Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, June 21, 2021
Feel the Inflationary Heartbeat / Economics / Inflation
By: John_Mauldin
Not all inflation is created equal. Peter Boockvar, CIO at Bleakley Advisory Group, has his finger on the economy’s pulse. And for the last year or so, he’s felt an inflationary heartbeat.Peter, who is the author of The Boock Report, in which he flash-analyzes the latest economic data in handy bite-size multiple emails per day, makes an important distinction between goods inflation and services inflation.
At Mauldin Economics' 2021 Strategic Investment Conference in May, Peter explained that they have been behaving differently. Looking at services inflation (ex-energy) within the Consumer Price Index, he showed that it averaged around 2.8% in the 20-year period leading up to the pandemic.
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Saturday, June 19, 2021
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets / Economics / HyperInflation
By: The_Gold_Report
Sector expert Michael Ballanger offers insights from bear markets of the past to illuminate the "business of money." How quickly we forget.
In each of the last five bear markets since the 1970s, I have etched into my neural storage unit memories as strong and clear as if they happened yesterday. Each one of those nasty declines were accompanied with events that marked the tops and bottoms, consistently found in errant behaviors, and whether they originate from greed, fear or desperation, they were memorable.
Some of those events were the irrational decisions of the investment industry, which always increases staff at the tops and reduces staff at major bottoms. It is found in the emotion-charged decisions of clients who would write letters of complaint because I would not them buy shares in the Hot Stock of the Month, usually some dilly named "Underground Airlines" or "Rectal Gas."
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Wednesday, June 16, 2021
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! / Economics / Inflation
By: Nadeem_Walayat
I know it can get a bit tiring to hear me bang on with the mantra of rampant money printing inflation, BUT one can tend to get lost in the detail i.e. looking at individual stocks and assets and forget the BIG PICTURE which really is one of RAMPANT MONEY PRINTING INFLATION!
For instance the stimulus that all nations have implemented is far in excess of the temporary loss of GDP due to Covid i.e. the US suffered a 10% drop from peak to trough in GDP, about $2 trillion's worth but has printed $5 trillion in response to which is about 25% of GDP!
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Wednesday, June 16, 2021
The Federal Reserve and Inflation / Economics / Inflation
By: John_Handbury
The Federal Reserve a$$holes puckered up when the April CPI/PPI figures came in, and probably puckered up even more when the May figures came in. These Fed nerds (who never got the girl/guy in high school), are dictating the monetary policy for the world. They are providing immense stimulation to the economy, yet have decided that any inflation arising from it is “transitory”. These stimuli include the following major impacts on supply and demand of goods that can lead to inflation of prices:
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Tuesday, June 15, 2021
Transitory Inflation Debate / Economics / Inflation
By: Michael_Pento
Inflation is running white-hot right now, and the reason is clear. It is because the Treasury poured $6 trillion into the economy between March of 2020 to March of 2021. That amounts to nearly $50,000 per US family in the name of pandemic relief. According to David Stockman, the government's largess was equal to 7.5 times the $800 billion of economic growth lost due to the various lockdowns and restrictions—both self-imposed or mandated. This time around the money wasn't just sent to Wall Street, as it was in the wake of the Great Financial Crisis of 2008. Covid-19 was a perfect excuse to deploy Modern Monetary Theory (MMT) directly to state and local governments, consumers, and businesses as well.
In other words, the government didn't just re-liquefy the banking system and then maybe hope consumers would receive some of the monetary crumbs as an ancillary consequence. The various virus-related rescue packages circumvented banks and pushed funds directly to the mass population. Paying people to lay fallow while at the same time giving them money to actually increase their consumption habits is a perfect recipe for rapidly rising Consumer Price Inflation. However, such a feat cannot be duplicated anytime soon without destroying the US dollar and the full faith and credit in our sovereign bond market.
