Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Sunday, March 08, 2015
Why It Matters If the Dollar Is the Reserve Currency / Economics / US Dollar
By: MISES
Patrick Barron writes: We refer to the dollar as a “reserve currency” when referring to its use by other countries when settling their international trade accounts. For example, if Canada buys goods from China, China may prefer to be paid in US dollars rather than Canadian dollars. The US dollar is the more “marketable” money internationally, meaning that most countries will accept it in payment, so China can use its dollars to buy goods from other countries, not solely the US. Such might not be the case with the Canadian dollar, and China would have to hold its Canadian dollars until it found something to buy from Canada. Multiply this scenario by all the countries of the world who print their own money and one can see that without a currency accepted widely in the world, international trade would slow down and become more expensive. In some ways, its effect would be similar to that of erecting trade barriers, such as the infamous Smoot-Hawley Tariff of 1930 that contributed to the Great Depression.
Saturday, March 07, 2015
U.S. Employment Trends - What Age Groups Get the Jobs? / Economics / Employment
By: Mike_Shedlock
One interesting fact in today's jobs report (see Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K) was a drop in teenage unemployment of 1.7 percentage points while overall the unemployment rate fell by only 0.2 percentage points.
The only reason the overall rate fell was a plunge in labor force of 178,000. Household survey employment only rose by 96,000 vs. the establishment survey gain of an alleged +295,000.
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Friday, March 06, 2015
Who Benefits From Higher Minimum Wages? Demographic Perspective / Economics / Wages
By: Mike_Shedlock
Of all the ridiculous notion floating around in the liberal media is the notion that higher minimum wages will create jobs.
The theory goes like this: Pay people more, they will have more to spend, and by spending more they will create more jobs. On that basis, proponents argue for a $15 minimum wage at McDonald's. There are several obvious flaws in such arguments.
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Friday, March 06, 2015
Euro Depreciation and U.S. Manufacturing / Economics / Fiat Currency
By: John_Rubino
The premise of a currency war is that by devaluing its currency a country is able to sell things overseas more cheaply, which gooses its growth at the expense of its trading partners.
If it actually works that way, then you’d expect this chart of the euro plunging against the dollar…
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Thursday, March 05, 2015
Understanding True Credit and False Credit / Economics / Credit Crisis 2015
By: Frank_Shostak
There are two kinds of credit: that which would be offered in a market economy with sound money and banking (true credit), and that which is made possible only through a system of central banking, artificially low interest rates, and fractional reserves (false credit).
Banks cannot expand true credit as such. All that they can do in reality is to facilitate the transfer of a given pool of savings from savers (i.e., those lending to the bank) to borrowers.
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Thursday, March 05, 2015
Spock, Debt and the Kingdom of Denmark / Economics / Global Debt Crisis 2015
By: John_Mauldin
In Thoughts from the Frontline, I am in the middle of writing a series on debt. I realized on Sunday that the second installment wasn’t ready for prime time, so I will work on it some more and send it out (hopefully) this coming weekend. In the meantime, in keeping with the theme of debt, for today’s Outside the Box we have the following issue of The Credit Strategist from the ever-insightful Michael Lewitt. Michael starts out musing on debt and then shares a number of useful thoughts on a variety of market topics, with his usual panache.
Tuesday, March 03, 2015
Is Japan Zimbabwe? Could Japan go Hyperinflation? / Economics / HyperInflation
By: Axel_Merk
Is Japan Zimbabwe? How preposterous: Japan is an advanced economy that cannot possibly suffer the same fate as Zimbabwe. Right? Or could Japan get hyperinflation? Below I explain why Japan, and with it investors' portfolios, might be at risk.
Tuesday, March 03, 2015
BLS CPI Lie - How's That Dsflation Working Out for You? / Economics / Inflation
By: James_Quinn
The BLS put out their monthly CPI lie last week. They issued the proclamation that inflation is dead. Did you know your costs are 0.1% lower than they were one year ago. They then used these deflation numbers to proclaim your real wages soared last month. It’s all good. The American consumer is so flush with cash, they decided to spend less money for the second month in a row. The Wall Street shysters are so happy with declining consumer spending, declining corporate profits, and a global recession, they pushed the NASDAQ up to 5,000 for the first time in 15 years. Hey!!! That was the year 2000. Things really got better after that milestone.
Monday, March 02, 2015
The CPI Lag in Disguise / Economics / Inflation
By: Dr_Jeff_Lewis
Here’s another reader’s original and inspired perspective on the short term effects of consumer price inflation and how it differs from the inflation in speculative finance. This latter type of inflation will ultimately break the system and the currency.
Reader Dan pointed out:
“Regardless of the fluctuations in paper currency values, (which are basically measured against the value of gold), precious metals tend to retain their value in the long run as determined by their calculated exchange rates for goods and services.
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Friday, February 27, 2015
Why Expectations for Future Global Business Activity are Plunging / Economics / Global Economy
By: EWI
Enjoy an excerpt from "The State of the Global Markets 2015 Edition," a comprehensive report by Elliott Wave International
Editor's note: This article is excerpted from "The State of the Global Markets 2015 Edition," a comprehensive report by Elliott Wave International, the world's largest independent market-forecasting firm (data through December 2014). You can download the full, 53-page report here -- 100% free.
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Thursday, February 26, 2015
The Fed Waited Too Long: Here Comes Inflation / Economics / Inflation
By: EconMatters
Thursday, February 26, 2015
Ukraine Hyperinflation as Currency Plunges 44% in One Week! / Economics / HyperInflation
By: Mike_Shedlock
... Actual Black Market Rates; Poroshenko Gives 'Ultimatum' to Central Bank to Fix Exchange Rate
I hear various reports of what the hryvnia actually trades for on the black market in Ukraine. I believe the reports, but they come in piece-mail.
Today, I have an actual black market link to share thanks to reader Oleg from Crimea.
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Wednesday, February 25, 2015
From London to China - Where is Today's Skyscraper Curse? / Economics / Economic Theory
By: Mark_Thornton
Super tall buildings, or skyscrapers, are being built at an astonishing rate. Ninety-seven buildings that exceed 200 meters (656 feet) high were constructed in 2014, setting a new record. The previous record was eighty-one buildings completed in 2011. The total number of skyscrapers in existence now is 935, a whopping 350 percent increase since the year 2000.
Tuesday, February 24, 2015
U.S. Real Estate Economy Too Many Houses, Not Enough Jobs / Economics / US Economy
By: John_Rubino
Today’s existing home sales report was down another 4.9% to an annual rate of 4.82 million units, the lowest in nearly a year. And this, remember, is in the sixth year of a recovery with reported unemployment below 6% and the Fed preparing to raise interest rates to head off incipient overheating.
Tuesday, February 24, 2015
The Great Recession Redux / Economics / Great Recession
By: Michael_Pento
We are fast approaching the time when it will become obvious to all that mortally-wounded economies cannot be resuscitated by a massive increase in credit from central banks. Nations that suffer from tremendous capital imbalances, debt capacities and asset bubbles cannot be healed by printing money. Quantitative easing and zero percent interest rates have the ability to provide GDP growth that is merely illusory and ephemeral. This is because it can temporarily levitate equity, real estate and bond prices, which causes an artificial boom in employment and consumption. But the "benefits" of making the cost of money free has its limits, and it also comes with dire consequences.
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Sunday, February 22, 2015
Kazakhstan holding hands with Russia, Braces up for Economic Crisis / Economics / Emerging Markets
By: Pravda
The collapse of oil prices that has already eaten much of the income of both Russian and American corporations has reached Kazakhstan. The economic crisis is looming over another member of the Customs Union. Is there a threat to the Customs Union during the period of the economic hardship? What does the Kazakh administration do to avoid the crisis?
Sunday, February 22, 2015
Inflation is Dead, Long Live Inflation / Economics / Inflation
By: Submissions
Nicholas Migiliaccio writes: This is a composite index composed of securities whose movements tend to anticipate the subsequent commencing and movement of Inflation and Deflation.
In this illustration, the manifestation of Deflation, is subtracted from the manifestation of Inflation, and the remainder is displayed graphically.
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Sunday, February 22, 2015
Why the U.S. Workforce Still Shrinks as Job Growth Rises / Economics / Employment
By: EWI
A significant hint of economic softening is the slight decline in average hourly earnings in December. It came despite "a healthy 252,000 increase in jobs. Economists are struggling to explain the phenomenon," says the Associated Press. "I can't find a plausible empirical or theoretical explanation for why hourly wages would drop when for nine months we've been adding jobs at a robust pace," says a perplexed economist.
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Saturday, February 21, 2015
What Uber Could Teach the American Economy / Economics / US Economy
By: John_Mauldin
When I travel around the country, one of the questions that comes up often in conversation is, where will the jobs of the future come from? I have a stock answer that I glibly offer:
In 1980, the Japanese were beating our brains out. Inflation was well into the double digits, as was unemployment. Finding a job was hard (I know), as one industry after another was being reconfigured and jobs seemed to be disappearing left and right. The answer to the question “Where will the jobs come from?” back then was “I don’t know, but they will.”
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Friday, February 20, 2015
South Korea’s Keynesian Experiment Goes Global / Economics / South Korea
By: MISES
Ryan W. McMaken writes: Those of us who have reached a certain age remember the late 80s and early 90s when we were told that the Japanese were taking over the world. We bought their cars. We played their video games. We used their technology for pretty much everything. The Japanese were destined for world domination, we were told. They were better team players. They put more emphasis on the group than on the individual. They worked harder. In 1992, a high-ranking Japanese politician, Yoshio Sakurauchi, declared that Americans are “too lazy” to compete with Japanese workers, and that a third of American workers “cannot even read.” Michael Crichton’s 1992 novel Rising Sun (and the 1993 movie adaptation) fueled these controversies further in the minds of many Americans.