Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Friday, April 20, 2012
Get Ready for 'Hot' Inflation / Economics / Inflation
Gregor Macdonald writes: Ideological deflationists and inflationists alike find themselves both facing the same problem. The former still carry the torch for a vicious deflationary juggernaut sure to overpower the actions of the mightiest central banks on the planet. The latter keep expecting not merely a strong inflation but a breakout of hyperinflation.
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Thursday, April 19, 2012
Mark-to-Market: From David Hume to Adam Smith…From Ludwig von Mises to Hiroshima / Economics / Economic Theory
From Daniel James Sanchez of the Mises Institute (somewhat condensed):
According to Ludwig von Mises, the notion of money as a measure of value is an artifact of the "classical economics" of Adam Smith, David Ricardo, and John Stuart Mill, who, by and large believed that value was an objective attribute of “goods”. Economic actors, according to classical theory, only exchanged goods if the respective values were equal.
Mises had another theory which he called the subjective-marginal-utility theory of value, where value is derived from utility and valuation is a matter of preferring one set of goods over another, according to the goods' respective utilities.
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Wednesday, April 18, 2012
Must Understand Issue – U.S. Unemployment! / Economics / Unemployment
Why Read This: Because it is important that when your read articles on Job Reports you understand what Structural Unemployment is, and what it means to economic growth.
Featured Article: An April 9 article by Joe Duarte discusses the April 6 U.S. Jobs Report in the context of Structural Unemployment. In his article, Duarte concludes:
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Tuesday, April 17, 2012
Falling Standard of Living for Average American's, Debt/Income/Productivity / Economics / US Debt
Lacy Hunt kicks things off with a bang in Hoisington's Quarterly Review and Outlook, this week's Outside the Box:
"The standard of living of the average American continues to fall."
The reason, in a word: debt. Lacy explains what happens:
"Efforts by fiscal and monetary authorities to sustain growth by further debt accumulation may produce some short-term benefit. Sadly, these interludes fade quickly as the debt becomes more destabilizing. The net result of increased indebtedness then becomes the opposite of what policymakers intend when they promote economic growth by either borrowing funds for increased government expenditures or encourage consumers to borrow with artificial and temporary incentives."
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Tuesday, April 17, 2012
Seniors Worried about the Debt They Are Passing on to Their Heirs? / Economics / Pensions & Retirement
I recently celebrated my 65th birthday, which allowed me to become eligible for Medicare. On May 1, I will begin collecting Social Security benefits. I was curious to see what has been happening to combined federal expenditures on Social Security and Medicare in relation to total federal expenditures excluding those for national defense. My curiosity was satisfied by the data in Chart 1.
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Tuesday, April 17, 2012
The Cyclical Macroeconomic Impact of Taxmageddon 2013 / Economics / Taxes
As you file your 2011 federal income taxes, you are being bombarded in the media with frightening talk about an impending Taxmageddon befalling us as we wake up on January 1, 2013. Of course, if some of the more apocalyptic predictions of the coming end on December 21, 2012, of the “Long Count” Mayan calendar come to pass, then we will not have to concern ourselves with Taxmageddon 2013. But assuming that most of us will be around for January 1, 2013, what is Taxmageddon all about and what will be its cyclical macroeconomic impact on the U.S. economy?
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Monday, April 16, 2012
Edgar the Entrepreneur Demonstrates Harm the Minimum-wage Inflicts on Workers / Economics / Economic Theory
Daniel James Sanchez writes: Edgar the Exploiter is a wonderful animated short by Tomasz Kaye that defends voluntary employer-employee relations and demonstrates the harm that policies like minimum-wage laws inflict on the very people they are supposed to help.
Edgar is a capitalist who hires Simon as an unskilled laborer, until a minimum-wage law impels Edgar to lay Simon off.
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Monday, April 16, 2012
Why Has the American Economic System Failed? / Economics / US Economy
"We always want to keep in mind what the function, the purpose, of the economy is. The purpose of an economy is not producing GDP. It is increasing the welfare of citizens, and it is increasing the welfare of most citizens. And the American economic system has failed, and failed very badly. Most Americans today are worse off, most American households have lower real income adjusted for inflation than they had fifteen years ago."
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Sunday, April 15, 2012
March U.S. CPI Inflation Points Highlights Economic Risks / Economics / Inflation
Friday's release of the March consumer price index (CPI) highlights the risk facing the US economy as we have been discussing over the past few weeks. When the US exited the 2008 recession (using exited loosely) it was not final demand from consumers that initiated growth but rather government stimulus. Debt as is the case with most recoveries is what fuels the initial leg.
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Sunday, April 15, 2012
Spain in Debt Crisis War, Fighting to Stop Turning into a Black Economy / Economics / Eurozone Debt Crisis
I fully intended to ignore Spain this week. Really, truly I did. I had my letter all planned, but then a few notes drew my attention, and the more I reflected on them, the more I realized that the inflection point that I thought the ECB had pushed down the road for at least a year with their recent €1 trillion LTRO is now rushing toward us much faster than ECB President Draghi had in mind when he launched his massive funding operation.So, we simply must pay attention to what Spain has done this week – which, to my surprise, seems to have escaped the attention of the major media. What we will find may be considered a tipping point when the crisis is analyzed by some future historian. And then we'll get back to some additional details on the US employment situation, starting with a few rather shocking data points. What we'll see is that for most people in the US the employment level has not risen, even as overall employment is up by 2 million jobs since the end of the recession in 2009. And there are a few other interesting items. Are we really going to see 2 billion jobs disappear in the next 30 years?
