Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Sunday, December 23, 2012
Government Spending is Not Economic Growth: Real GDPP 2000–2011 / Economics / Economic Theory
By: Robert_Higgs
In the 1930s and 1940s, when the modern system of national income and product accounts (NIPA) was being developed, the scope of national product was a hotly debated issue. No issue stirred more debate than the question, Should government product be included in gross product? Simon Kuznets (Nobel laureate in economic sciences, 1971), the most important American contributor to the development of the accounts, had major reservations about including all government purchases in national product. Over the years, others have elaborated on these reasons and adduced others.
Sunday, December 23, 2012
Bernanke Loosens Up, Fundementally Misunderstands How Weath is Created / Economics / Economic Theory
By: Frank_Shostak
On Wednesday December 12, 2012 Fed policy makers announced that they will boost their main stimulus tool by adding $45 billion of monthly Treasury purchases to an existing program to buy $40 billion of mortgage debt a month.
This decision is likely to boost the Fed’s balance sheet from the present $2.86 trillion to $4 trillion by the end of next year. Policy makers also announced that an almost zero interest rate policy will stay intact as long as the unemployment rate is above 6.5% and the rate of inflation doesn’t exceed the 2.5% figure.
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Sunday, December 23, 2012
U.S. Miles Driven Economic Indicator Hits Another Post-Crisis Low / Economics / US Economy
By: PhilStockWorld
Courtesy of Doug Short.The Department of Transportation’s Federal Highway Commission has released the latest report on Traffic Volume Trends, data through October. Travel on all roads and streets changed by 0.3% (0.9 billion vehicle miles) for October 2012 as compared with October 2011. The 12-month moving average of miles driven increased only 0.51% from October a year ago (PDF report). And the civilian population-adjusted data (age 16-and-over) has set another post-financial crisis low.
Saturday, December 22, 2012
US Birth Rate Hits New Record Low, A Nation of Singles, Implications for the Future / Economics / Demographics
By: John_Mauldin
Today’s OTB is not directly about the economy or investment, but rather about a key demographic shift that will certainly have a major effect on both. I have a somewhat different take on the shift than our author, my very-long-time friend Gary D. Halbert (founder of ProFutures and former business partner from the ’90s); and I will be writing about this next year. There is a significant transformation going on in my thinking about how the political world in the US (and, I suspect, much of Europe as well) impacts the economy.
Saturday, December 22, 2012
Investor Inflation Protection, and Profit, from Political Numbers / Economics / Inflation
By: DeepCaster_LLC
As the miscreants in Washington negotiate solutions to the “fiscal-cliff” and debt-ceiling crises, trial balloons have been floated that agreement has been reached to use a new CPI measure—the C-CPI-U, which tends to understate inflation even more than the CPI-U—as way of deceptively reducing cost-of-living adjustments to Social Security, etc. Not too surprisingly, public reaction appears to be turning increasingly negative, as the concept gets broader exposure in the popular press.
Saturday, December 22, 2012
Republican Sellout Invites Stagflation / Economics / Stagflation
By: John_Browne
While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling. In exchange for this, it appears that the Republicans have simply done nothing to halt, or even curb, the dangerous federal spending trajectories or the current drift towards greater state control of the economy. President Obama has politically outmaneuvered the Republicans, even going as far as evoking the Newtown massacre as a reason for quickly concluding a deal. As a result, it is likely that the GOP will bear the blame for any breakdown in fiscal cliff negotiations. They could wear such an outcome as a badge of honor, but nothing indicates that they have the political courage to do so.
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Friday, December 21, 2012
How Will the Housing Market Affect the U.S. Economy in 2013? / Economics / US Economy
By: InvestmentContrarian
Sasha Cekerevac writes: One of the most important sectors of the economy is the housing market. The housing market is crucial for several reasons. First, the housing market employs a lot of people, both directly and indirectly. This includes the direct employment of people in the housing industry, such as tradesmen and homebuilders, and the indirect employment of people in related industries, such as the automakers that build pickup trucks to be used by tradesmen and homebuilders.
Friday, December 21, 2012
BEA Raises U.S. 3rd Quarter 2012 GDP Growth Estimate to 3.09% / Economics / US Economy
By: CMI
In their third (and "final") estimate of the US GDP for the third quarter of 2012 the Bureau of Economic Analysis (BEA) found that the economy was growing at a 3.09% annualized rate, an upward revision of +0.42% from the previously published estimate for that quarter and 1.83% better than the second quarter of 2012.
Thursday, December 20, 2012
Japan Big Bank QE, Weakening Yen to Inflate Economy and Stocks / Economics / Japan Economy
By: Gary_Dorsch
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. And not one man in a million will detect the theft,” John Maynard Keynes wrote in 1920.
On Dec 12th, a shadowy group of political lackeys, voted 11-1 to launch what’s popularly dubbed as “Infinity QE-4,” – the Federal Reserve’s most radical scheme ever, that’s designed to enable the US-government to continue borrowing as much as $1-trillion per year, for the next several years, if necessary, in order to finance the burgeoning US-welfare state. US-lawmakers are negotiating over the details of the so-called “fiscal cliff,” but are simply nibbling at the edges of $1-trillion budget deficits. Yet US-politicians from both sides of the isle, believe they can stave off significant tax hikes and spending cuts, without having to pay a penalty of sharply higher interest rates, which normally follows such fiscal recklessness.