Wednesday, June 02, 2021
Biden’s Alternate Inflation Universe / Economics / Inflation
By: Gary_Tanashian
As Biden Speaks, remember the economy is run by the Fed and it is run by inflation
Of course, a career politician will be adept at framing the narrative just right, adding to it, tweaking it and layering on fancy words and concepts in order to veil the true and unbelievably simple fact that the inflation started under a very different presidential administration and continues to this day. The only difference is that the party that won the election gets to take a bow for the broad results that have little or nothing to do with them.
Biden goes on offensive against economic critics, argues rising wages show his agenda is working
Well, his agenda was to push rising employment costs into the economy with the inflation the Fed created out of thin air. So that is true. I am not against raising minimum wages under this vile inflationary system because low income people cannot keep up with the pace of the inflation the Fed has created. Under an inflationary regime, an inflationary (Keynesian) system, you can’t go with the old conservative method of letting each earn his or her way based on merit. At some point – due to inflation – the goalpost has been moved too far away.
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Monday, May 31, 2021
Fed Offers No Holiday from Inflation / Economics / Inflation
By: MoneyMetals
Heading into Memorial Day weekend, American motorists will see the highest prices at the pump since 2014, according to AAA. Gas prices now average $3.04 a gallon nationally – reflecting a jump of more than $1.00 compared to the same time last year.
A rising gasoline price is just one of many emerging symptoms of a larger inflation problem:
- A lack of housing inventory, low interest rates, and surging costs for building materials are pushing home prices through the roof.
- Billionaire Warren Buffett recently complained that he is seeing significant inflation pressures throughout the supply chains of businesses he owns.
- Beef is becoming increasingly unaffordable for many grocery shoppers, and rising food costs are forcing already beleaguered restaurants to hike menu prices.
Thursday, May 27, 2021
The Shifting US Economy: AI and Automation Lead the Way / Economics / AI
By: Submissions
The Biden administration is 125 days old, and things certainly feel different. What strategies are you employing to take advantage of the shift?
Things often change temporarily before reverting to a mean. Just like market instruments, changing political ideals can, do, and will change, before ultimately reverting back to a mean, or an average state.
Labor force configurations have changed drastically, partially due to the pandemic. What was once everyone’s dream “to work from home”, went from a wish to a potentially harsh reality and has stayed there for many people.
Thursday, May 27, 2021
Are US Inflation Fears Destabilising the Global Markets? / Economics / Inflation
By: Sumeet_Manhas
The US dollar has enjoyed renewed highs of late, with this trend at least partially the result of forex positioning and a pronounced increase in net short positions as investors brace themselves for a depreciation in the value of the greenback.
However, this also betrays rising rates of US inflation, which recently peaked at 2.6% and pushed the dollar even higher against both the pound and the Euro.
But are rising inflation fears beginning to destabilise the global markets, and what does this tell us about the influence of inflation on stocks and shares throughout the world?
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Wednesday, May 26, 2021
Inflation Easing, Now What? / Economics / Inflation
By: Monica_Kingsley
S&P 500 refused to keep early gains, and reversed back into no man‘s land – on little convincing volume. For now, we remain chopping below my 4,180s level, conquering which on a closing basis would a bullish achievement. Until that happens on convincing internals, fake moves in both directions would remain with us.
The Fed telegraphing the talk about talking taper is a first step in preparing the markets not to get surprised by the actual deed, but how far is that one really? Stocks, bonds and currencies aren‘t reacting much – it‘s only commodities that are in consolidation mode, but this can be chalked down to inflation expectations calming down over the prior three trading days. Until the Fed truly moves or makes its forward guidance as unequivocal as can be in this respect, the markets would be in a doubting attitude (or at a minimum, a wait and see one):
(…) The market simply isn‘t convinced the Fed is serious about taking on inflation through (gradual) removal of the punch bowl – or about shaping its forward guidance credibly this way (yet). Inflation expectations are cooling down a little, and the Treasury market is tracking them closely. But this doesn‘t mean that bonds are taking the central bank seriously – this move is part and parcel of the transitory vs. getting (practically permanently unless a Fed game changer arrives – still unlikely) elevated inflation readings debate.
