Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, November 17, 2014
Japan's Last Stand - Inflate or Die / Economics / Japan Economy
By: Michael_Pento
There is a popular American military term called a "last stand", which is meant to describe a situation where a combat force attempts to hold a defensive position in the face of overwhelming odds. The defensive force usually sustains very heavy casualties or is completely destroyed, as happened at Custer's Last Stand. General Custer, misreading his enemy's size and ability, fought his final and fatal battle of Little Bighorn; leading to complete annihilation of both himself and his troops.
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Friday, November 14, 2014
Hyperinflation in the U.S.? / Economics / HyperInflation
By: Dr_Jeff_Lewis
“WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”
-General Smedley Butler, USMC
“Let me issue and control a nation's money and I care not who writes the laws.”
-Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild
Friday, November 14, 2014
Debt, Propaganda And Now Deflation / Economics / Deflation
By: Raul_I_Meijer
Looks I have to return to the deflation topic. I’m a bit hesitant about it, because the discussion always gets distorted by varying definitions and a whole bunch of semi-religious issues. The Automatic Earth has for many years said that an immense bout of deflation is inevitable because of global debt levels, and it’s all only gotten a lot worse since we first said that. Our governments and central banks have ‘fought’ deflation with more debt, and that was always the stupidest idea in human history. Or at least, most of us were stupid for believing it would work, or was even intended to.
Friday, November 14, 2014
Inflation Chronicles - Art Prices So High, “The Crowd Forgot To Clap” / Economics / Inflation
By: John_Rubino
Depending on which expert is talking, the world is either falling into a deflationary abyss or launching an inflationary moonshot. What’s truly weird and fascinating is that they’re both right. The mountain of debt taken on in the past few decades exerts a profoundly deflationary pull on the economies of Europe and Japan, and to a lesser extent the US. At the same time the torrent of currency flowing out of the world’s central banks is swelling the accounts of the super-rich who are converting it into real assets as fast as they can, causing near-hyperinflation in some favored markets. Hence the spectacle of Paul Krugman (and most Fed governors) complaining about low inflation and warning of a deflationary death spiral, while things like this are happening:
Thursday, November 13, 2014
The Most Destructive Generation Ever / Economics / Demographics
By: Raul_I_Meijer
I’m afraid I got to delve into a particularly unpopular topics once again today. Blame it on Bloomberg. They ran a piece on the Silent Generation (people born between 1928-’45), which finds it self in a ‘sweet spot’ but refuses to spend enough. A funny problem: the by far richest group in the US doesn’t spend, while those who would like to spend, for instance to build a home and a family, are too poor to do it.
I know I’m not going to make myself popular with what I have to say about this, but then I’m not running for US President, or Miss Universe for that matter. Besides, people should be careful about taking things personal that are not.
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Thursday, November 13, 2014
What Are The Odds in 2015: Inflation or Deflation? / Economics / Deflation
By: Submissions
TCE writes: Like other Central Banks, the U. S. Federal Reserve has “printed” copious quantities of money. Despite better GDP numbers and positive media commentary, much of the American economy continues to be lethargic. The Eurozone appears increasingly vulnerable to recession. Financial and geopolitical risks could derail economic growth. What are the long term trends that will shape the outcome?
Wednesday, November 12, 2014
The Economics of Tipping / Economics / Economic Theory
By: MISES
Ken Zahringer writes: My dinner companion sounded indignant. “It’s a shame we have to tip the waitress,” she said. “The restaurant owner ought to pay the staff enough to live on.”
I imagine that is a common attitude among those steeped in our current cultural climate of envy and dislike of economic success — the anti-capitalist mentality, as Mises put it. It’s easy to fall into the trap of thinking that we tip waiters out of sympathy, due to their misfortune of having to work in an industry full of greedy restaurant owners who won’t pay a “living wage.” In fact, tipping is an elegant market solution to a particular set of circumstances, often present in service jobs, that makes determining an appropriate wage extremely problematic. The practice of tipping used to be more common, applying to many more service positions than at present, when it is largely restricted to waitstaff and skycaps. Part of the reason for its partial demise is just the wandering course of economic change, but many jobs that used to be paid primarily by tips came to be covered by minimum wage legislation and simply disappeared.
