Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Saturday, April 04, 2020
Bracing for Europe’s Coronavirus Contractionand Debt Crisis / Economics / Pandemic
By: Dan_Steinbock
Since inadequate preparedness prevailed in Europe until recently, the consequent pandemic will cast a prolonged, dark shadow over the regionwide economy – starting with the contraction, followed by the debt crisis.
Around the world, the early economic defense against the economic impact of the novel coronavirus has been by the major central banks to cut down the rates, inject liquidity and re-start major asset purchases.
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Thursday, April 02, 2020
Could the US Become Another Weimar Republic? / Economics / HyperInflation
By: The_Gold_Report
Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, discuss the potential ramifications of current U.S. fiscal and monetary policy.
The U.S. monetary and fiscal authorities are shoveling trillions of dollars into the U.S. economy to prevent a collapse of the economy and the financial system. Will this money be repaid or otherwise withdrawn from the system? If not, what consequences can we anticipate? We know under TARP the loans and preference share funding provided to various companies in 2008/9 was largely repaid. We expect most large companies will repay the loans they receive this time also, but the terms will be very easy and they will be made easier if needed. Money for state governments, hospitals and other emergency health-related expenditures is not coming back. Most of the money to smaller companies will likely be in the form of grants if they keep employees on salary. Money directly to individuals will not be repaid.
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Saturday, March 28, 2020
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do / Economics / Coronavirus Depression
By: John_Mauldin
In the aftermath of the coronavirus, we face the strong possibility of a deflationary depression. We cannot allow that to happen.
This is going to mean significant amounts of government debt, and much of it will have to be monetized by the Federal Reserve. I fully get that means risking an inflationary episode as a result.
In order to get inflation, there has to be a big rise in demand along with a jump in the money supply.
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Saturday, March 28, 2020
The Last Minsky Financial Snowflake Has Fallen – What Now? / Economics / Coronavirus Depression
By: Raymond_Matison
For more than a decade financial markets had been in denial of economic reality – as long as the Federal Reserve continued supporting bubbles. Numerous money managers and financial pundits cautioned investors in vain, as their warnings did not result in a market meltdown – until now.
An economist of the last century, Hyman Minsky, had likened the economy and stock market to a mountainside which is slowly accumulating snow. That snow appears stable until one last snowflake falls and it starts an avalanche. In the last month we did not just get one financial snowflake, but a huge snowstorm in the form of the corona virus – and it, with the already overextended markets caused this real financial avalanche.
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Friday, March 27, 2020
What you need to know about the impact of inflation / Economics / Inflation
By: Submissions
When it comes to investment risks, one that investors seem to overlook is the risk that their money may not be able to grow enough to keep up with inflation. It can play a significant role in the protection of an investment and therefore, should be taken into account when evaluating the potential success of an investment.
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Thursday, March 26, 2020
We Are Facing a Depression, Not a Recession / Economics / Economic Depression
By: John_Mauldin
We are already seeing large increases in request for unemployment insurance. It is going to explode. Let’s look at this data from Homebase.
A stunning 39% drop in the number of hourly employees going to work in the U.S. just in the 10 days ended Friday, March 20.
Is there anybody who thinks that’s not going to increase?
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Friday, March 20, 2020
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis / Economics / Coronavirus Depression
By: Dan_Steinbock
Despite China’s success in containment, the novel coronavirus is exploding outside China, due to complacency and inadequate preparedness. The impending contraction will compound human risks and economic damage.Although the epicenter of the outbreak is now Europe, only a few major economies have launched effective battles against the virus. Hence, the rising levels of imported cases in the borders of China and the rest of Asia.
Since complacency and inadequate preparedness prevailed outside China until recently, the consequent global pandemic casts a dark shadow over the global economy. It, too, shall pass, but only with effective global cooperation.
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Friday, March 20, 2020
Why a Second Depression is Possible but Not Likely / Economics / Economic Depression
By: Submissions
Almost everyone who deals in stocks and shares possesses at least a cursory knowledge of the 1929 stock market crash and subsequent Great Depression that crippled the US and sent economic shock waves across the entire globe. With markets tanking on fears of an extraordinarily serious coronavirus event, some are asking if the late 1920s and early 30s could repeat themselves in short order.
The short answer is this: while a second depression is entirely possible, it is not very likely. There are several systemic differences in the financial systems of 1929 and 2020. Moreover, the Great Depression cannot be blamed entirely on the stark market crash. The crash was but a symptom of a much bigger problem. It was also just one factor that went into creating what was arguably the largest financial crisis in modern history.
