Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, August 08, 2017
Is Inflation an issue or did the Fed Mess Up? / Economics / Inflation
By: Sol_Palha
Bankers know that history is inflationary and that money is the last thing a wise man will hoard.
William J. Durant
The Fed has been trying to create the illusion that inflation is an issue. The guys from the hard money camp also maintain that inflation is an issue and to a point they are right. Their definition of inflation is an increase in the money supply. The Fed, on the other hand, defines inflation as an increase in prices. The real definition of inflation is an increase in the money supply; rising prices are just the symptom of the disease. This article from mises.org summarises this concept quite succulently
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Saturday, August 05, 2017
China’s Growth Driven By Shadow Banking Is Potential Trigger For Next Global Recession / Economics / China
By: John_Mauldin
China is unstoppable.
GDP growth has slowed down to 6.9%, according to official numbers. The numbers are likely inflated, but the boom is still underway.
Reasonable estimates from knowledgeable observers still have China growing at 4–5%, which is rather remarkable given China’s size.
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Wednesday, August 02, 2017
Greenspan Warns Moving Into “Stagflation Not Seen Since the 1970s” / Economics / Inflation
By: GoldCore
– Former Fed Chairman warns of bond bubble, stagflation
– “Moving into a … stagflation not seen since the 1970s”
– This will not be “good for asset prices”
– 10 Yr Gov bond yields fell from 15.8% in 1981 to 2.3%
– Interest rates will not stay low, will rise ‘reasonably fast’
– “Normal” interest rates in 4%-5% range
– Inflation will not stay at historically low levels
– Gold “protects savings” and is “store of value”
– Gold is the “ultimate insurance policy” says Greenspan
Friday, July 28, 2017
BEA US Economy Q2 2017 Estimates GDP Growth At 2.56% / Economics / US Economy
By: CMI
In their first (preliminary) estimate of the US GDP for the second quarter of 2017, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.56% annual rate, up +1.14% from a downward revised first quarter.
Consumer spending rebounded, growing at a +1.93% annualized rate during the quarter, up +1.18% from the prior quarter and very similar to the fourth quarter of 2016. The inventory contraction of the prior quarter essentially disappeared (-0.02%), as did the previous robust growth in commercial fixed investment (at only +0.36%). Governmental spending rose slightly (+0.12%), reversing the prior quarter's contraction, and the growth rates for both exports (+0.48%) and imports (-0.31%) moderated.
Friday, July 28, 2017
One Of These 3 Black Swans Will Likely Trigger A Global Recession By End Of 2018 / Economics / Recession 2018
By: John_Mauldin
Exactly 10 years ago, we were months way from a world-shaking financial crisis.
By late 2006, we had an inverted yield curve steep to be a high-probability indicator of recession. I estimated at that time that the losses would be $400 billion at a minimum. Yet, most of my readers and fellow analysts told me I was way too bearish.
Turned out the losses topped well over $2 trillion and triggered the financial crisis and Great Recession.
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Wednesday, July 26, 2017
Trump Fails To Understand One Critical Thing—Our Trade Partners Have Options, Too / Economics / Protectionism
By: John_Mauldin
Despite heavy opposition, Trump is more insistent than ever on imposing quotas or tariffs on steel imports.
However, it makes a big difference whether the administration decides to go with quotas on current steel imports or initiate a tariff. Quotas would be harmful, but a tariff would be far worse.
Let’s look at the numbers to see who exactly would actually be damaged.
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Tuesday, July 18, 2017
Here’s Why China’s One Belt, One Road Is Doomed To Failure / Economics / China Economy
By: John_Mauldin
One Belt, One Road (OBOR) is China’s ambitious initiative unveiled in 2013. In fact, it’s two plans combined to form a larger framework of new trade routes.
The first of these is One Belt (the orange line in the above map). It refers to the development of new infrastructure—particularly railroads and highways—to connect China’s interior provinces with Europe by way of Russia, Central Asia, and the Middle East. It’s a tall order, and expectations are low that China would be able to build them.
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Monday, July 17, 2017
The Fed's Inflation Nightmare Scenario / Economics / Inflation
By: The_Gold_Report
Lior Gantz, founder of Wealth Research Group, analyzes how inflation will likely take off in the U.S., and why all of the condensed energy dammed up by the QE programs and the Fed asset purchases will explode all at once.
Wealth Research Group published an important update on the precious metals sector, which is trading in an unusual pattern, and how the bottom for junior mining shares is likely to play itself out in six to eight months.
For over nine years, central banks have been the front and center of the financial universe.
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Monday, July 17, 2017
Why Jobs Growth No Longer Induces Wage Growth in America / Economics / Economic Theory
By: Dan_Steinbock
Or The Eclipse of the Phillips Curve in AmericaWhile the Fed’s continued tightening may suppress growth in emerging economies, US labor market may not be as strong as recent reports suggest.
US experienced strong job growth in June, when the economy created 222,000 net new jobs, which exceeded analyst expectations. At the Federal Reserve, the jobs report boosted confidence US economy is on the track for new rate hikes in the fall.
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Thursday, July 06, 2017
London Workers Real Earnings Still below 2007 in 27 Boroughs / Economics / Wages
By: Submissions
EARNINGS IN 27 LONDON BOROUGHS STILL BELOW 2007 LEVEL ONCE INFLATION HAS BEEN TAKEN INTO ACCOUNT NEW GMB STUDY SHOWS
Impunity for employers hostility towards workers rights is maybe more important than the pay cap in the public sector in holding down pay in the private sector says GMB London region
The real value of earnings for all full-time employees resident in London has dropped by 17.9% between April 2007 and April 2016 a new GMB London Region analysis of the Annual Survey of Hours and Earnings shows.