While I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.
Friday, May 21, 2021
How the Pandemic Is Changing the Labor Market / Economics / Employment
By: Patrick_Watson
When it comes to the US jobs situation, the “One of these things is not like the others” song from Sesame Street comes to mind.We have two competing narratives. Official data says millions are unemployed and seeking work. At the same time, businesses say they can’t find enough workers.
A skills mismatch between the workers who need jobs and the job openings themselves isn’t unusual. But many of today’s available jobs don’t require advanced education.
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Friday, May 21, 2021
Inflation Bunker Mentality: 'Striking' Similarities Between Now and the Inflationary 1970s / Economics / Inflation
By: The_Gold_Report
Sector expert Michael Ballanger examines the parallels between the present and the inflationary years of the mid-1970s, and also comments on how gold markets are responding.
For many of those following the writings of this "dithering old fool," who continues to hold an unfailing conviction in the strategic importance of gold and silver ownership in an otherwise out-of-control fiscal and monetary world, let me tell you a story about the 1970s.
I arrived in Saint Louis, Missouri, in the late summer of 1972, at the start of a magical four-year career as a student athlete at one of the top undergraduate business schools in the country. Populated largely by Jesuit educators, it also had many non-Jesuit professors in the twilight of their business careers that bestowed impressive anecdotes upon the collective psyches of the student population. In fact, it was a wonderful, coffee-sipping, Camel non-filter-chain-smoking finance professor who stood in front of the class in old De Smet Hall one morning, tripping the light fantastic about the implications of Richard Nixon abandoning the gold standard the year before and how it was going to cause massive inflation.
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Sunday, May 16, 2021
Inflation Going Stag / Economics / Stagflation
By: Gary_Tanashian
Stagflation in the offing, unless it’s not different this time…
As corporations continue to raise wages, market participants fear the Fed is wrong about supposedly “transitory” inflation, long-term Treasury bond yields resume the rally (bonds decline) manufacturers’ (ISM) costs keep rising, the Fed’s inflationary operation – a desperate monetary kick save if ever there was one – labors on.
The Fed has manipulated bonds and flooded the markets and the economy with funny munny created out of nowhere, as if by magic. As if by MMT (modern monetary theory) TMM (total market manipulation). So far, so good. Jerome Powell stands to be the first non-Bernanke winner of the Ben Bernanke Award for Heroism in the line of inflating a debt ridden economy.
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Thursday, May 13, 2021
Peak Growth and Inflation / Economics / Inflation
By: Michael_Pento
The rates of growth and inflation are now surging in the U.S., but that shouldn't be a surprise to anyone. What else would you expect when the Federal government has sent $6 trillion dollars in helicopter money to state and local governments, businesses, and individuals over the past year. Then, at the same time, millions of homeowners are told they don't have to pay their mortgages. In addition, our central bank has printed trillions of dollars to push asset prices through record-high valuations and continues to create $120 billion each month in order to keep Wall Street happy.All the above is happening while the economy opens up due to the dissemination of COVID-19 vaccines. The markets have anticipated this economic boom and have now nearly fully priced it all in. For instance, home prices have soared by 12% year over year in February, which was the fastest increase in the past seven years. And, the total market cap of equities is now over 200% of GDP—about twice the level reached at the start of the Great Recession.
But that rate of change in growth and inflation will be peaking in the next two months. I'll explain why that is and what that means for investors?
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Thursday, May 06, 2021
Vaccine Economic Boom and Bust / Economics / US Economy
By: Stephen_McBride
By the numbers, the US looks much better than it did than a few months ago. Jobless claims dropped to their lowest levels of the pandemic; COVID-19 vaccine shots went into arms at a record rate.But we’ve seen how this goes. The virus spreads in waves that recede and then return, often stronger. Some areas of the US are experiencing their fourth wave of coronavirus cases.