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Thursday, March 19, 2020
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 / Economics / Global Economy
By: Chris_Vermeulen
In this section of this multi-part research article related to the potential economic destruction of the Covid-19 virus event across the global markets (Part I, Part II).
We’re going to peer into data related to the GDP and other factors of the US economy. Remember, the US economy is the largest single economy and consumption component in the world. As we suggested in our earlier research, the US and China (combined) account for about 30% of the total global GDP each year. The top 12+ GDP nations on the planet account for just under 80% of the total annual GDP for the globe. What happens if economic activity and global GDP collapse for the next 24+ months because of the Covid-19 virus?
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Thursday, March 19, 2020
Coronavirus Impact on Global Economic GDP Numbers / Economics / Global Economy
By: Chris_Vermeulen
Continuing our earlier multi-part research post related to our extensive number crunching and predictive modeling systems expectations going forward many years, (Part I) this second part will highlight some existing data points and start to discuss the concepts of what the Covid-19 virus event may do to the immediate global economy. Remember, in the first part of this article, we shared research related to the US Fed Funds Rate (FFR) and how the Covid-19 virus event may create an environment of economic malaise over the next 12 to 24+ months as well as potentially disrupt the population and deficits over a 5+ year span.
This type of event is very similar to war (think WWII) in the sense that consumer spending changes, population growth, and levels change, GDP changes and deficits change for all involved. Our researchers modeled the GDP levels from 2017 will now with the intent of attempting to identify probable outcomes of GDP output throughout the world over the next 5+ years. Throughout these types of events, a massive capital shift takes place where consumers within areas impacted by war shift their spending and purchasing habits to address the immediate real needs of their attempted survival. Speculation vanishes. People only spend on things they are confident they can afford to risk their money on. Anyone who is able to take advantage of the displaced or disparaged has a real opportunity to create some real gains if they don’t become the next displaced or disparaged individual.
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Monday, March 16, 2020
Economic Stimulus Can’t Save US from Deflation and Recession / Economics / Recession 2020
By: Richard_Mills
One of the worst weeks on Wall Street mercifully ended on Friday.
S&P 500
DJIA
Nasdaq
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Sunday, March 08, 2020
Iran Is Not Hyperinflating / Economics / HyperInflation
By: Steve_H_Hanke
Each and every day we read that Iran is hyperinflating or about to hyperinflate. The same is written about Zimbabwe and Venezuela, as well as a potpourri of other countries that are experiencing inflation flare-ups. While Iran came close to hyperinflating in the fall of 2012, it has never experienced an episode of hyperinflation. And while Zimbabwe experienced episodes of hyperinflation in 2007–08 and in 2017, it is not experiencing one now. At present, Venezuela is the only country experiencing hyperinflation.
It’s clear that journalists and those they interview tend to play fast and loose with the word “hyperinflation.” To clean up the hyperinflation landscape, we must define the word. So, just what is the definition of the oft-misused word “hyperinflation?” The convention adopted in the scientific literature is to classify an inflation as a hyperinflation if the monthly inflation rate exceeds 50 percent. This definition was adopted in 1956, after Phillip Cagan published his seminal analysis of hyperinflation, which appeared in a book edited by Milton Friedman, Studies in the Quantity Theory of Money.
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Saturday, February 29, 2020
The Greatest Economic Depression Just Began. This Is No Drill / Economics / Great Depression II
By: The_Gold_Report
Bob Moriarty of 321gold rings the alarm bells on the fallout from the coronavirus. Exactly a month ago I warned that the coronavirus outbreak was going to pop the "Everything Bubble." I did something fairly subtle. I buried my main message under a whole heap of cow manure. It doesn't make a rat's ass if I was right or wrong about calling for a market crash in October or the Fed dumping piles of new crisp $100 bills onto a bonfire in September.
This time I'm going to put my message right at the top so no one can miss it. I quote from the January 27th piece, "This has the potential for being the biggest mass casualty event in world history. At the very least it will take down the financial system as the world economy grinds to a halt with efforts to contain the virus."
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Sunday, February 09, 2020
The End of the Global Economy / Economics / Global Economy
By: Richard_Mills
The Trump administration has just granted its Commerce Department sweeping powers to slap tariffs on countries it decides are manipulating their currencies to the detriment of the United States and its exporting companies.
For some this will come as news; at AOTH, it is confirmation that our earlier warning, reported here, has come true.
