Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
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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Wednesday, November 05, 2014
Japanese Governments Revenge On Its People / Economics / Japan Economy
By: Raul_I_Meijer
I know I’ve written a lot about Japan lately, and that for some it’s been enough for a while, but still, what happens today under the no longer rising sun is going to have such repercussions worldwide that it would be foolish not to pay attention. Moreover, there’s something about what Bank of Japan Governor Haruhiko Kuroda said this morning that both perfectly and painfully illustrates to what depths, economically as well as morally, the country has sunk.
Wednesday, November 05, 2014
Japan's kaput?! / Economics / Japan Economy
By: Axel_Merk
Japan’s economy is down but not yet out. The world’s third largest economy won’t go quietly. Both these statements are merely my opinion, but if you believe there’s a risk that I’m right, you may want to pay attention to what the implications may be.
Tuesday, November 04, 2014
The Costs of Ebola on Guinea and Sierra Leone / Economics / Ebola
By: Steve_H_Hanke
For a clear snapshot of a country's economic performance, a look at my misery index is particularly edifying. The misery index is simply the sum of the inflation rate, unemployment rate and bank lending rate, minus per capita GDP growth.
The epicenter of the Ebola crisis is Liberia. My Oct. 17 blog post reported on the level of misery in and prospects for Liberia.
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Sunday, November 02, 2014
Hyperinflation - When Money Dies: Germany and Paper Money After 1910 / Economics / HyperInflation
By: MISES
Marcia Christoff-Kurapovna writes: The story of the destruction of the German mark during the hyper-inflation of Weimar Germany from 1919 to its horrific peak in November 1923 is usually dismissed as a bizarre anomaly in the economic history of the twentieth century. But no episode better illustrates the dire consequences of unsound money or makes a more devastating, real-life case against fiat-currency: where there is no restraint, monetary death will follow.
Saturday, November 01, 2014
The Most Important U.S. Economic Charts You'll See / Economics / US Economy
By: DailyWealth
David Eifrig writes: The market is crashing... Ebola is running rampant... Look out for cloaked and bearded ISIS warriors.
You can always find a lot of fear-mongering in the news and in financial markets. Right now, it appears to be a particularly worrisome time.
Most of it is nonsense...
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Saturday, November 01, 2014
US Now Importing the World's Deflation / Economics / Deflation
By: John_Rubino
With US QE about to end, the rest of the world faced the prospect of another "taper tantrum" financial crisis, one that this time around could suck the world into a deflationary vortex. So it should come as no surprise that the end of QE was countered with a series of offsetting treats for the global financial markets:
• The US Fed promised to keep interest rates low for a really long time.
• The European Central Bank announced that in November it would start buying asset backed bonds, in effect beginning an open-ended, potentially huge debt monetization program of its own.
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Friday, October 31, 2014
The Deflation Boogeyman / Economics / Deflation
By: Frank_Hollenbeck
Here we go again. A plunge in oil prices has spurred a bevy of articles from the bought-and-paid-for media, as well as quasi-governmental agencies, alerting us of pending disaster if deflation were allowed to make an entrance, however briefly. Never mind that there is no theoretical or empirical evidence to justify this fear of deflation. (explanation here) According to the St. Louis Fed:
“While the idea of lower prices may sound attractive, deflation is a real concern for several reasons. Deflation discourages spending and investment because consumers, expecting prices to fall further, delay purchases, preferring instead to save and wait for even lower prices. Decreased spending, in turn, lowers company sales and profits, which eventually increases unemployment.”
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Wednesday, October 29, 2014
As the Eurozone Economy Stalls, China Cuts the Red Tape / Economics / China Economy
By: Frank_Holmes
Forty-four percent. That's the alarming unemployment rate for those aged 15 to 25 in Italy, where I traveled recently to meet with other global chief executives and business leaders.
The reason for Italy's high youth unemployment? Tortuous red tape, high taxation and thuggish unions. Many of the CEOs at the event I attended noted that Italy is mired in unionization. This has created a restrictive jobs market that crowds out well-educated, aspirational young people, many of whom are forced to flee their homes and seek work elsewhere.
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Wednesday, October 29, 2014
Bulgaria: Liquidate KTB, Now / Economics / Eastern Europe
By: Steve_H_Hanke
The long-awaited audit of the Corporate Commercial Bank’s (KTB’s) assets has been released by the Bulgarian National Bank (BNB). In its wake, a debate has arisen about the future of the KTB: Should it be recapitalized? And if KTB is recapitalized, should the Bulgarian or the European authorities be responsible? However, it is clear from the results of the audit that, once the obscurity of the technocratic arguments is stripped away, there can be no debate. KTB should be liquidated as soon as possible, and whatever proceeds can be obtained in liquidation should be used to reimburse guarantees to depositors paid from the Bulgarian Deposit Insurance Fund (BDIF).
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