or they will try and inflate their currencies into oblivion.
As far as the US is concerned, it still has the privilege of owning the world’s reserve currency and its central bank can always create more dollar bills out of thin air. Thus, it is unlikely that the US will ever default on its debt obligations.
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Sunday, August 21, 2011
The “Treasonous” Fed, Recession of 2011? / Economics / Double Dip Recession
By: John_Mauldin
The data this week was just ugly. Even the uptick in the leading economic indicators, seized upon by so many talking heads, must have a large asterisk beside it. This week we look at the increasing probability that we are headed for recession, and the follow-on implications. Then I take a perilous and speculative journey into the realm of the political, commenting on Texas (and my) Governor Rick Perry's rather interesting comments about the Fed and Ben Bernanke. There is a lot to cover, and lots of charts, so we will jump right in. But please read at the end about two events coming up in the next few months that you might be very interested in attending.
Saturday, August 20, 2011
Localize Our Economy / Economics / Economic Theory
By: Barry_Elias
Two centuries and a decade ago (in 1802), the third president of the United States, Thomas Jefferson, stated:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property — until their children wake-up.”
Friday, August 19, 2011
Threat of Economic Stagflation Looms as Prices Rise Despite Bad Economy / Economics / Stagflation
By: Money_Morning
David Zeiler writes:
Few are willing to acknowledge the threat of stagflation, but reports showing inflation rising more quickly than expected - even as growth is slowing - indicate that this scourge of the 1970s may be stalking the U.S. economy.
Every economic report nudges the United States closer to the definition of stagflation - a condition marked by slow economic growth, high unemployment, and soaring prices.
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Friday, August 19, 2011
Could This Be the Beginning of a Recession / Economics / Double Dip Recession
By: George_Maniere
I can’t remember how many times I have written that the U.S. is the largest debtor nation in the history of the world. Well yesterday I was reading a post from a reader who is an economics professor and he told me that I was correct. We are the largest debtor nation in the history of the world but what I was leaving out of that sentence was that we are the largest economy in the world. He told me that the true test is not how large our debt is, the true test is what is our nation’s debt is in relation to our Gross Domestic Product. He further wrote, citing the “CIA World Factbook” that the ratio of our debt to GDP is 53.9% and that figure puts us in 38th place in the ranking of countries in the world. He offered several examples. The dubious distinction of first place belongs to Japan whose debt to GDP is a staggering 225.8% and most surprising to me in 20th place was Germany whose debt to GDP was 78.8%.
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Friday, August 19, 2011
Record Bond Market, Debt Deleveraging Deflation / Economics / Deflation
By: DK_Matai
Deflation is probably the last thing on anyone's mind. As a result of the latest financial markets plunge, gold has surpassed a new record of $1,820 per troy ounce. We all recognise gold as a hedge against inflation. In parallel, the government bond yields of a number of major countries including the US, UK, Germany, Sweden and Switzerland are at or near record lows since the Second World War, which means that their prices are at an all time high. For example, the bond yield on 10-year US treasuries fell to a record low below 2% today during intra-day trading. What is the significance of this record bond market?
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Friday, August 19, 2011
Could This Be the Beginning of a Recession? / Economics / Double Dip Recession
By: George_Maniere
I can’t remember how many times I have written that the U.S. is the largest debtor nation in the history of the world. Well yesterday I was reading a post from a reader who is an economics professor and he told me that I was correct. We are the largest debtor nation in the history of the world but what I was leaving out of that sentence was that we are the largest economy in the world. He told me that the true test is not how large our debt is, the true test is what is our nation’s debt is in relation to our Gross Domestic Product. He further wrote, citing the “CIA World Factbook” that the ratio of our debt to GDP is 53.9% and that figure puts us in 38th place in the ranking of countries in the world. He offered several examples. The dubious distinction of first place belongs to Japan whose debt to GDP is a staggering 225.8% and most surprising to me in 20th place was Germany whose debt to GDP was 78.8%.Read full article... Read full article...
Friday, August 19, 2011
The Fed’s Focus is on Economic Growth Not Inflation / Economics / Inflation
By: Asha_Bangalore
Of the several economic reports published this morning, existing home sales data of July and the August factory activity report of the Philadelphia Fed take precedence over the July Consumer Price Index because inflation is likely to moderate if weak economic conditions persist in the near term.
Thursday, August 18, 2011
U.S. Sleep Walking Into Another Recession / Economics / Double Dip Recession
By: Terry_Coxon
The rebound from the recent recession is the slowest economic comeback in living memory – so slow that some doubt whether it is happening at all. The recession bottomed (the economy stopped shrinking) in June 2009, so the recovery is now two years old. Here’s how things looked 24 months into recovery from the last four recessions.