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Monday, July 03, 2017
This Chart Explains Why Germany’s Economic Stability Depends On The US / Economics / Germany
By: John_Mauldin
In our 2017 forecast, we predicted that German exports will fall in 2017, which will weaken Berlin's trade position and slow down economic growth.
However, the latest reports from the German central bank and two other influential institutions have challenged our forecast on two fronts.
First, the German reports say that exports will continue to rise. Second, the German reports insisted that it is the domestic drivers that have made German growth stable.
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Monday, July 03, 2017
4 Obvious Signs the US Economy Is Stalling—Here’s What to Do / Economics / US Economy
By: John_Mauldin
BY STEPHEN MCBRIDE : Despite a surge in optimism after the election, nominal GDP growth in 2016 was just 2.95%. This makes 2016 the second-worst year on record since 1959.
And with key economic indicators flashing warnings signs, it looks like the US economy is heading toward big trouble rather than revival.
Here are four signs that paint the picture best.
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Monday, July 03, 2017
Are Advanced Economies Ready for Recovery, Really? / Economics / Global Economy
By: Dan_Steinbock
Or Global Reflation As China Begins Tightening
Until recently, the conventional wisdom was that China’s contribution to global reflation would be increasingly accompanied by those of the US and Europe. Yet, the realities may look grimmer than anticipated.
Usually, the term ‘reflation’ is used to describe the first phase of economic recovery after a period of contraction. More recently, ‘global reflation’ has been deployed to refer to the post-crisis past decade, which has been characterized by lingering recovery from the global crisis, despite ultra-low rates and quantitative easing.
Sunday, July 02, 2017
The China-EU-US-Triangle Déjà Vu / Economics / Global Economy
By: Dan_Steinbock
The new rapprochement between Brussels and Beijing involves converging economic interests between Europe and China – and diverging strategic interests between Europe and America.A day after the terror attacks of September 11, 2001, Le Monde declared that “we are all Americans.” But the honeymoon of shared suffering ended quickly when US military revenge raged across Afghanistan, Iraq, and elsewhere. Instead, a deep and broad transatlantic rift emerged, thanks to bitter disagreements about President Bush’s foreign policy revolution.
Today, many feel an odd sense of déjà vu.
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Friday, June 30, 2017
The Fed Has No Control Over Inflation / Economics / Inflation
By: John_Mauldin
Ben Bernanke uttered the word taper in 2013, signaling that quantitative easing’s days were numbered. No one knew how the Fed would escape from years of QE and near-zero rates. But to her credit, Yellen accepted the challenge in late 2013.
She tapered the Fed’s bond buying down to zero (except for reinvestment of dividends and maturity rollovers) and began the rate-hike cycle. But that hasn’t normalized interest rates.
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Thursday, June 29, 2017
US Minimum Wage / Economics / Wages
By: Submissions
John Dunham writes: What a difference a day makes. Just this month, a group of researchers at the University of Washington (UW) released a working paper outlining how a $13 per hour minimum wage for restaurant workers in Seattle has led to exactly the opposite effects that proponents predicted.
According to the team at UW, which was funded by the City of Seattle, a 37 percent increase in Seattle’s mandatory minimum wage for restaurant employees resulted in a decrease of working hours for these employees of about 9 percent, and an overall loss in income of $125 per month. This is significant because the minimum wage increase, which was promoted as a way to help lower-wage workers, actually cost those same workers about $1,500 per year on average.
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Wednesday, June 28, 2017
The Fed Has Undermined the US Economy’s Ability to Grow / Economics / US Economy
By: John_Mauldin
BY STEPHEN MCBRIDE : The Fed’s hope was that quantitative easing would stimulate economic growth. But a former senior economist for the Fed believes it has done the exact opposite.
Speaking at the Mauldin Economics Strategic Investment Conference, Dr. Lacy Hunt, the executive vice president of Hosington Investment Management and former senior economist for the Dallas Fed, said that quantitative easing has created “significant unintended consequences.”
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Wednesday, June 28, 2017
“Secular Stagnation” Is Nonsense… Here’s the Real Reason Behind the US Downturn / Economics / Stagflation
By: John_Mauldin
My good friend Charles Gave recently wrote an instructive article titled “Tale of Two Countries.”
In the UK and France, structural growth rates have diverged since 1981. The rate has fallen by two-thirds in France, while in the UK it has risen.
Why?
Well, to begin with, in the UK, Margaret Thatcher was elected prime minister in 1979. She reduced the role of the bureaucracy in managing economic activity and dialed back government spending as a percentage of GDP.
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Wednesday, June 28, 2017
Shrinkflation In UK – Real Inflation Much Higher Than Reported / Economics / Inflation
By: GoldCore
- Shrinkflation – Real inflation much higher than reported and realised
- Shrinkflation is taking hold in consumer sector
- Important consumer, financial, monetary and economic issue being largely ignored by financial analysts, financial advisers, economists, central banks and the media.
- Food becoming more expensive as consumers get less for price paid
- A form of stealth inflation, few can avoid it
- Brexit is the scapegoat for shrinkflation by the media and companies
- Consumers blame retailers rather than central banks
- Gold hedge has doubled in value since 2007
Wednesday, June 28, 2017
China’s First Half of 2017: Growth amid Deleveraging / Economics / China Economy
By: Dan_Steinbock
Despite seemingly mixed messages, China’s great shift from easing to tightening has begun. While growth will continue to decelerate, it can still remain on the deceleration track, even as deleveraging has begun.
In May, Moody’s Investor Service downgraded China’s credit rating. But it took less than a day for Chinese financial markets to recover from the downgrade. Recently, index giant MSCI announced the partial inclusion of China-traded A-shares in the MSCI Emerging Market Index. After all, China is currently under-represented in global equity indices relative to its economic influence. The inclusion is predicated on a long and gradual move.
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