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Tuesday, November 11, 2014
Scary Bank of Japan Goes All In Again - Abenomics 2.0 / Economics / Japan Economy
By: John_Mauldin
Grant Williams writes: Last week, appropriately enough on Halloween, the Bank of Japan did something truly scary.
As shocks go, this one — though it had been fairly well-telegraphed to the markets that something wicked this way might be coming — was in a league of its own.
I’m sure that by now you’re well aware of what Kuroda-san (the Governor of the Bank of Japan) announced to the world; but in case you’re not, here’s a little recap:
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Tuesday, November 11, 2014
U.S. Jobs - Why Janet Yellen Needs Her Own Magic Show / Economics / US Federal Reserve Bank
By: Don_Miller
What do Siegfried and Roy have in common with Federal Reserve Chairman Janet Yellen?
Shortly after the Bureau of Labor Statistics released unemployment data last month showing that joblessness had dropped below 6% for the first time since the 2008 crash, the Federal Reserve announced it would stop government bond purchases; Quantitative Easing is history.
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Tuesday, November 11, 2014
Unemployment May Be Down, but Our Future Looks Like a Disaster / Economics / Employment
By: Money_Morning
Shah Gilani writes: Finally, things are better, right?
I’m talking about the Friday employment numbers, not the election.
Though they do have something in common. I’ll get to that.v
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Tuesday, November 11, 2014
Deflation Rearing its Ugly Head in Subtle and Not-So-Subtle Ways Around the Globe / Economics / Deflation
By: EWI
By Steve Hochberg and Pete Kendall
The following article was adapted with permission from the November 2014 issue of The Elliott Wave Financial Forecast, a publication from Elliott Wave International, the world's largest market forecasting firm. Follow this link for the complete article.
According to the latest figures, deflation is now perched on China's doorstep.
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Tuesday, November 11, 2014
Deflation Danger - The Last Argument of Central Banks / Economics / Deflation
By: John_Mauldin
For a central banker, deflation is one of the Four Horsemen of the Apocalypse: Death, Famine, Disease, and Deflation. (We will address later in this letter why War, in the form of a currency war, is not in a central banker’s Apocalypse mix.) It is helpful to understand that, before a person is allowed to join the staff or board of a central bank, he or she is taken into a back room and given DNA replacement therapy, inserting a gene that is viscerally opposed to deflation. Of course, in fairness, it must be noted that central bankers don’t like high inflation, either (although, looking around the world, we see that the definition of high inflation can vary). In the developed world, 2% inflation seems to be the common goal. You wouldn’t think that 2% a year is a significant change in the overall price structure, but the panic among economists that would ensue with a 2% price deflation would border on hysteria.
Tuesday, November 11, 2014
Are You Expecting A Recession? / Economics / Recession 2015
By: Raul_I_Meijer
The folks at Bloomberg put this piece up today with the intriguing title‘Predictors of ’29 Crash See 65% Chance of 2015 Recession’, and I thought: wait a minute, that’s what people, lots of people, actually think, that there’s going to be recession. While still others will trust Morgan Stanley and Goldman Sachs, who, as the article put it, “posit an expansion that has plenty of room to run.”
For the vast majority of those in the world of finance, and probably in a much wider world, those are the options, because that’s how they think. Either more of the same, or a recession, as we know it in a cyclical sense, where the economic cycle goes up and down but in the end keeps turning up. And where any sudden moves are telegraphed well in advance by monetary authorities for the grace and benefit of them, the investors, so they don’t lose too much and can instead profit at every step, whether it’s up or down.
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Monday, November 10, 2014
How Macroeconomic Data Encourages Government Intervention / Economics / Government Intervention
By: Frank_Shostak
Frank Shostak writes: It is generally held that for an economist to be able to assess the state of the economy, he requires macroeconomic indicators which will tell him what is going on. The question that arises is this: why is it necessary to know about the state of the overall economy? What purpose can such types of information serve?
