Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, September 08, 2015
Abenomics Stalls, So What’s Japan Supposed To Do Now? / Economics / Japan Economy
By: John_Rubino
It was just three years ago that new Prime Minister Shinzo Abe promised to pull Japan out of its “lost decades” by printing epic amounts of new yen. He got what he wanted from the Bank of Japan, which bought up pretty much all the available government debt with newly-created currency. After hardly changing at all in the previous seven years, the BoJ’s balance sheet — a proxy for its money creation — tripled.
Monday, September 07, 2015
U.S. Real Wealth Weaker than GDP Stats Show / Economics / Economic Statistics
By: Frank_Shostak
US real gross domestic product (GDP) grew faster than initially thought in Q2. GDP expanded at a 3.7 percent annual rate instead of the 2.3 percent rate reported last month and 0.6 percent in Q1. Most experts, in response to this figure, are now arguing that the US economy is strengthening visibly.
This, coupled with a relatively stable price level, raises the likelihood that the economy is approaching the path of healthy economic growth with stable price inflation.
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Sunday, September 06, 2015
The Failed Moral Argument for a "Living Wage" / Economics / Wages
By: MISES
Ryan McMaken writes: With Labor Day upon us, newspapers across the US will be printing op-eds calling for a mandated “living wage” and higher wages in general. In many cases, advocates for a living wage argue for outright mandates on wages; that is, a minimum wage set as an arbitrary level determined by policymakers to be at a level that makes housing, food, and health care “affordable.”
Saturday, September 05, 2015
Establishment Survey +173K Jobs, Private Jobs +140,000; U.S. Unemployment Rate 5.1% / Economics / Employment
By: Mike_Shedlock
The establishment survey came in a weaker than expected 173,000 job. The Bloomberg Consensus estimate was 223,000 jobs.
However, the preceding two months were revised up by 44,000 and wages were strong. Bloomberg provides a nice summation of the strengths and weaknesses.
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Friday, September 04, 2015
Bye Bye Brazil Economy / Economics / Brazil
By: John_Rubino
For about a decade there, Brazil was the Latin American country that got it right. Under a socialist but apparently reasonable government they kept their budgets under control, managed the population shift from farm to city, and developed some efficient export industries that brought in plenty of hard currency. The Brazilian real held its own on foreign exchange markets and inflation was, as a result, moderate.
Then it all fell apart. The US dollar spiked, commodity prices tanked, and it was discovered that a whole range of big local players were gaming the system in various ways, sparking a corruption scandal that reaches all the way to top.
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Tuesday, September 01, 2015
Weapons of Economic Destruction / Economics / Economic Theory
By: John_Mauldin
“Measurement theory shows that strong assumptions are required for certain statistics to provide meaningful information about reality. Measurement theory encourages people to think about the meaning of their data. It encourages critical assessment of the assumptions behind the analysis.
Tuesday, September 01, 2015
Last Week’s Top News Had Nothing to Do With the Stock Market / Economics / US Economy
By: ...
Here’s the news: The U.S. Commerce Department sharply revised upward its second-quarter gross domestic product (GDP) estimate. The agency now says the value of all goods and services in the nation for the second quarter grew at a seasonally adjusted 3.7% – that’s 61% higher than its earlier forecast.
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Friday, August 28, 2015
U.S. Economic Fundamentals 'Look Good' - Bullard of St. Louis Fed / Economics / US Economy
By: Bloomberg
St. Louis Federal Reserve President James Bullard spoke with Bloomberg's Brendan Greeley, Michael McKee and Tom Keene from the Jackson Hole economic symposium. He spoke about the outlook for monetary policy, the U.S. economy and recent market volatility.
Bullard said that while world financial markets are volatile, U.S. fundamentals are good: "I'm not denying it's a volatile period. But let me say this. U.S. fundamentals look good….The key question for the committee, and no decisions have been made here, but the key question for the committee is would you want to change the outlook based on the volatility that we've seen over the last 10 days? And I think the answer is going to be not very much."
Thursday, August 27, 2015
Why Devaluing the Yuan Won't Help China's Economy / Economics / China Economy
By: Frank_Shostak
Earlier this month, the Chinese government decided to depreciate its currency on three consecutive occasions. On August 13, the price of the US dollar was trading at 6.413 — an increase of 3.3 percent against July. The key factor behind the central bank’s lowering of the yuan is a sharp decline in the growth momentum of exports with the yearly rate of growth falling to minus 8.3 percent in July from 2.8 percent in June.
Wednesday, August 26, 2015
Why China's Economy is Deteriorating / Economics / China Economy
By: Steve_H_Hanke
The plunging Shanghai Stock Exchange and the sudden reversal in the yuan’s appreciation have caused fears to spread beyond China’s borders. Is something wrong with the world’s growth locomotive? In a word, yes.
The most reliable approach for the determination of nominal gross domestic product (GDP) and the balance of payments is the monetary approach. Indeed, the path of an economy’s nominal GDP is determined by the course of its money supply (broadly determined).