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Friday, April 13, 2012
U.S. Jobless Claims, Wholesale Prices, and Trade Gap – Mixed Economic Message / Economics / US Economy
Initial jobless claims rose 13,000 to 380,000 during the week ended April 7, putting the four-week moving average back at 368,500 after posting readings below this level in the past two weeks. Continuing claims, which lag initial jobless by one week, fell 98,000 to 3.251 million. The soft payroll gains in March and the currently weekly gain in claims support the view that labor market conditions are improving only gradually.
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Tuesday, April 10, 2012
Economic Recovery - Who are We Kidding? / Economics / US Economy
The global economy is healing, so we are told. Yet, the moment the Federal Reserve (Fed) indicates just that - and thus implying no additional stimulus may be warranted - the markets appear to throw a tantrum. In the process, the U.S. dollar has enjoyed what may be a temporary lift. To make sense of the recent turmoil, let's look at the drivers of this "recovery" and potential implications for the U.S. dollar, gold, bonds and the stock market.
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Sunday, April 08, 2012
U.S. Job Creation Just Trying to Keep Up Wth Population Growth / Economics / Employment
Today's employment numbers were decidedly soft, but the unemployment rate went down anyway, and that is about the best you can say. And this being a holiday weekend, it provides us an opportunity to look deep into the employment numbers, while we put off thinking about Spain for at least a week. And who knew that being an unmarried Asian-American in the US was a risk for unemployment? Plus a few other interesting items will make for an interesting letter.
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Saturday, April 07, 2012
War Torn Iraq and Free Market Capitalism / Economics / Economic Theory
In the course of my deployments to Iraq I learned a great deal about economics, though I didn't realize it at the time. I hadn't yet been introduced to the Austrian School or a Rothbardian view of laissez-faire capitalism. Looking back, however, I can see quite clearly that in several important areas voluntary systems not only existed in that country but thrived.
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Saturday, April 07, 2012
Discouraged U.S. Workers NOT THE REASON for decline in March Unemployment Rate / Economics / Unemployment
Civilian Unemployment Rate: 8.2% in March, down one notch from February. Cycle high jobless rate for the recent recession is 10.0%, registered in October 2009.
Payroll Employment: +120,000 jobs in March vs. +240,000 in February. Private sector jobs increased 121,000 after a gain of 233,000 in February. A net gain of 4,000 jobs due to revisions of payroll estimates of January and February.
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Saturday, April 07, 2012
Learning to Think in Multiple Scales and U.S. Jobs Creation / Economics / Economic Theory
Most politicians, bureaucratic officials, business "leaders", mainstream academics and media pundits in the world are stuck in a single-scale mindset. They approach every problem and issue from the perspective of a human being looking out into an increasingly inter-dependent global society. They take the structures of extensive trade, multinational corporations, global regulatory institutions, international treaties, etc. as irreversible truths that are embedded into the very fabric of existence.
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Saturday, April 07, 2012
Eurozone, US, China, the Global Economy's Ups and Downs / Economics / Global Economy
The Business Times Singapore Investment Round TablePANELLISTS
Kenneth Courtis: Former vice-chairman, Goldman Sachs (Asia) and co-founder of Themes Investment Management
Ernest Kepper: President, Asia Strategic Investment Associates, Japan
Robert Lloyd-George: Chairman, Lloyd-George Investment Management, Hong Kong
William Thomson: Chairman of Private Capital, Hong Kong, director of Finavestment, London
Wednesday, April 04, 2012
Economic Depression and Deflation / Economics / Deflation
Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt). -- Conquer the Crash, 2nd edition (p. 88)
Has the United States met that precondition?
Well, consider that total credit market debt as a percent of U.S. gross domestic product was
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Tuesday, April 03, 2012
Crushing National Debts and Deficits, Economic Revolutions, and Extraordinary Popular Delusions / Economics / Technology
Professor Andrew Odlyzko leads off this week's Outside the Box with a familiar litany:
"A superpower with crippling debt, exorbitant taxes, glaring inequality, wages far exceeding those of competitors, high and persistent unemployment, lack of basic workplace skills, malnutrition, a rapidly growing rival across the ocean to the West, heated debates about the role of government in the economy, and widespread pessimism about the future."
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Tuesday, April 03, 2012
Three China Economic Trends to Watch for Global Investors / Economics / China Economy
Bloomberg announced over the weekend that China’s manufacturing grew at the fastest pace in a year. We follow the government’s Purchasing Managers’ Index (PMI) closely, as we believe it is a better indicator of China’s domestic demand than the HSBC PMI. Whereas HSBC PMI surveys 400 small and mid-sized companies, which are typically export-oriented, the government’s PMI surveys 820 mostly large, state-owned enterprises across 20 industries.Read full article... Read full article...