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Thursday, December 20, 2012
End of the Debt Supercycle and a Coming Massive Devaluation of the Yen ... / Economics / Global Debt Crisis 2012
By: Mike_Shedlock
... Most Difficult Time to Invest; The Belief Bubble
Late last month, Kyle Bass, managing partner of Hayman Capital, shared his thoughts in a video at the University of Virginia Darden School of Business Investing Conference with Professor Ken Eades.
It is a fantastic interview that echoes many of the things I have been saying about Japan for quite some time.
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Thursday, December 20, 2012
The Coming China Economic Crisis / Economics / China Economy
By: Clif_Droke
When Bert Dohmen talks, smart investors listen.
In 2007 when most investment analysts and economists were downplaying the developing credit market troubles, Bert warned investors that the probability was very high that the troubles would escalate into full-blown crisis and would produce a crash of historic proportions. He chronicled the developing credit crisis in the pages of his newsletter and also published a book in early 2012 entitled, The Coming China Crisis, which provided his insightful views on the emerging crisis in depth.
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Thursday, December 20, 2012
Economic Signs That Deflation is Far From Over / Economics / Deflation
By: EWI
The federal government defines the Producer Price Index (PPI) as "the average change over time in the selling prices received by domestic producers for their output."
With help from the Federal Reserve's massive inflationary policies, the PPI has climbed even as the economy began to fall in 2008-09.
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Wednesday, December 19, 2012
Bank of England Inflation Fraud Holds Steady at CPI 2.7%, RPI 3%, and Real 3.9% / Economics / Inflation
By: Nadeem_Walayat
The mainstream press played its part in perpetuating the Government's debt / money printing arm's (Bank of England) continuing inflation fraud with matter of fact coverage of today's CPI inflation rate holding steady at 2.7%. The reality is that the Inflation fraud is at the very core of why the general population is continually forced to work ever harder and to accumulate ever greater amounts of debt (slavery) all to just stand still in terms of being able to cope with the real cost of living increases that are NOT reflected by official CPI.
Sunday, December 16, 2012
U.S. Boomer Demographics and the Unemployment Rate / Economics / Demographics
By: Mike_Shedlock
A week ago in Startling Look at Job Demographics by Age I posted the following chart made with data that I downloaded from the St. Louis Fed.
Saturday, December 15, 2012
What Inflation Means For You: Inside the Consumer Price Index CPI / Economics / Inflation
By: PhilStockWorld
Courtesy of Doug Short. The Fed justified a previous round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate” (full text). In effect, the Fed has been trying to increase inflation, operating at the macro level. But what does an increase in inflation mean at the micro level — specifically to your household?
Saturday, December 15, 2012
Fed Policy of Phony Economic Growth Will Destroy the U.S. Dollar / Economics / US Economy
By: Peter_Schiff
By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford. At his press conference this week, Fed Chairman Bernanke explained how the easiest policy stance in Fed history has just gotten that much easier. First it gave us zero interest rates, then QEs I and II, Operation Twist, and finally "unlimited" QE3.
Thursday, December 13, 2012
U.S. Economy, We Can Ignore Reality! / Economics / US Economy
By: DeviantInvestor
“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” Ayn Rand
With apologies to Ayn Rand, let’s explore some examples of ignoring reality.
We can ignore the (U.S. government) deficit, but we cannot ignore the consequences of ignoring the deficit. If the deficit increases each year, the total debt will soon be so out of control that it is unpayable. Oops, the United States is there now. The consequences that we cannot ignore are:
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Thursday, December 13, 2012
U.S. Unemployment, What if the BLS Labor Force Participation Rate Projections Are Wrong? / Economics / Unemployment
By: Mike_Shedlock
On Monday, my "question of the day" was What will the unemployment rate look like for the rest of the decade?
Click on the above link to see an interactive map that lets you select the rate of job growth up to January of 2020.
Wednesday, December 12, 2012
BlackRock's Fink: Very Bullish on US Economy 2013 / Economics / US Economy
By: Bloomberg
Larry Fink, CEO of BlackRock, guest hosted Bloomberg TV's "Market Makers" with Erik Schatzker and Stephanie Ruhle today. Fink said that he's "very bullish" on the United States and "our corporations are in fabulous shape with $1.7 trillion in cash...I don't believe you're going to see that much default risk in the next few years."
Fink also said that "95% of the people that are talking about [the fiscal cliff] have no clue" and "I think we will find a solution."
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Tuesday, December 11, 2012
Global Employment Condition Gives Central Banks More Ammo / Economics / Employment
By: Michael_Pento
The prevailing wisdom currently on Wall Street is that gold and commodity stocks will go nowhere next year because interest rates are about to rise in real terms. For instance, last week Goldman Sachs cut its 12-month gold-price forecast by 7.2%. The precious metal "is near an inflection point," according to the firm. And while the metal may rally slightly in 2013, a growing U.S. economy and a gradual rise in real interest rates may send investors towards other investments, their analysts said.