Careful examination of these issues shows that in a free market environment it doesn’t make much sense to measure and publish various macroeconomic indicators. This type of information is of little use to entrepreneurs. The only indicator that any successful entrepreneur must pay attention to is whether he makes profit. The higher the profit, the more benefits a particular business activity bestows upon consumers.
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Monday, November 10, 2014
The Biggest Threat to U.S. Jobs: “The Contestability Nightmare” / Economics / Employment
By: John_Mauldin
Today’s Outside the Box comes from Sam Rines of Chilton Capital Management in Houston, TX – a promising young economics contributor to The National Interest and a rising star who I met at Worth Wray’s wedding a few weeks ago.
Worth and Sam have developed quite the friendship over the past several months, but it didn’t take much convincing from Worth to get me to share Sam’s latest article with you. Sam’s work speaks for itself and I am VERY impressed by his insights on a wide range of economic issues – from the evolution of Fed policy and growing risk of a rising US dollar, to the long-awaited industrialization of India.
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Monday, November 10, 2014
A World Run On Broken Economic Models / Economics / Global Economy
By: Raul_I_Meijer
As I was writing The Broken Model Of The Eurozone yesterday, I already knew there would have to be a sequel, because doing everything in one go would have been too much. And then, considerably less than two seconds later, it dawned on me that if I wanted to cover broken models and systems, a book would be the very least. But I don’t want to write a book, or, certainly, not here and now. Therefore, the best I think I can do is to sit down and let it flow, train of thought, stream of consciousness, probably the approach that suits me best to begin with.
Sunday, November 09, 2014
Why The Theory of Money and Credit Is More important Than Ever / Economics / Economic Theory
By: MISES
Richard Ebeling writes: Eighty years ago, in the autumn of 1934, Ludwig von Mises’s The Theory of Money and Credit first appeared in English. It remains one of the most important books on money and inflation penned in the twentieth century, and even eight decades later, it still offers the clearest analysis and understanding of booms and busts, inflations, and depressions.
Mises insisted that the economic rollercoaster of the business cycle was not caused by any inherent weaknesses or contradictions within the free market capitalist system. Rather, inflationary booms followed by the bust of economic depression or recession had its origin in the control and mismanagement by governments of the monetary and banking system.
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Sunday, November 09, 2014
Why a Strong U.S. Dollar is the Ultimate Economic Stimulus / Economics / US Dollar
By: Clif_Droke
Earlier this year commodities prices were fairly buoyant thanks in part to strong demand in Asia. The strength didn’t last long, however, and by summer weakness was evident in Europe and China. Global growth slowed considerably in the months leading up to October, when oil plunged below $90/barrel for the first time since 2012. Apart from weakening global demand and the growth of energy supplies (thanks to fracking), the strengthening U.S. dollar has accelerated this trend.Read full article... Read full article...
Sunday, November 09, 2014
The Broken Model Of The Eurozone Economy / Economics / Euro-Zone
By: Raul_I_Meijer
I stumbled upon these few words in an Ambrose Evans Pritchard article the other day, and they hit me almost like some sort of epiphany, which in turn made me feel a little stupid, because it’s all so obvious. What Ambrose wrote (and this time I’m not making fun of him), was about the eurozone (EMU), of which he said:
Read full article... Read full article...The North is competitive. The South is 20% overvalued.
Thursday, November 06, 2014
The Errors in Liquidity Preferences / Economics / Economic Theory
By: Frank_Hollenbeck
The theoretical construct of Keynes’s monetary view of the world is known as the liquidity preferences theory of money. This theory is the foundation of many macroeconomic models and stands in stark contrast to the classical view of interest rates, the loanable funds theorem.
Much of Keynes’ work, including this theory, disproportionately elevated the importance of holding cash as a key economic variable. Income can be consumed, saved or held in cash. Consumption is for personal satisfaction. Saving is a transfer of claims on goods and services from consumers to investors. Holding cash, or hoarding, is the equivalent of stuffing money in your mattress.
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