Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, April 22, 2021
China's record first quarter fuels strong expansion in 2021 / Economics / China Economy
By: Dan_Steinbock
China’s 1st quarter record performance will accelerate momentum in China and support recovery in the US and global economic prospects – as long as unwarranted geopolitical tensions remain in check.A year ago, China’s first quarter plunge was -6.8 percent, due to the pandemic effect. In the West, it was widely seen as the “end of China's growth story.”
Instead, in early February 2020 I predicted a turnaround in the increase of new virus cases in China, with the beginning of the economic rebound in the second quarter. Following the 6.5 percent expansion in the fourth quarter of 2020, the GDP rose to a record 18.3 percent year-on-year in the past quarter.
Obviously, the performance benefited from the base effect, due to the pandemic plunge a year ago. Nonetheless, it reflects a strong impetus for normalization.
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Tuesday, April 20, 2021
Inflation: First the Gain, Then the Pain… / Economics / Inflation
By: MoneyMetals
Gold and silver markets are exhibiting more signs of breaking out into a rally.
On Thursday, bond yields pulled back sharply. That helped fuel a new record in the Dow Jones Industrials. But the precious metals sector was an outperformer on the day, with mining stocks leading gold prices to a fresh multi-week high.
With the exception of palladium, precious metals markets have lagged behind other asset classes in 2021. That may be in the process of changing here in the second quarter.
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Tuesday, April 13, 2021
Biggest Inflation Threat in 40 Years Looms over Markets / Economics / Inflation
By: MoneyMetals
William Watts with MarketWatch sees the “biggest Inflation scare in 40 years” on its way. He expects massive amounts of stimulus coupled with a boom associated with easing COVID restrictions to generate a surge in prices like the nation hasn’t seen since the late 1970s to early 1980s.
The signs say Watts may be right. Commodities, with the exception of closely managed gold and silver prices, have been screaming higher in recent months. Wheat, corn, lumber, copper, steel, and a host of other key inputs have all spiked higher.
The jump is already being felt in consumer goods and construction, but the bulk of the price hikes may still lie ahead.
Tuesday, April 06, 2021
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending / Economics / Inflation
By: MoneyMetals
Gold and silver markets sprung higher on Thursday as April and second quarter trading kicked off. After suffering losses in the first quarter, precious metals may now be due for a spring rally.
The U.S. Dollar Index was up slightly this week. Regardless of how the dollar fares against other fiat currencies, investors can expect massive depreciation ahead in real terms. There is no end in sight to the inflationary cycle of spending, borrowing, and printing in Washington.
This week, President Joe Biden promoted a so-called infrastructure package that comes in at more than $2 trillion. That’s on top of $1.9 trillion in bailouts and giveaways finalized last month.
Much of the proposed “infrastructure” spending has nothing to do with paving roads, building bridges, or expanding ports. These sorts of transportation upgrades are slated to only get $115 billion. Meanwhile, Biden would spend $174 billion on electric vehicle subsidies and hundreds of billions more on various “green” and racial leveling programs.
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Wednesday, March 31, 2021
INFLATION - Wage Slaves vs Gold Owners / Economics / Inflation
By: Richard_Mills
Inflation is the rate at which prices within a basket of goods or services (called the consumer price index or CPI) rise or fall. When a currency falls, the ability of that unit of money to purchase goods and services weakens, ie., it takes more units of currency to buy the same basket of goods as before it weakened. The more a currency falls, the less you can buy with it because its purchasing power decreases. We call this devaluation/ loss of purchasing power.
Casey Research founder Doug Casey believes we often put the cart before the horse when thinking about inflation. The renowned investor, author, and speaker states,
“Inflation” occurs when the creation of currency outruns the creation of real wealth it can bid for… It isn’t caused by price increases; rather, it causes price increases.
Inflation is not caused by the butcher, the baker, or the auto maker, although they usually get blamed. Inflation is the work of government alone since government alone controls the creation of currency.
Indeed, governments in fiat economies can literally print paper money “out of thin air,” something impossible to do with a gold-backed currency. When the United States and most of the world was on the gold standard, dollars could be converted to gold at the US Treasury’s “gold window” @ 1 oz=US$35. However, the US government was only allowed to create as much money as could be backed by the gold in its faults. (it is often said, “the Fed can’t print gold” (or silver).
When gold goes up or down it is not inherently losing value; what has changed is the value of paper money, the fiat dollar. When you buy gold to resist inflation, ie., rising prices that eat away your savings by reducing your purchasing power, it is called a hedge against inflation.
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Friday, March 19, 2021
What the "Sudden, Dramatic" Surge in Googling "Inflation" Tells You / Economics / Deflation
By: EWI
It likely "typifies the end of an old economic trend and the beginning of a new one"
In the news, you hear that the big monetary fear these days is the prospect for a jump in inflation.