Monday, August 24, 2015
Japan Economy Clear Conclusions Concerning QE / Economics / Japan Economy
By: Michael_Pento
Japan was recently slammed with more bad economic news; growth contracted yet again in the second quarter. Gross Domestic Product for the world’s third largest economy fell by an annualized 1.6% in the three months ended in June.
The economic plan known as Abenomics, which promised massive money printing coupled with government spending would put the world's third largest economy on a path to sustainable growth, seems to have hit another roadblock. This latest contraction marks the third such set back since the optimistic launch of Abenomics at the end of 2012. Japan appears to be headed towards a triple dip recession.
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Sunday, August 23, 2015
Economics is Dead, and Economists Killed It / Economics / Economic Theory
By: MISES
Per L. Bylund writes: What we have seen over the course of the last eighty years is a systematic dismantling of the contribution of economics to our understanding of the social world. Whatever the cause, modern economics is now not much more than formal modeling using mathematics dressed up in economics-sounding lingo. In this sense, economics is dead as a science, assuming it was ever alive. Economics in mathematical form cannot fulfill its promises and neither the scientific literature nor advanced education in the subject provide insights that are applicable to or useful in everyday life, business, or policy.
Friday, August 21, 2015
Why China Economy Is in Trouble - It's the Slumping Money Supply / Economics / China Economy
By: Steve_H_Hanke
The course of an economy is determined by the course of that economy's money supply (broadly determined). The relationship between money growth and nominal GDP growth is presented in the accompanying chart. It is persuasive. Indeed, money, not fiscal policy, dominates.
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Friday, August 21, 2015
US BreakEven Inflation at 5-Year Lows / Economics / Inflation
By: Ashraf_Laidi
Neither higher than expected Philly Fed survey at 8.3 in August nor a dovish set of FOMC minutes has managed to ease the onslaught of selling in global equities. The old trick that a dovish Fed and poor data are good for stocks is no longer valid. An uncertain Fed drove down chances of a Sept Fed hike to 36% from close to 50% earlier in the week. Meanhwile, stock indices deepen their selloffs well after a series of DeathCrosses emerged in the S&P500, Dow-30, Dax-30, FTSE-100 and Shanghai Composite. which may suggest that they require the Fed to firmly shut the door on any 2015 rate cut.
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Thursday, August 20, 2015
The Global Economy’s Health Is Not That Complicated / Economics / Global Economy
By: Chris_Vermeulen
The Federal Reserve Bank has printed trillions of dollars to monetize US government debt just to keep the government afloat. Any significant rise in interest rates will probably decimate US government finances, the fragile housing market and in the bond market it will cause a financial catastrophe through interest rate derivatives.
This is a solid reason why the Fed will not raise any rates in any foreseeable future.
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Thursday, August 20, 2015
Inflation - Don’t Be Fooled By Our Current Price Stability / Economics / Inflation
By: Frank_Shostak
The yearly rate of growth of the personal consumption expenditure (PCE) price index adjusted for food and energy stood at 1.3 percent in June — the same figure as in May. Note that on average since the beginning of this year the yearly rate of growth stood at 1.3 percent. Many economists have expressed satisfaction that the yearly rate of growth has been stable so far notwithstanding that it stood below the Fed’s target of 2 percent.
Tuesday, August 18, 2015
Credit Indicates a Recession Is Here… And Possibly Even a Credit Crunch / Economics / Credit Crisis 2015
By: Graham_Summers
sThose looking for accurate data regarding the US economy should look into credit card applications and credit card company earnings.
Regarding the former, consider the recent rejections of credit applications data:
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Monday, August 17, 2015
The Psychological Driver of Deflation and the Collapse of the Trust Horizon / Economics / Deflation
By: Nicole_Foss
The collective mood shifts rapidly from optimism and greed to pessimism and fear as the bubble bursts, and as it does so, the financial system moves from expansion to contraction. Financial contraction involves the breaking of promises right left and centre, with credit instruments drastically revalued downwards in the process. As the promises that back them cease to be credible, value disappears extremely rapidly. This is deflation and the elimination of excess claims to underlying real wealth.
Sunday, August 16, 2015
Asset-Price Inflation Enters Its Dangerous Late Phase / Economics / Inflation
By: MISES
Brendan Brown writes: Asset price inflation, a disease whose source always lies in monetary disorder, is not a new affliction. It was virtually inevitable that the present wild experimentation by the Federal Reserve — joined by the Bank of Japan and ECB — would produce a severe outbreak. And indications from the markets are that the disease is in a late phase, though still short of the final deadly stage characterized by pervasive falls in asset markets, sometimes financial panic, and the onset of recession.
Sunday, August 16, 2015
Four Economic Myths that Perpetuate the Euro Crisis / Economics / Eurozone Debt Crisis
By: MISES
Patrick Barron writes: Too much of the commentary about the Greek crisis has focused on whether or not Greece should drop the euro and not enough on the structural problems arising out of decades of socialism. Meanwhile, the Greek government has borrowed more money than the Greek people can possibly repay, and debased money will not make this fact disappear. On the contrary, more easy money will cause even more harm.