Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, February 03, 2015
Why the Government Hasn’t Yet Managed to Destroy the Economy / Economics / Economic Theory
By: MISES
John P. Cochran writes: Pierre Lemieux wrote an indispensible book (Somebody in Charge: A Solution to Recession) for anyone who wishes to understand the before, during, and immediate aftermath of the “Great Recession.”
The book’s importance is greater than just his analysis of the crisis. He thoroughly exposes the underlying weaknesses and fallacies of the whole Keynesian policy-activism agenda driven by the “animal spirits,” the irresistible urge to action of those who wrongly deem themselves in charge.
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Monday, February 02, 2015
Potential For Deflation Is Becoming A Big Threat For 2015 / Economics / Deflation
By: Sy_Harding
The fears after 2001 were that the Fed’s easy money policies to pull the economy out of the 2001 recession, followed by even more easing, including the near-zero Fed Funds rate instituted after the 2008 financial meltdown, would result in runaway inflation.
Spiraling inflation was so sure to show up that gold, the historical hedge against inflation, surged up in a powerful 10-year bull market, rising from $250 an ounce in 2001 to $1,900 an ounce in 2011.
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Friday, January 30, 2015
U.S. Asset Price Deflation Coming Up? Food Prices Drop? CPI Negative? Credit Deflation? / Economics / Deflation
By: Mike_Shedlock
When inflation alarmists want to convince everyone the dollar is about to become worthless, they post this chart of the CPI.
Friday, January 30, 2015
7 Things about Saudi Arabia You Need to Know / Economics / Saudi Arabia
By: Frank_Holmes
A week ago we learned that the king of Saudi Arabia, Abdullah bin Abdulaziz Al Saud, passed away at the age of 90. Following the announcement, crude oil immediately spiked 2.5 percent over uncertainty of how this might affect the Middle Eastern kingdom’s position on keeping oil production at current levels.
But the new leader, King Salman bin Abdulaziz Al Saud, has already tamped down this uncertainty, stating that Saudi Arabia will hold to the decision made at last November’s Organization of Petroleum Exporting Country (OPEC) meeting.
Tuesday, January 27, 2015
Austrians and the Mainstream Economists / Economics / Economic Theory
By: MISES
John Cochran writes: Mises Institute: You recently retired after a long time at Metropolitan State University of Denver, where you were both an economics professor and the dean of the Business School. How did you end up there, and end up as dean?
John Cochran: I had a good guardian angel who helped me come to Metro State. I’m not sure about that on becoming dean, though. I received my undergraduate degree in economics from Metro State. Gerald Stone, then chair of the econ department, and Ralph Byrns were two of my professors there. As I worked on my graduate degrees at University of Colorado-Boulder, I would occasionally stop by Metro just to touch base. In spring 1981, I was just completing teaching my first principles course at UC-Boulder and had just completed the requirements for an MA in economics. The first edition of the Byrns and Stone principles book would be available for fall 2001. Metro had an open visiting position and had offered the job to a recent CU PhD. He had told them he would take their job, but wouldn’t use their book. Ralph and Jerry were talking it over and Ralph said to Jerry, “We can’t hire him.” Jerry said, “We can’t not hire him just because he said he won’t use our book.” Ralph replied, “But he is telling us he will be a ‘lunch tax’.” Jerry said, “Yes, but who else can we get?” [A “lunch tax” is a high-maintenance employee. — Ed.]
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Monday, January 26, 2015
Why Private-Sector Services Seem to Be More Expensive / Economics / Economic Theory
By: MISES
Predrag Rajsic writes: Imagine you are a promising car mechanic who wants to open a new car repair shop. You would like to provide basic services to low-income citizens at affordable prices. You would charge a bare minimum for your labor, and you would buy used (but decent) replacement parts. This service would be great for people who just want to keep their cars running for a couple more years — nothing fancy, just bare functionality.