Here are some headlines since the start of the year:
- Inflation Is Coming. That Might Even Be a Problem. (Bloomberg, Jan. 13)
- Inflation concerns put Biden, Fed on defensive (TheHill.com, Feb. 23)
- Stocks tumble as Powell signals inflation is ahead (CNN Business, March 5)
Tuesday, March 16, 2021
We Need Infrastructure Spending to Avoid Another Texas-Sized Mess / Economics / Infrastructure
By: John_Mauldin
I just talked with one of the most successful hedge fund managers in the country (in terms of returns over the last four years). He will not allow me to use his name. But I can tell you he is a raging bull.
He believes the stimulus that we already had plus what we will get—coupled with a major infrastructure bill, plus extraordinarily easy monetary policy, combined with significant new technology innovations—adds up to a new bull market.
This is someone with 5X returns over the last four years with a very diverse portfolio. So it could pay to pay attention.
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Sunday, March 14, 2021
Keys to US / Global Economic Recovery - Part 2 / Economics / Economic Stimulus
By: Chris_Vermeulen
This is a continuation of our extended technical review of what my research team and I believe will be required for the US/Global markets to enter a stronger post-COVID-19 recovery phase. If you missed Part I of this research series then you can find it here: www.thetechnicaltraders.com/....
In this Part II, we will look at how potential currency shifts will prompt new trending in various economic sectors. The past 20+ years have really changed how the markets operate from a standpoint of capital deployment and capital function. We certainly live in interesting times from a trader and investor perspective. There is more capital floating around the globe right now than ever before… and that changes certain things.
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Thursday, March 11, 2021
Biden Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery / Economics / US Economy
By: Chris_Vermeulen
At this point in our lives, we are hoping the new COVID-19 vaccines will do their part to help move the world towards more normal consumer and economic activities. The US Senate recently a new $1.9 Trillion stimulus package that should continue to provide assistance to various levels of consumer, state governments, and corporate enterprises. The next question in our mind is “what will the recovery look like if/when it happens?”. We need to look at three critical components of the global economy to help answer this question: Consumer Activity, Debt, and Supply/Demand Functions.
Consumer activity makes up more than 60% of the US GDP. It also drives money flow as consumers engage in economic activity, create credit for new purchases and help to balance the supply/demand equilibrium functioning properly. The participation of the consumer within an economy is essential for a healthy growing economy.
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Tuesday, March 09, 2021
Amid Uncertainty, China’s Quest for Bold Development / Economics / China Economy
By: Dan_Steinbock
At a historical moment of hope and uncertainty, China pledges bold economic development, despite global tensions.
China’s annual “Two Sessions” meeting has approved national priorities for 2021. Delivered by Premier Li Keqiang, the Government Work Report set a growth target of over 6 percent for Chinese economy for 2021, releasing a numeric goal after it was skipped in 2020, due to the COVID-19 pandemic.
China plans to create more than 11 million new jobs in 2021, while keeping inflation rate (CPI) at 3 percent and cutting the deficit-to-GDP ratio to 3.2 percent. The goal is to increase annual R&D spending by more than 7 percent in the next five years, including foreign-funded R&D centers in China.
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Monday, March 08, 2021
US Economy, GDP, Unemployment, Inflation Impact on House Prices Trend 2021 / Economics / US Economy
By: Nadeem_Walayat
The US economy is recovering fast from the corona crash with annualised GDP down just 2.8% for Q3, a remarkable performance and far better than most western nations.
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Sunday, March 07, 2021
The Case for Inflation / Economics / Inflation
By: John_Mauldin
Former Treasury Secretary Larry Summers recently pointed out that overstimulation risk will far exceed the “output gap” shown in the latest Congressional Budget Office economic projections.
What is an output gap? Gross Domestic Product measures (or at least tries to) economic growth. Economists also calculate “potential GDP,” which is how much the economy could grow, if every available worker and other resource were fully employed.
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Saturday, March 06, 2021
US & UK Head for Post Coronavirus Pandemic Lockdown Inflationary Economic BOOM / Economics / Coronavirus 2021
By: Nadeem_Walayat
Starting Monday Britains final Coronavirus lockdown will start to come to an end, first with the opening of all of Britains schools and soon followed by outdoor sports facilities, then shops with the bulk of opening including Universities to resume teaching students after Easter so in about 2 months now, by Mid May we will be largely be living in post pandemic lockdown's world when we can all soon go on holiday at home and abroad with our vaccine passports which should mark the start of a 2 year economic boom, given pent up demand and £400 billion of money printing to date. Though with 5 million on furlough then despite the coming boom unemployment will increase as 5 million workers find out whether they still have a job or not.
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Thursday, March 04, 2021
Get Ready for Inflation Mega-trend to Surge 2021 / Economics / Inflation
By: Nadeem_Walayat
So the US looks set to approve stimulus spending of $1,9 trillion for the US economy during 2021, with economists singing it's praises of how basically you get a free lunch, one of huge deficit spending at zero interest rate and no inflation. Understand $1.9 trillion is 10% of the US Economy! This for an economy that has already recovered from the covid depression and was destined to grow by about 3% in 2021. So what happens when one throws 10% of GDP at an economy that is growing by 3% per annum. No you don't get GDP growth of 13% per annum, yes it will boost US GDP for 2021 but not by 10%, perhaps by another 3%, so where does the other 7% or $1.5 trillion go? Into HIGHER PRICES, INFLATION! Some of which may be reflected in the official inflation indices.
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Wednesday, March 03, 2021
Gold To Monetary Base Ratio Says No Hyperinflation / Economics / HyperInflation
By: Kelsey_Williams
A fundamental tenet regarding money and inflation is that ongoing money creation by governments and central banks (Federal Reserve) cheapens the value of all money (US dollars) in circulation and leads to a loss of purchasing power. The loss in purchasing power shows up in the form of higher prices for all goods and services.
As long as the amount of money that is created is somewhat moderate and regular, then the effects are presumed to be moderate, as well. Hence, we experience increases in the cost of living on an ongoing basis, but in incremental amounts of maybe two or three percent each year.
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Wednesday, March 03, 2021
The Case Against Inflation / Economics / Inflation
By: John_Mauldin
For inflation to be a near-term threat, five things would have to happen this year:
- Vaccines and other measures bring the pandemic under control this summer in the US and other developed countries.
- Consumers use relief dollars, savings, and/or borrowing to quickly increase their spending on discretionary goods and services.
- This spending is large enough to exceed post-pandemic production capacity and spark price increases.
- The Federal Reserve lets the economy “run hot” and maintains its low interest rates and asset purchases.
- Congress and the Biden administration leave the fiscal spigots open by not raising taxes or cutting spending.
All these are possible. Are they likely?
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Monday, February 22, 2021
Economics Is Why Vaccination Is So Hard / Economics / Coronavirus 2021
By: Patrick_Watson
When a house burns down, it affects more than just the owner, occupants, and even the neighbors.
Quick, efficient firefighting is a public good. Stopping contagious diseases is another public good. The public interest demands all fires—in all forms—be extinguished before they spread.
Now we have COVID-19 vaccines that, while imperfect, are generally safe and effective. We should deliver them with the same urgency with which we send fire trucks to every blaze.
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Tuesday, February 16, 2021
THE INFLATION MEGA-TREND QE4EVER! / Economics / Inflation
By: Nadeem_Walayat
US House Prices Real Estate Trend Forecast Review
Did the perma bears finally get their US house prices crash that they have been crowing so loudly for a decade now?
Firstly a recap of my existing US house prices trend forecast.
30th April 2019 - US House Prices Trend Forecast 2019 to 2021
Therefore my forecast conclusion is for a relatively weak continuation of the US housing bull market into late 2020 at a much shallower pace than experienced in recent years for a likely gain of just 3% over the next 2 years (Jan 2019 to Jan 2021) before entering into a downtrend going into 2021 i.e. Case Shiller 10 city Index (SPCS10RNSA ) rising from 225.9 (Jan 2019 data) to just 232.4 (Jan 2021 data) as illustrated by my trend forecast graph.
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Saturday, February 13, 2021
US-China Reset Key to Brighter Global Economic Prospects / Economics / Global Economy
By: Dan_Steinbock
After four years of US-Sino tensions, the Biden administration could speed up US recovery, while restoring bilateral trust with China. That would foster global economic prospects. The reverse would undermine those prospects.
In the United States, the third wave of the COVID-19 peaked with 250,000 confirmed cases daily after the holiday period. Following the catastrophic mishandling of the pandemic by the Trump administration, total cases are approaching 27 million and the 440,000 deaths exceed US military fatalities in World War II.
After effective containment, confirmed cases in China remain below 90,000. With the Spring Festival holidays just days away, recent resurgences have renewed concerns about outbreaks and people have been urged to avoid travels during holidays. Despite some unease, public-health authorities believe a major outbreak is unlikely.
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Friday, February 12, 2021
Bubblicious Asset Prices, Debt Dependency, Economic Collapse / Economics / Coronavirus Depression
By: Kelsey_Williams
The words bubbly and delicious might be more descriptively accurate when talking about champagne. However, it is not too difficult to imagine giddy salivation among the owners of Bitcoin, or Tesla stock.
And, while some might be more stringent in their terms of definition and applicability, investors in stocks, bonds, real estate, etc. – pretty much anything with a $ sign in front of it – might want to rethink the current state of affairs as it pertains to valuation of their financial assets.
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