Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Wednesday, May 12, 2010
U.S. Budget Deficit and Debt Landmines Dead Ahead! / Economics / US Debt
By Chris Wood, Jake Weber, and Vedran Vuk, The Casey Report write: Hearing President Obama’s economic peptalks, you might be under the impression that the U.S. needs to keep spending for just a little while longer to stimulate the economy – but then will swear off big deficits.
Reinforcing the point, to address concerns stirred by a Congressional Budget Office (CBO) forecast that the U.S. government will accumulate total deficits in excess of $6 trillion over the next decade, in February President Obama issued an executive order to create a bipartisan fiscal commission. The commission’s task is to deliver recommendations to the president by December 1 for limiting future deficits to 3% of GDP. (The FY 2009 deficit approached 10% of GDP. The FY 2010 deficit will probably go even higher.)
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Wednesday, May 12, 2010
European Bailout A Typical Response To An Atypical Debt Crisis Problem / Economics / Euro-Zone
The past two months have seen a fairly typical - if dramatic - example of the European Union response to a policy dilemma. First comes an extended period of trying to avoid the problem, paying some lip-service to the issue but with each leader ultimately more focused on any domestic political dimension. Then comes a final deadline that forces the collective hand of the Union members, resulting is some last-minute deal-making to avert a (real or imagined) crisis. The result is also typical - a deal that both creates a shift in the parameters of the Union and leaves an awful lot of unfinished business swept under the carpet.
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Wednesday, May 12, 2010
Euro Zone Bailout is a Greek Tragedy in the Making / Economics / Global Debt Crisis
The recently approved eurozone bailout package, designed to buy more time for fiscally troubled nations such as Greece, Spain, and Portugal, is nothing short of a global Greek tragedy in the making. Of course, quite contrary to this, judging by the response of global stock markets, one would get the impression that happy times are around the corner. However, those of us who understand Austrian economics and believe in free markets and sound currencies can see one more nail driven into the coffin of paper fiat currencies such as the euro, US dollar, British pound, and Japanese yen.
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Wednesday, May 12, 2010
HyperInflation or HyperDeflation? The Quantity Theory of Money / Economics / Economic Theory
James Turk's article Hyperinflation Looms dated April 20, 2010, is based on Quantity Theory of Money (QTM). It draws an analogy between Weimar Germany of 1923 and the United States of 2010. Both precepts are invalid. As far as the QTM is concerned, it suffices to point to the very fact, admitted by Turk, that it is possible to have a shortage of money simultaneously with the overworking of the printing presses. Hyperinflation is not the same as the ultimate inflation of the money supply. It is the ultimate depreciation of the currency unit. The two concepts are far from being the same, QTM notwithstanding.
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Wednesday, May 12, 2010
E.U. Debt Bailout Delays the Inevitable Economic and Market Crash / Economics / Global Debt Crisis
It took absolutely nothing to bring the stock markets to their knees, but nearly $1 trillion to give them piece of mind. Yes, the European bailout may solve temporary woes, but in the end, it is nothing more than a temporary solution.
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Wednesday, May 12, 2010
Using the Same Economic Recipe means getting the Same Tragic Results / Economics / Global Debt Crisis
As we all watch from a distance, Greece is crumbling under the weight of its own spending and statist profligacy. It is important to highlight why Greece is where it is and what it means for the United States:
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Monday, May 10, 2010
Is the US Economy Recovering or Isn't It? / Economics / Economic Recovery
The Democrats' media pals are breathless with reports of a growing recovery. Only political bigots could possibly dispute the trend. As readers know, I tend to take a very strong historical perspective. Unlike physics or chemistry economics cannot perform laboratory-like experiments. However, the discipline does have a tremendous amount of historical evidence on which to draw. We should consider these events as economic case studies.
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Monday, May 10, 2010
April U.S. Jobs Report, Should We Be Upbeat on Unemployment? / Economics / US Economy
The April jobs report was described as "upbeat," with the reported 290,000 positive job gain the best in four years. "It clearly shows that this economic recovery can no longer be seen as a jobless one," said Bart van Ark, chief economist of research firm The Conference Board. "Companies apparently are finding they can't squeeze out any more output without adding workers."