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Monday, January 26, 2015
Greece Votes for Syriza Hyperinflation - Threatening Euro-zone Collapse or Perpetual Free Lunch / Economics / Eurozone Debt Crisis
By: Nadeem_Walayat
Greeks voted for Syriza as the largest party on 36.5% that puts the radical left party within a couple of seats of securing a majority of 151 seats in Greece's 300 seat parliament which includes automatically getting allotted an extra 50 seats. So Syriza rather than to seek to form another coalition government that tend to be the norm in Greece has a chance of going it alone. The people of Greece having had enough of near 5 years of economic austerity that had yet to fully succeed in correcting the preceding decade long partying spending and corrupt kickbacks binge at the euro-zones expense. Now the people of Greece have effectively done a deal with the devil that promises to return Greece to the good old party days of rampant debt printing (fake government debt statistics) and corrupt governance all without the consequences of accelerating double digit inflation as a consequence of being within the euro-zone.
Sunday, January 25, 2015
The Private Equity Boom, Easy Money, and Crony Capitalism / Economics / Economic Theory
By: MISES
Brendan Brown writes: Amongst the big winners from the Obama Fed’s Great Monetary Experiment has been the private equity industry. Indeed this went through a near-death experience in the Great Panic (2008) before its savior — Fed quantitative easing — propelled it forward into new riches. There is no surprise therefore that its barons who join the political stage (think of the last Republican presidential candidate) have no interest in monetary reform. And the same attitude is common amongst leading politicians who hope private equity will provide them high-paid jobs when they quit Washington.
Saturday, January 24, 2015
How Greek Debt Default May Still Unravel the EU / Economics / Eurozone Debt Crisis
By: Frank_Hollenbeck
Greece is back in the headlines. This should surprise no one. It was naïve to think that Greeks would accept being debt slaves forever.
Despite all the rumblings that Greece will be forced to leave the Euro, there is in reality no mechanism by which EU countries can force a Eurozone member to exit the currency union. It really is all a bluff. This is a standard scare tactic used by governments to induce people to give up freedom for a little security.
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Friday, January 23, 2015
Debt and Deflation: Three Financial Forecasts - There's More Than Falling Prices / Economics / Deflation
By: EWI
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Thursday, January 22, 2015
The Eurozone and the Beauty of Deflation / Economics / Deflation
By: GoldSilverWorlds
The Eurozone has been hovering around a 1% inflation rate, getting closer to zero during 2014, nothing close of the ambitious 2% benchmark set by central banks. Any small downward adjustment in the inflation rate will put it in the negative territory, allowing for prices to spiral downward. The West is genuinely fearful of deflation. Headlines in leading papers were very strong in reflecting this fear, describing deflation as “the world’s biggest economic problem”, or the “nightmare” that stalks Europe that will lead to its “descent” and collapse.
Wednesday, January 21, 2015
Deflation Bonanza! And the Fool's Mission to Stop It / Economics / Deflation
By: Mike_Shedlock
Of all the widely believed but patently false economic beliefs is the absurd notion that falling consumer prices are bad for the economy and something must be done about them.
The recent move in the Swiss franc puts a spotlight on the issue. For example, on Sunday, in Swiss Peg Removal: Did Anyone Win? I commented ...
One widely recognized "big loser" is the tourism industry. For sure, hotel prices in Switzerland rose as much as 40% overnight compared to prices elsewhere.Read full article... Read full article...But Swiss grocery shoppers buying food imports from France, Spain, and the rest of Europe benefit mightily.
Thursday, January 15, 2015
U.S. Retail Sales Post Huge Downward Surprise, Economic Recovery Finally Over / Economics / Recession 2015
By: Mike_Shedlock
So much for those allegedly strong Christmas sales. In fact, sales of nearly everything were down in the today's Commerce Department Retail Sales Report for December 2014.
Retail sales were down 0.9% compared to November vs. economist expectations of a 0.1% decrease. November was revised from +0.7 percent to +0.4 percent.
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Wednesday, January 14, 2015
The Fed Reality Trumps Rhetoric / Economics / US Federal Reserve Bank
By: MISES
Shawn Ritenour writes: Throughout the existence of the Fed, its officers and intellectual supporters understandably asserted that the government’s movement toward central banking was a most beneficial evolution. In a 1948 issue of The Federal Reserve Bulletin, for example, Fed Chairman Thomas B. McCabe asserted that money production could not manage itself, so we need a central bank such as the Fed that acts for the public interest. Nearly three decades later, the venerable Arthur Burns claimed that the basic assets of the Fed are concern for the general welfare, moral integrity, respect for tested knowledge, and independence of thought.
