
Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Monday, November 26, 2007
UK Inflation Forecast 2008 (RPI and CPI) / Economics / Inflation
By: Nadeem_Walayat
The recent up tick in UK inflation has sparked inflation concerns to continue going into 2008. However the Market Oracle anticipated the recent up tick as a consequence of money supply growth earlier in the year as an indicator of future inflation and that the up tick would prove temporary as many factors converge towards deflationary pressures during 2008 that will allow the Bank of England to start cutting UK interest rates towards a target of 5% before the decline in UK inflation starts and for UK inflation to subsequently fall towards the Market Oracle targets of 3% RPI and 1.8% CPI towards the end of 2008.
The following analysis presents some of the key factors that will result in the fall in UK Inflation during 2008.
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Tuesday, November 20, 2007
Is the US Economy Facing a Credit Crunch? / Economics / US Economy
By: Gerard_Jackson
Every time an economic crisis seems to be on the horizon you can bet your last dollar that scores of advisers will be warning that a drop in consumer confidence will cause a fall in consumer demand which will drive the economy into recession. For the umpteenth time, business spending drive the economy and not consumption. The Bureau of Economic Analysis now includes intermediate goods in its calculations, producing what it calls “gross output”. This figure shows business spending at about 50 per cent of aggregate spending. My own calculations put total spending at about $30 trillionRead full article... Read full article...
Monday, November 19, 2007
Australia’s Plummeting Unemployment: Miracle or Good Economics? / Economics / Austrailia
By: Gerard_Jackson
Australia’s seems to be facing the happy prospect of unemployment falling to 4 per cent or less. What was once thought to be impossible has become the mundane. How can this be? We have been told year after year that the jobless were doomed to be always with us because it would require a savage cut in real wage rates to restore full employment (Gittins Gregory). Therefore it would not only be heartless to cut real wages but also suicidal. I said at the time that this view was absolute rubbish. Time has once again proved me correct.Read full article... Read full article...
Saturday, November 17, 2007
Real US Inflation is 6% Not 2% Implying Stagflation / Economics / Inflation
By: John_Mauldin

- How do You Spell Stagflation?
- Cooking the Inflation Books
- Gaming the Producer Price Index
- Consumer Spending is Up, but then Again, It May Be Down
- A Two Dimensional Problem
- Saudi Justice
- New York, Toronto, Europe and Thanksgiving
This week we look at inflation. Is it just over 2%, giving the Fed room to cut rates, or will it be closer to 4% by the next FOMC meeting, making a rate cut problematic? How do they get those numbers? When and how can two opposite things be true at the same time? The answer depends on how many dimensions you are living in when you are asking the question. The Fed is going to be faced with a very difficult decision at its next meeting, and there results of there deliberations will be felt by you.
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Friday, November 16, 2007
US Is a Nation of Subprime Consumers - Foreign Exporters To Reduce US Exposure / Economics / UK Economy
By: Peter_Schiff
When home prices skyrocketed in the early part of this decade, everyone seemed to forget that the subprime borrowers were high risk by definition. Now that losses are snowballing, lenders are belatedly rethinking the “wisdom” of making such loans in the first place. Similar conclusions will soon be reached by foreign nations that have supplied American consumers with goods that they can not afford. In reality, America is a nation of subprime consumers.Read full article... Read full article...
Friday, November 16, 2007
Small Businesses Join Big Businesses and Households In Their US Economic Pessimism / Economics / US Economy
By: Paul_L_Kasriel
The Small Business Optimism Index, which is tallied by the National Federation of Independent Business, dropped 1.1 points in October to a level of 96.2. As shown in Chart 1, this October level is below levels that prevailed just before the past two recessions. Charts 2 and 3 show qualitatively similar results for large corporation CEOs and for the little people – households. It seems as though just about everyone is as or more pessimistic about the economic landscape as they were just prior to the past two recessions. Everyone, that is, except the stock jockeys today. I wonder what Kool-Aid they are drinking.Read full article... Read full article...
Thursday, November 15, 2007
Impact of Immigration on Economic Growth Jobs and Housing / Economics / Immigration
By: Gerard_Jackson

