Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Wednesday, April 27, 2011
Can We Give The Hyperinflation Thing a Rest? / Economics / HyperInflation
By: Mike_Whitney
The Federal Reserve is not going to push the economy into Zimbabwean hyperinflation. That's pure bunkum. The Fed's plan is to weaken the dollar to boost exports and to force China to let its currency appreciate to its fair-market value. The policy should help to lower the US's bulging current account deficit. By purchasing $600 billion in US Treasuries (QE2), the Fed effectively reduces the supply of risk-free assets, which sends investors into riskier assets like stocks and commodities. Is there an element of class warfare in the policy?
Tuesday, April 26, 2011
QE2 and the Fate of the U.S. Economy / Economics / Quantitative Easing
By: David_Galland
By David Galland, Casey Research : In the last few weeks, I’ve become particularly “attentive” to the intentions of Fed policy makers following the scheduled June end date for QE2.
This is no small matter; an actual shift in Fed policy – as opposed to the smoke and mirrors sort – could temporarily play havoc on equities and commodities markets alike. How could it be otherwise, when under QE2 the Fed has been writing checks to the Treasury in amounts of upwards of $100 billion a month since last November?
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Tuesday, April 26, 2011
QE2 is Damaging the U.S. Economy and Reducing GDP Growth / Economics / Quantitative Easing
By: Dian_L_Chu
QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction.
Monday, April 25, 2011
Inflation is No Miracle Cure, Impossible to Inflation Out of this Mess / Economics / Inflation
By: Mike_Shedlock
Inquiring minds are reading The "Miracle" of Compound Inflation by John Mauldin. Here are a few paragraphs worthy of a closer look.
Read full article... Read full article...Albert Einstein is famously quoted as saying, "Compound interest is the eighth wonder of the world." And compounding is indeed the topic of this week's shorter than usual letter, but compounding not of interest but of inflation.
Sunday, April 24, 2011
Deepening Economic Crisis: Inflation, Rising Interest Rates, Surge in the Price of Gold and Silver / Economics / Inflation
By: Bob_Chapman
Economic recovery does not seem to be taking effect in spite of more massive expenditures by Congress and the Fed. The IMF says financial stability has improved, but then again their vision is almost always clouded. US tax revenues are not increasing in a meaningful way, manufacturing struggles to expand and Wall Street flourishes in a cascade of mega salaries and bonuses. In another six months the US will be three years what the government, the media and Wall Street call a deep recession. We call it an inflationary depression, which has existed for 26 months. After eight years of increasing money and credit, and the creation of a real estate bubble, the Fed has been fighting off asset destruction with ever more money and credit accompanied by debt deflation. Part of the Fed’s policy has been zero interest rates, which has helped Wall Street and banking and to a limited extent real estate, but has destroyed the purchasing power of retirees and has driven funds into speculation, which in many cases has ended in ever more losses and less buying power.
Sunday, April 24, 2011
The 'Miracle' of Compound Inflation / Economics / Inflation
By: John_Mauldin
Albert Einstein is famously quoted as saying, "Compound interest is the eighth wonder of the world." And compounding is indeed the topic of this week's shorter than usual letter, but compounding not of interest but of inflation. As you might expect, I am giving a great deal of thought as to how we get out of our current financial dilemma of too much debt and deficits that are far too high. While I will use US data for our illustration, the principles are the same for any country.
Sunday, April 24, 2011
BRIC Inflation, GDP, Stock Indexes, Monetary Policy Economic Analysis / Economics / Emerging Markets
By: EconGrapher
This week the focus goes to the giants of the emerging markets, the "BRIC" economies (the economic/investment one, not the political club). In this edition we review inflation, GDP, monetary policy and the stock markets of Brazil, Russia, India, and China. Also thrown in is a quick review of the monetary policy decisions over the past week.
Saturday, April 23, 2011
The Deflation Threat is Still Alive, Here's Why / Economics / Deflation
By: EWI
"Every excess causes a defect; every defect an excess. Every sweet hath its sour...The waves of the sea do not more speedily seek a level from their loftiest tossing, than the varieties of condition tend to equalize themselves."
This quote comes from Ralph Waldo Emerson's essay, "Compensation." He opens the essay with a poem which includes these two lines:
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Friday, April 22, 2011
Whiff of Decelerating Trend in Second Tier U.S. Economic Reports / Economics / US Economy
By: Asha_Bangalore
The March employment report, including a 8.8% unemployment rate and a gain of 230,000 private sector jobs, set a bullish tone early in the month, but today's reports are sending a different message. Initial jobless claims fell 13,000 to 403,000 during the week ended April 16. The four-week moving average at 399,000 has moved up 391,000 posted four weeks ago.
Thursday, April 21, 2011
Fear the Economic Boom, Not the Bust / Economics / Economic Theory
By: MISES
Patrick Barron writes: All of the industrial world's central banks and public treasuries currently are engaged in an impossible exercise — trying to reinflate an artificially created boom through zero interest rates and deficit spending. The reality is that the current financial crisis was caused by central-bank money expansion, so it cannot be cured by further money expansion. It is as if a doctor is continuing to bleed a patient who is already bleeding to death.
Thursday, April 21, 2011
Slowing U.S. Economic Recovery Faces Strong Headwinds in 2011 / Economics / Economic Recovery
By: Money_Morning
Kerri Shannon writes:
The U.S. economic recovery has been heading upward, but high unemployment and rising energy prices will weigh heavily on consumers and slow U.S. growth.