In our article ‘US prepares for currency war’, we warned readers about these new powers when they were first proposed by the US government several months ago, amid its trade war with China.
The Commerce Department now says it will proceed with the plan, which gives Commerce a wide scope of power to decide whether or not a country is under-cutting US exporters by keeping its currency artificially low. Whereas Commerce normally follows the advice of the Treasury Department - which issues a twice-yearly report to Congress on suspected currency manipulators - on whether to impose trade sanctions, the new rules allow Commerce to slap duties on goods from accused countries and individual businesses, even in cases where the Treasury did not find them to be guilty of currency manipulation. Bloomberg neatly explains what broadening the Commerce Department’s mandate to impose anti-subsidy duties could mean:
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Saturday, February 08, 2020
The Historical Impact of Recessions on Gambling Activity / Economics / Gambling
By: Submissions
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Friday, January 03, 2020
Where the World Is Going in 2020 / Economics / Global Economy
By: Patrick_Watson
We all want to know the future. Unfortunately, the future isn’t talking. It’s just coming, like it or not.We can, however, make educated forecasts. I think John Mauldin is broadly correct: the future is bright, but we’ll go through darkness first.
In fact, many of us are already in pretty dark situations, “left behind” in a supposedly thriving economy. We’re told there is no inflation even as the real cost of living rises ever higher.
Where is it leading us? To answer that, we have to think about how we got here.
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Saturday, December 28, 2019
Hacking The Economy To Determine An Election: Is It Happening? / Economics / Economic Theory
By: Dan_Amerman
On August 27th, 2019, in an editorial published in Bloomberg, William Dudley, the former president of the Federal Reserve Bank Of New York, did what had previously been considered unthinkable. The foundation premise of the Federal Reserve is that it is supposed to be completely nonpartisan, insulated from all political considerations. However, Dudley wrote that Donald Trump was a threat to the Federal Reserve and the nation, and urged Fed officials to make decisions that would take into account the need to keep Trump from being reelected.
The freezing up of the repurchase agreement (repo) market had nearly collapsed the U.S. financial system as one part of the financial crisis of 2008, however, the market had enjoyed 11 years of relative calm since then. Three weeks after Dudley's editorial, during the week of September 16th, 2019, the repo market returned to crisis mode and was likely saved only by emergency interventions on the part of the Federal Reserve. A contributing factor was some major mistakes that were made by career officials at the New York Fed - Dudley's former staff.
If the current related crises in the repurchase agreement market and with the funding of the national debt continue and get worse (which is far from certain at this time), crossing over into the wider markets, interest rates and the economy, it could become one of the defining political events of our lifetimes.
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Monday, December 23, 2019
The Fed Celebrates While Americans Drown in Financial Despair / Economics / Inflation
By: John_Mauldin
The Federal Reserve System is supposed to be independent. But it’s not. And as much as Donald Trump doesn’t like it, the Fed shouldn’t follow the president’s orders.
The Fed operates under a legal mandate from Congress. Its monetary policy role is “to promote maximum employment, stable prices and moderate long-term interest rates.”
So how is it doing?
Long-term rates are certainly moderate. Employment is historically high, though wages and job quality aren’t always great.
As for that “stable prices” part… it depends on what you are buying.
Thursday, December 19, 2019
US Fed Wooing Inflation / Economics / Inflation
By: Gary_Tanashian
The Continuum (the systematic downtrend in long-term Treasury yields) has for decades given the Fed the green light on inflation. Sometimes it runs hot (as per the red arrows) and sometimes it runs cold. One year ago people were confused about why a declining stock market was not influencing Fed chief Powell to reverse his relatively hawkish tone.
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Thursday, December 19, 2019
What to Expect in Our Next Recession/Depression? / Economics / Great Depression II
By: Raymond_Matison
Over the last several years numerous highly respected money managers and other economic writers have been warning investors about a coming recession or depression. However, few have been willing to describe as to what we may actually experience going through such an economic period.
Of course it seems a daunting task to foresee the future. To predict how technology may change our lives years from now is admittedly impossible, because such change seems to be taking place at an exponential rate, and we have little past experience as to how modern technology changes society, life style, or culture in a reliable way. Projecting how we might live ten years in the future from an economic perspective is not that challenging – particularly since this rate of change is relatively slow and such events have been experienced in numerous countries over hundreds of years. As a result, it is not impossible or even particularly difficult to foresee many of the important changes that we could expect to see from the onset of the next recession/depression.
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