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Thursday, November 15, 2007
US October Retail Sales Growth Slows Whilst PPI Inflation Shows Small Rise / Economics / US Economy
By: Paul_L_Kasriel
Retail sales rose 0.2% in October, following a revised 0.7% gain in the prior month. Excluding autos and gasoline , retails sales edged up 0.1% during October after a 0.2% increase in the prior month. The component of retail sales which excludes autos, gas , and building materials, often used to gauge underlying strength of consumer spending, held steady in October following a 0.2% gain in the prior month. The August reading (-0.4% now vs. 0.0 original estimate) of this measure shows a downward revision, which points to a downward revision of consumer spending in the third quarter. Each of these measures sends a convincing message of soft retail sales.Read full article... Read full article...
Thursday, November 15, 2007
China Inflation Problem A Result of Policy of Support for the US Dollar / Economics / China Economy
By: Paul_L_Kasriel
China's inflation problem will continue as long as the U.S. dollar remains under downward pressure and the Chinese policy is to cushion the greenback’s decline. Chart 1 illustrates the result of China’s inflation problem – i.e., rising prices for goods/services, financial assets and real assets. Chart 2 illustrates the reason for China’s inflation problem – i.e., excessive credit creation by the People’s Bank of China (PBoC), the Chinese equivalent of the U.S. Federal Reserve.Read full article... Read full article...
Thursday, November 15, 2007
Bank of England Warning Over UK Economy - Stagflation Risk During 2008 / Economics / UK Economy
By: Nadeem_Walayat
Mervyn King, the Bank of England Governor belatedly recognised that the credit crunch is likely to strongly impact the UK Economy during 2008 resulting in a sharp slowdown accompanied by rising inflation going into 2008.Read full article... Read full article...
Thursday, November 15, 2007
Credit Crisis Meltdown Is a Prelude to Global Economic Depression / Economics / Recession
By: Christopher_Laird
Monster Western credit crisis – prelude to a depression
- The present contraction of credit
- Gold in this situation
Present contraction of credit
The West (US,EU, Canada) is in the midst of a gigantic and spreading credit crisis that may well to lead it into a depression, if it is not fixed soon. So far, Central bank infusions (Over $1trillion worth in a few months since July!) have been the only thing that has stopped a massive bank liquidity crisis from shutting down commerce. But the damage to credit markets thus far is so huge, and worsening rapidly, that a very bad outcome seems assured. Gregory Peters of Morgan Stanley said there is a better than 50% chance of a systemic banking crisis that will hammer credit markets at this time.
Wednesday, November 14, 2007
Inflation Expectations Are Expected To Soar During 2008 / Economics / Inflation
By: Jordan_Roy_Byrne

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Wednesday, November 14, 2007
United States Living on Borrowed Time As Housing Bust Could Bankrupt Mortgage Insurers / Economics / US Economy
By: Mike_Whitney

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Monday, November 12, 2007
US Dollar Devaluation Signals Risk Of Accelerating Global Hyperinflation / Economics / Inflation
By: Captain_Hook

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Monday, November 12, 2007
Interest Rates, Budget Surpluses and Other Economic Fallacies / Economics / US Interest Rates
By: Gerard_Jackson
One only has to read the financial pages of any newspaper to fully experience the poverty of economic thought that pervades the media. It is important to understand that what is considered by the media as sound economics is — bye and large — merely a reflection of the economic thinking that dominates the Treasury and the Reserve Bank. Terry McCrann — Herald Sun finance writer — is an excellent example of what I mean. I want to make it clear, however, that I am not picking on McCrann. I am only trying to clear the economic waters that the likes of McCrann have inadvertently muddied.Read full article... Read full article...
Monday, November 12, 2007
The Depreciating US Dollar and the US Economy / Economics / US Economy
By: Gerard_Jackson
Well, we are certainly living in interesting times, bearing in mind that this is said to be a Chinese curse. Consumer confidence is down even though consumer spending seems to be holding up month after month. The Dow Jones Industrial Average drops by 223.55, sending out panic signals to numerous investors. Yet this fall amounted to only 1.69 per cent. We then get the news that productivity leapt to an annualised rate of 4.9 per cent in the July-September quarter while unit labour costs eased.Read full article... Read full article...
Sunday, November 11, 2007
Impact of the Credit Crunch on UK Borrowers Debt Mountain Going into 2008 / Economics / UK Economy
By: Nadeem_Walayat

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Friday, November 09, 2007
Deteriorating Economic Conditions From Main Street to Wall Street / Economics / US Economy
By: Peter_Schiff

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Monday, November 05, 2007
How Long Can The US Economy Defy Economic Gravity? / Economics / US Economy
By: Gerard_Jackson
Some readers (judging by their tone, I think they are Democrats) took issue with my view that there was still steam in the US economy and that the subprime fiasco would not sink it (It's not the housing market that threatens the US economy). I also pointed out more than once that readers should not be surprised if the Fed cuts rates. Well, the jury has passed its verdict: real gross domestic product came in at an annual rate of 3.9 per cent for the third quarter. This was on top of the 3.8 per cent growth rate for the second quarter. Taken at face value one would have to say that the US economy is accelerating.Read full article... Read full article...
Monday, November 05, 2007
U.S. Economy: Some Cracks Showing / Economics / US Economy
By: Donald_W_Dony

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