Many economists don't think the U.S. economy will maintain the 3.1% growth rate it established in 2010's fourth quarter. The International Monetary Fund (IMF) says that while global growth this year will continue at a rate of 4.8%, advanced regions like the United States will grow at a slower rate than emerging economies.
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Tuesday, April 19, 2011
Is Deflation Still a Threat, the Deflation Survival Guide" Gives the Answer / Economics / Deflation
By: EWI
"Every excess causes a defect; every defect an excess. Every sweet hath its sour...The waves of the sea do not more speedily seek a level from their loftiest tossing, than the varieties of condition tend to equalize themselves."
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Tuesday, April 19, 2011
Will China’s Economy Overheat? / Economics / China Economy
By: Frank_Holmes
China’s GDP growth continued at a blistering pace during the first quarter of 2011, rising 9.7 percent from the previous year, according to economic data released today from the People’s Bank of China. Once again this outpaced many forecasts—even that of the Chinese government—and reignited the discussion of China’s overheating economy. While its robust growth may raise a few eyebrows, the economy isn’t in danger of “red-lining.”
Monday, April 18, 2011
Inflation Destroys Real Wages / Economics / Inflation
By: Michael_Pento
In the same vein as medieval physicians believed bloodletting would cure illness, modern snake-oil economists still perilously cling to their claim that rising wages and salaries are the cause of inflation. With my recent debates with these mainstream economists, I've heard the following: "without rising wages, where does the money come from to push prices higher?" I was tempted to respond, "where do the employers get the money to pay those higher wages?" But economists tend to get a little nasty when you make them feel stupid.
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Monday, April 18, 2011
Japan, the Forgotten Protectionist Threat / Economics / Protectionism
By: Ian_Fletcher
Everyone's worried about China today on the trade front. And they should be.
But let's not forget that China is only the most brazen player of one-way free trade out there. We ran a $273 billion deficit with China in 2010, but we also ran an $80 billion deficit with the European Union and a $60 billion deficit with Japan.
Sunday, April 17, 2011
Inflation Versus Hyperinflation, The Crucial Difference / Economics / Inflation
By: Justice_Litle
Is it possible we will see hyperinflation in the United States? Yes, but not by the route you might think...
"Hyperinflation." You've heard the word. You may have talked about it on the golf course or at the dinner table. (Or even in the grocery store.)
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Sunday, April 17, 2011
Spiralling Public Debt and Economic Stagnation in the European Union / Economics / Euro-Zone
By: Bob_Chapman
Europe continues to struggle from one problem to another. The euro has been strong only because the dollar has been weak. The governments of Greece, Ireland, Portugal and Spain continue their balancing acts on the edge of a financial precipice. All have Socialist governments, which have done terrible jobs, but the opposition is not much better. Each economy is in serious trouble and if Italy and Belgium follow it will take $4 trillion to bail them out. If the solvent EU members bail them out they’ll fail as well. Americans and Brits can look down their noses, but their problems are just as bad if not worse. They all have practiced different versions of Keynesian economics that has been disastrous. Their fiscal and monetary policies have been and continue to be out of control, as corruption abounds. The solutions are unpalatable, especially for politicians, because they all spell austerity. We have just seen the European Central Bank raise interest rates as euro zone economies slow, as they hope to arrest 2.8% official inflation. Real inflation is double that number.
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Saturday, April 16, 2011
Deflation, Hyperinflation and Stagflation, Where Do We Stand? / Economics / Fiat Currency
By: Jesse
Well, the good news for everyone is that nothing seems inevitable here, that there is almost always a choice, but it is often wrapped up in a nice looking rationale, with all the compulsion of a necessity, for the good of the people. Us versus them in a battle for survival and all that. And clever leaders on the extremes provide the 'them' to be dehumanized and objectified. The leftist wishes to murder the bankers, and the fascist the lower classes and outsiders. The extremes of both end up making life miserable for almost everybody except for a privileged few.
Saturday, April 16, 2011
U.S. Accelerating Inflation Mega-Trend Whilst Deflationists Continue to Reinvent a History of Worthless Deflation Forecasts / Economics / Inflation
By: Nadeem_Walayat
U.S. CPI Inflation surged higher during March by rising to 2.7% from 2.1% the month before, completely catching the mainstream financial press off guard that continues to take its cues from the Fed central bank deflation propaganda as part of its strategy for massaging the general populations inflation expectations and enabling it to print money aka Quantitative Easing, aided by academics who are paid to follow a school of thought rather than think independently and without any monetary consequences of being wrong which is then further regurgitated at length by salesmen and the BlogosFear.
Saturday, April 16, 2011
U.S. Slip-sliding into Recession / Economics / Double Dip Recession
By: Mike_Whitney
In June, the Fed's bond buying binge (QE2) will end and the economy will have to muddle through on its own. And, that's going to be tough-sledding, because QE2 provided a $600 billion drip-feed to ailing markets which helped to lift the S&P 500 12% from the time the program kicked off in November 2010. Absent the additional monetary easing, the big banks and brokerages will have to rely on low interest rates alone while facing a chilly investment climate where belt-tightening and hairshirts are all-the-rage and where consumers are still licking their wounds from the Great Recession. None of this bodes well for the markets or for the millions of jobless workers who continue to fall off the unemployment rolls only to find that the social safety net has been sold to pay off the mushrooming budget deficits.