Wednesday, January 14, 2015
UK CPI Inflation Smoke and Mirrors Deflation Warning, Inflation Mega-trend is Exponential / Economics / Inflation
By: Nadeem_Walayat
The official CPI measure for UK Inflation fell to just 0.5% in December with the more recognised RPI falling by 0.4% to 1.6% prompting the mainstream press to turn it's Eye of Sauron onto Inflation as the topic of the day, usually leading with commonsense reporting of the positives of low inflation such as falling energy and fuel costs and more disposable earnings for Britains wages slaves after having struggled for over 6 years with stagnating and even falling real terms wages. Though the media reports soon conclude with a lengthy explanation by an academic economist of why deflation is very, very, very bad in that it could trigger a downward economic death spiral as consumers put off buying goods and services in anticipation of lower future prices and hence the economy enters into an deflationary spiral of falling demand and output as occurred during the 1930's and for a few months into Mid 2009.
Monday, January 12, 2015
Enjoy the Ride on the Inflation/Deflation Rollercoaster / Economics / Deflation
By: Michael_Pento
Politicians and central bankers are desperately trying to convince investors that the economy has returned to what they deem as a “pre-crisis normality”. But the truth is the global economy has never been in a more fragile condition. In an example of just how precarious the Fed-engineered asset bubbles have become, all of the 2014 U.S. equity market gains were wiped out by just a few really bad trading days in October.
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Friday, January 09, 2015
2015: The Year of the Global Economic Slump? / Economics / Recession 2015
By: Alasdair_Macleod
2014 ended with two ominous developments: the strength of the US dollar and a collapse in key commodity prices. It is tempting to view both events as one, but the continuing fall in oil prices through December reveals they are sequential: first there was a greater preference for dollars compared with other currencies and this still persists, followed by a developing preference for all but the weakest currencies at the expense of raw materials and energy. These are two steps on a path that should logically lead to a global slump.
Monday, January 05, 2015
Sayonara Global Economy - As Goes Japan, So Goes the World / Economics / Global Debt Crisis 2015
By: James_Quinn
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises
The surreal nature of this world as we enter 2015 feels like being trapped in a Fellini movie. The .1% party like it's 1999, central bankers not only don't take away the punch bowl - they spike it with 200% grain alcohol, the purveyors of propaganda in the mainstream media encourage the party to reach Caligula orgy levels, the captured political class and their government apparatchiks propagate manipulated and massaged economic data to convince the masses their standard of living isn't really deteriorating, and the entire facade is supposedly validated by all-time highs in the stock market. It's nothing but mass delusion perpetuated by the issuance of prodigious amounts of debt by central bankers around the globe. And nowhere has the obliteration of a currency through money printing been more flagrant than in the land of the setting sun - Japan. The leaders of this former economic juggernaut have chosen to commit hari-kari on behalf of the Japanese people, while enriching the elite, insiders, bankers, and their global banking co-conspirators.
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Monday, January 05, 2015
Weak CNY + Low Wages + Ultra Low Interest Rates = Deflationary Pressures 2015 / Economics / Deflation
By: Ashraf_Laidi
Deflation will be the dominating theme of 2015. Deflation occurs when prices of production factors (wages and interest rates) fall to the extent of limiting labour and capital from drawing higher prices. The culprit to these conditions is typically an excess supply of labour and capital to the extent that wages and interest rates weaken substantially until they draw sufficient demand to the point of stabilising their price.
Monday, January 05, 2015
Why the World Needs the US Economy to Struggle in 2015 / Economics / US Economy
By: John_Mauldin
The headlines this morning talk about the US dollar hitting an 11-year high. I have been saying for years that the dollar is going to go higher than anyone can imagine. This trade is just in the early innings. And the repercussions will be dramatic, not only for emerging markets that have financed projects in dollars, but also for commodities and energy, gold, and a variety of other investments. The world is at the doorstep of a new era of volatility and currency wars.