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Saturday, May 08, 2010
Economic Green Shoots Taking Root in Labor Market for Sustained Recovery / Economics / Economic Recovery
Civilian Unemployment Rate: 9.9% in April vs. 9.7% in each of the first three months of the first quarter. The unemployment rate was 5.0% in December 2007 when the recession commenced. Cycle high for recession is 10.1% in October 2009 and the cycle low for the expansion that ended in December 2007 is 4.4% in March 2007. Payroll Employment: +290,000 in April vs. +230,000 in March, net gain of 121,000 jobs after revisions of payroll estimates for February and March. Private sector hourly earnings: $22.47 in April vs. $22.46 in March, 1.6% yoy increase, slightly lower than 1.7% gain of March.
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Friday, May 07, 2010
Will China's Bubble Implode and Bring the U.S. Down with It? / Economics / China Economy
It's the world's biggest and fastest-growing economic powerhouse, the subject of countless daily discussions and conjectures in the news media and an endless source of controversy, fear and confusion among investors, businessmen, politicians, bankers and bureaucrats. For those who follow the global economic outlook, it's probably the single-most important focus in trying to solve the global financial crisis. And answers to the questions surrounding this country's near-term future will undoubtedly have a momentous impact on your own financial future. It's also the subject of our commentary today: The China outlook.
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Friday, May 07, 2010
Atlantic Ocean No Barrier to Greece Debt Contagion / Economics / Global Debt Crisis
As the price tag for the EU/IMF bailout for Greece has steadily grown over the past several months and contagion within the euro-zone has commenced, US investors are beginning to realize that the widening European sovereign debt crisis may indeed have some significant implication on our side of the pond.
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Friday, May 07, 2010
Greek Debt Crisis Turns Deadly; Will Governments Act Before Economic Disaster Hits? / Economics / Global Debt Crisis
This week, the financial crisis in Greece turned deadly serious. No longer are investors just losing boatloads of money. People are starting to lose their lives!
The latest bout of chaos struck on Wednesday during a general strike. Everyone from air traffic controllers to teachers left their posts. Tens of thousands of protestors hit the streets, hurling rocks and Molotov cocktails. Three people reportedly died in a fire that struck an Athens bank branch.
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Friday, May 07, 2010
European Union Economic Crash, France and Germany In Trouble? / Economics / Global Debt Crisis
You know that Greece, Portugal and Spain are in trouble.
You probably know that the UK is threatened by the sovereign debt contagion.
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Friday, May 07, 2010
Economic Slash and Burn, Greeceās Deadly Austerity Measures / Economics / Economic Austerity
Binoy Kampmark writes: The Greek government, and its citizens, are feeling the economic pinch. A brutal reaction to protestors who fear the winding back of the country’s social system has stunned visitors and the public alike. A general strike has been in progress that has crippled schools, hospitals, airline flights and ferries. Protestors have swarmed around the central square in front of Parliament.
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Thursday, May 06, 2010
U.S. Anemic GDP Growth Rate Not Good Enough / Economics / US Economy
In normal times, a 3.2 percent GDP growth rate for the United States is good. In the 1980’s the U.S. suffered another severe recession. During that recovery, GDP grew at a 7 to a 9 percent rate for more than one year. A 3.2 percent GDP annual growth rate barely creates enough jobs to keep up with the expanding population. It does nothing for all those who lost their jobs and are looking for work. The U.S. unemployment rate is 9.7 percent and the underemployment rate, a more accurate measure of the true unemployment situation is running at the 16.5% level.
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Thursday, May 06, 2010
Many Looming Crises Right Now, Who is Not in Fiscal Disaster? / Economics / Global Debt Crisis
Following the great banking crisis of 2007/8 the world now is realizing that the old ways are gone forever. At least the world is getting closer to that realization. What follows is described by the appropriately chosen Chinese Proverb ‘May you live in interesting times.’ to their enemies.
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Thursday, May 06, 2010
The Four Stages of Economic Collapse / Economics / Global Debt Crisis
Are you still bullish?
As I write, the notion of a unified Europe is literally going up in smoke. Greece has yet to confirm a bailout (four months into this ridiculous comedy), