Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Wednesday, May 01, 2013
Falling World Population And The New Economic Prosperity / Economics / Demographics
By: Andrew_McKillop
TWO PARADIGMS
The so-called Trente Glorieuse years (1948-1975) of fast economic growth, low annual budget deficits, almost zero unemployment, cheap oil, small or zero national trade deficits, innovation and liberty in the Western countries - was also a period of population growth. Ever since, political thinking confused this result - population growth - with its causes which included fast economic growth. Still today, nearly all western countries have "natalist" policies trying to grow the national population, despite the reality of slow or no economic growth, sky high unemployment, and all the diseconomies of high population.
Wednesday, May 01, 2013
Has Sequestration Saved the U.S. Economy? / Economics / US Economy
By: Money_Morning
Martin Hutchinson writes: There's a Jamaican saying, "the higher the monkey climbs up the tree, the more his butt is exposed."
The point being that the more we rise, the more vulnerable we become.
That has truly come to pass for a pair of superstars of the dismal science. And it could have a big impact on how successfully (or unsuccessfully) we can get the U.S. economy back on the rails.
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Wednesday, May 01, 2013
Why Eurozone Recession Is Important for America / Economics / Global Economy
By: InvestmentContrarian
George Soros knows a thing or two about making money from big bets. In 1992, Soros made a $10.00 short wager on the British pound and walked away with a billion dollars in profits.
Soros is now convinced Germany needs to rethink its strategy toward the sustainability of the eurozone and, in a draconian manner, believes the country should leave the euro.
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Wednesday, May 01, 2013
Debt, Economic Growth, and the Austerity Debate / Economics / Global Debt Crisis 2013
By: John_Mauldin
Two weeks ago I wrote about the current debate over the 2010 paper by Ken Rogoff and Carmen Reinhart (hereinafter referred to as RR) on the correlation between debt and GDP growth. I said that the most important part of their work, which is the construction of an enormous database on debt and financial crises over the last few hundred years, was to be found in their book This Time Is Different and elsewhere. And their fundamental conclusion: debt is not a problem until it becomes one. And then it reaches a critical mass and you have what they called the Bang! moment.
Tuesday, April 30, 2013
GDP Economic Growth Statistics Bag of Tricks / Economics / Economic Statistics
By: Michael_Pento
If you're not happy with the stumbling U.S. economy all you have to do is just wait a few more months. It seems the Bureau of Economic Analysis (BEA) will perform a little hocus pocus on the GDP numbers starting in July 2013. According to the Financial Times, U.S. GDP would become 3% bigger due to the new change in its growth calculations.
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Tuesday, April 30, 2013
America's Shadow Black Economy Doubles to $2 Trillion / Economics / US Economy
By: Money_Morning
David Zeiler writes: Doing what they can to survive in a dour job market, millions of Americans exist in an underground economy that has ballooned to $2 trillion annually.
By "underground economy," we're talking about all the business activity that is not reported to the government, which includes a growing number of people getting paid for their labor in cash.
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Tuesday, April 30, 2013
Paul Krugman - The Most Dangerous Man in the World / Economics / Economic Theory
By: Money_Morning
Keith Fitz-Gerald writes: When it comes to spending or saving, it's always a contentious debate.
But the risks are rarely as high as they are now for the U.S. and most major industrial nations. Such fundamental economic decisions will move a country forward (or backward) for decades, not months, and can't be undone quickly.
So let's choose the "winner" and "loser" of this debate carefully.
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Monday, April 29, 2013
Goodbye to Economic Austerity / Economics / Global Economy
By: Alasdair_Macleod
There is a new campaign to end austerity. First, the IMF lets it be known it has second thoughts about it; then we are told the threshold of 90% government debt to GDP which must not be crossed, set by Professors Reinhart & Rogoff, is based on an excel spread-sheet error. Lastly, Bill Gross of PIMCO, the largest bond fund in the world, tells us austerity is not working.
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Saturday, April 27, 2013
The Underground Economic Recovery, a Cashless Society? / Economics / US Economy
By: John_Mauldin
But Mousie, thou art [not alone], In proving foresight may be vain: The best-laid schemes o' mice an' men Gang aft agley, An' lea'e us nought but grief an' pain, For promis'd joy! Robert Burns, To a Mouse, on Turning Her Up in Her Nest with the Plough
It is a common trope in science fiction novels. Economic transactions are handled seamlessly with a wave of a card or a physically imbedded chip, and whatever the author imagines money to be is transferred, far removed from the archaic confines of ancient physical monies. If you Google "cashless society" you get about 600,000 references in under a second, and 20 pages into the references there are still articles on a future world where physical cash is no longer needed. Some see it as a sign of the "end times," some as a capitalist plot, some as a frightening vision of socialists and ever-bigger governments, and some as a logical step in the evolution of a technologically driven international commerce.
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Saturday, April 27, 2013
Copper Calls the Economic Recovery BS / Economics / Global Economy
By: Graham_Summers
For the last four years, the financial world has traded largely based on hope of more intervention from Central Banks.
That was and is the single driving factor of the markets. Good news was good news (it’s a recovery!) but bad news was even better (the Fed will have to print more money!) as far as stocks were concerned.
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Saturday, April 27, 2013
BEA U.S. Economy Grows by 2.5% Annualised in Q1 2013 / Economics / US Economy
By: CMI
In their first estimate of the US GDP for the first quarter of 2013, the Bureau of Economic Analysis (BEA) reported that the economy was growing at a 2.50% annualized rate, some 2.12% better than the 0.38% growth rate for the prior quarter.