Thursday, August 18, 2011
Simple Device that has Spontaneously Revolutionized Life the World Over / Economics / Economic Theory
By: MISES
Devin Leary-Hanebrink writes: A few days ago I was sitting in the break room at work enjoying my lunch when I realized just how incredible the simple, everyday, run-of-the-mill vending machine truly is. For days I have watched people pour money into these simple machines without ever really paying much attention. Heck, I have used these things for the majority of my life and never even given them a second thought. What is truly impressive — no, utterly astonishing — is how such a simple device has spontaneously revolutionized life the world over without the direction of a single bureaucrat, academic, statute, or judicial opinion.
Thursday, August 18, 2011
U.S. Whole Sale Prices Inflation Lifted by Food and Tobacco / Economics / Inflation
By: Paul_L_Kasriel
The Producer Price Index (PPI) of Finished Goods rose 0.2% in July after a 0.4% drop in the prior month. The 0.6% decline in energy prices provided a partial offset to higher prices of other items. Lower prices for gasoline led to the drop in the finished energy price index. An increase in prices of beef, veal, and fresh fruits led to the 0.6% jump in food prices during July, following a similar increase in the previous month. On a year-to-year basis, the finished goods price index has risen 7.2%.
Wednesday, August 17, 2011
Is The U.S. Price Index Inflating Real GDP? / Economics / US Economy
By: Tony_Pallotta
There is no shortage of correlations such as the one shown below (PPI VS real GDP) that brings into question the real GDP reported over the past two years. In other words real GDP appears somewhat inflated since Q3 2009. You can substitute PPI in the chart below and find many similar relationships or should I say "divergences from reality."
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Tuesday, August 16, 2011
Krugman's War Cry Won't Avert Economic Depression / Economics / Great Depression II
By: Michael_Pento
Paul Krugman sounded the war cry this Sunday on Fareed Zakaria's program Global Public Square. After all, he asserted, only spending equivalent to another World War could lead us back to prosperity. That, and a healthy dose of inflation.Read full article... Read full article...
Tuesday, August 16, 2011
Widening U.S. Trade Deficit Adds to Fears of Global Economic Slowdown / Economics / US Economy
By: Money_Morning
David Zeiler writes: The widening U.S. trade deficit surprised analysts last week by reaching a level not seen since October 2008, while the decline in exports added to growing evidence of a global economic slowdown.
The U.S. Commerce Department announced last Thursday that the trade gap grew 4.4%, to $53.1 billion from $50.8 billion in May. Economists had expected it to shrink to $48 billion.
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Monday, August 15, 2011
It is not Enough to Tell the Fed to Target Nominal GDP - You Have to Tell it How / Economics / Central Banks
By: Paul_L_Kasriel
In the August 15 edition of the Financial Times, Clive Crook wrote an op-ed piece urging the Fed to target nominal GDP growth. This is not the worst Fed "mandate" that has been recommended. But it is not enough to recommend a mandate or a target to this Fed. You also have to explain to it how to maximize the probability of actually achieving its mandate. Targeting a fed funds rate won't do the trick, especially under current circumstances.
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Monday, August 15, 2011
Is Debt Deleveraging Bad for the Economy? / Economics / Economic Theory
By: Robert_Murphy
The economic pundits have stressed more and more that this crisis is special because it involves "deleveraging," and for that reason isn't a run-of-the-mill recession. Because households and corporations are collectively trying to reduce their net indebtedness, it is allegedly up to the government to run massive budget deficits in order to prop up aggregate spending.
Sunday, August 14, 2011
U.S. Long Winding Road to Debt Crisis Ends With a Bang / Economics / Global Debt Crisis
By: John_Mauldin
I came away from Maine, and meeting with some of the most astute economists in the world, with a series of impressions that will be the core of this week's letter. On Friday night, S&P downgraded US debt, and of course I need to comment on that. But as we talked the next two days and into the nights, I came increasingly to the opinion that this is indeed the Beginning of the Endgame. I must admit it has come about faster than I thought. But that is the nature of these things. And so, with no "but first," let's jump right in.
Saturday, August 13, 2011
Rethinking Depression Economics / Economics / Economic Theory
By: J_M_Finegold_Catalan
One criticism of Austrian business-cycle theory is that it gives little insight as to what should be done to push an economy out of recession. Even accepting the premise that monetary overexpansion leads to a misallocation of capital goods, detractors claim that this says little in regards to the nature of the depression period. Leland Yeager, for example, argues that "Austrian economists can explain the continuing depression only lamely."[1] Lord Robert Skidelsky once made a similar comment in a live debate with George Selgin and Jamie Whyte.