Vaccinations are supposed to break this cycle. And maybe they will. Unfortunately, that looks less likely as vaccine demand shows signs of peaking.
That means some establishments have, or will soon, close their doors … to mass vaccinations.
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Wednesday, May 05, 2021
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley / Economics / Protectionism
By: Dan_Steinbock
In 2021, China’s economic momentum will drive global economic prospects. But new trade wars could derail global recovery, again.In the 1st quarter of the ongoing year, China’s GDP rose to a record 18.3% year-on-year. Despite the base effect, due to the pandemic plunge a year ago, the performance reflects strong momentum. In April, China’s economy continued to boom, with strong exports and rising business confidence supporting the recovery.
U.S. economic growth accelerated in the 1st quarter, thanks to a rush of consumer spending. The GDP expanded at a 6.4% annualized rate; the second-largest since 2003. But it missed the estimates by 0.3 percent. Moreover, it was fueled by two rounds of huge stimulus payments, ultra-low interest rates and historical debt-taking.
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Monday, May 03, 2021
MMT: Medieval Monetary Theory / Economics / Economic Theory
By: The_Gold_Report
Peter Krauth of Gold Resource Investor provides his take on MMT and explains why he believes its effects will drive precious metals and commodities much higher.
Modern Monetary Theory or MMT, as it's better known, is a recurring theme that's not likely to go away. However, there's nothing modern about it, it's not about money (it's about currency), and it's no longer a theory.
We've certainly not heard much about it in mainstream economics or investment publications. But I do think it's gaining traction.
In my view, MMT is a very big deal because of its massive implications to our economic future. And so, I think it's worthwhile having at least a basic understanding of the concept.
In fact, if you're reading this, odds are good you've at least heard of MMT and you may have some idea of what it's about. If that's the case, you probably understand better than most the importance of investing in hard assets that can't be inflated at the whim of central planners.
And right now, the two most undervalued hard assets remain gold and silver.
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Sunday, May 02, 2021
Inflation or Deflation? (Not a silly question…) / Economics / Deflation
By: EWI
Dear reader,
The question in the subject line of this email is not an idle one.
It has everything to do with how you should position your portfolio for in the months -- and maybe even years -- ahead.
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Tuesday, April 27, 2021
Biden’s Green New Deal / Economics / Renewable Energy
By: Richard_Mills
Joe Biden came to power as the 46th US president expecting to spend more on green energy and clean technology. Just how much more is starting to be revealed.
Doubles down on emissions
This week Biden fulfilled a campaign promise in convening a “global climate summit” within his first 100 days in office. The two-day virtual meeting, attended by the leaders of a number of US allies and two of its adversaries — China and Russia — appears like many of these gatherings to be mostly a talking shop.
But a decision on Thursday is substantive, and therefore bears examination. The president committed the US to reducing its greenhouse gas emissions by 50 to 52% below its 2005 emissions levels by 2030, without revealing any details as to how this would be achieved.
The announcement also brings GHG reduction targets 20 years forward from what is set out in Biden’s $2.3 trillion infrastructure/ clean energy proposal unveiled in March. That plan commits to net-zero emissions by 2050 (net-zero refers to balancing the amount of emitted greenhouse gases with the equivalent emissions that are either offset or sequestered).
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Saturday, April 24, 2021
No Fear Of Inflation; Threat Of Deflation / Economics / Deflation
By: Kelsey_Williams
The Fed wants to have their cake and eat it too, but the cake is stale. Jerome Powell’s remarks in testimony before the Senate recently provoked considerable attention.
Responses, interpretation, and analysis by observers were many and varied. Unfortunately, no one learned anything different from what they thought they knew before Powell’s testimony.
The Fed is well aware of the problem. It is systemic in nature and goes far beyond corporate due diligence, bank liquidity, and the safety of your broker.
Most everyone else (with the exception of Janet Yellen, Ben Bernanke, and Alan Greenspan) thinks they understand the problem, but their limited understanding doesn’t allow for the subtleties of Fed Chair behavior.
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