Although the headline number itself indicates moderate mid-cycle growth, the details within the BEA's report cast at best a mixed message for the overall health of the economy. For example: although the overall contribution from consumer spending was up, it came mainly from spending on services (boosting the headline number by 1.46%, and principally spent on non-discretionary rents and utilities), with consumer spending for goods contributing to the headline number at a more modest 0.78% (down about -0.24% from the prior quarter). And although fixed investments were still contributing a positive 0.53% to the headline number, that was down over a full percent from the prior quarter. In fact, inventories swinging back to growth (after contracting during the prior quarter) arguably provided all of the quarter-to-quarter improvement in the headline growth rate.
Thursday, April 25, 2013
The Commanding Heights Of Keynesian Nonsense / Economics / Economic Theory
By: Andrew_McKillop
KRUGMAN'S BLUES
American singer Loudon Wainwright III has a song with this line: "I read the New York Times, it's where I get the news. Paul Krugman's on the op-ed page, that's where I get the blues".
Every era needs its gurus and sages, we are told. Keynes was in fact only an elite-approved guru right at the end of his life, but managed to do a lot of damage before quitting this world, leaving us the IMF as well as the already long-dead Bretton Woods agreement.
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Thursday, April 25, 2013
U.S. Economic Recovery Explained in One Simple Chart / Economics / Economic Recovery
By: Money_Morning
Ben Gersten writes: If you thought Americans were better off financially than a few years ago, the following chart shows that's not the case for most of us.
Instead, it looks like an economic recovery for the rich.
According to a new Pew Research Center study, the wealthiest 7% of Americans saw their net worth increase 28.2% from 2009-2011, while the net worth of the other 93% declined 4.3%.
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Thursday, April 25, 2013
Global Economy Still at Risk, Just Look at the Jobs Picture / Economics / Global Economy
By: InvestmentContrarian
George Leong writes: Consistent jobs growth remains an issue here in the U.S.
We also know that the lack of jobs is a worldwide problem that is only made worse by the world’s growing population and the stalling global economy.
The reasoning behind this worldwide jobs problem is simple.
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Wednesday, April 24, 2013
The Fed's Money Printing Flaw, Velocity and No Inflation / Economics / US Economy
By: John_Mauldin
Lacy Hunt and Van Hoisington launch into their first-quarter "Review and Outlook," this week's Outside the Box, with a statement that some may find eye-opening: "The Federal Reserve (Fed) is not, and has not been, 'printing money'…" But given the facts of life about how money is really created (and destroyed), they are of course right: it's all about the acceleration – or deceleration – in the M2 money supply.
But there are deeper currents here. For, as Van and Lacy say, "A review of post-war economic history would lead to a logical assumption that the money supply (M2) would respond upward to [the Fed's] massive infusion of reserves into the banking system. And yet, the Fed's 3.5x expansion of the monetary base over the past five years has only grown M2 by 35%, and year-over-year growth through March, 2013, was less than 7%. "In other words," say our authors, "there is no evidence that the massive security purchases by the Fed have resulted in a sustained acceleration in monetary growth; nor is there evidence that economic conditions have improved."
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Tuesday, April 23, 2013
The Economic Depression Is Deepening / Economics / Great Depression II
By: Bill_Bonner
Gold seemed to be stabilizing at the end of last week. Commodities remained weak. Steel has fallen 31% this year. Brent crude is off 17% since early February. And copper is down 15%.
Copper is the metal you need to make almost anything – houses, cars, electronics. When it goes down, it generally means the world economy is getting soft.
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Tuesday, April 23, 2013
What Do Economies Grow Into? / Economics / Economic Theory
By: Raul_I_Meijer
"The world’s leading economies acknowledged on Friday that 'further actions are required' to put the global economy on track for strong, stable and balanced growth.", writes the FT. The torture never stops. Not that we had expected it to just today.
Well, alright then, you can make a point that the biggest news in economics last week was the revelation of the errors in Rogoff and Reinhart's "debt over 90% is deadly" paper. Personally, I think what is still much bigger is the - renewed - revelation that actual policies executed by actual politicians have been based on that paper. Talk about poverty of ideas and imagination. But maybe that shouldn't be surprising. If anything's the core of economics it's such poverty. And that politicians in turn base their policies on that poverty is only fitting. As an old Buddhist adage says: If and when everyone is mindlessly stupid, will anyone notice?
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Tuesday, April 23, 2013
The Theory Of Deflation / Economics / Deflation
By: Andrew_McKillop
CLASSIC THEORIES
This holds that deficiency of aggregate demand leads to over-production and unemployment, further depressing demand, and deflating the economy. By aggregate demand, this means personal and business as well as State consumption spending, and aggregate investment expenditure.
Staying with classic theories, private investment is governed by the marginal efficiency of capital and the real rate of interest. Deflation will occur when investment declines, for three main reasons, which are low marginal efficiency of capital, low profitability of capital and high real rates of interest.
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Monday, April 22, 2013
Is China's Economic Miracle About to Burst Like a Bubble? / Economics / China Economy
By: Pravda
The bright Future of China is being predictably pushed back indefinitely. The GDP growth has slowed down. In the first quarter of 2013, the growth made up 7.7 percent, while China closed last year with the index 7.9 percent. Despite the fact that this growth may seem low for China, the consequences of the reduction already affect the world.
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Sunday, April 21, 2013
The Price of Employment is Wrong – and So is Krugman / Economics / Employment
By: William_Anderson
Every once in a while, Paul Krugman gives an object lesson in Keynesian economics and his M.O. generally is as follows:
- create a caricature of other points of view which is built on faulty assumptions and outright misrepresentations of the real position
- discredit that phony caricature
- claim victory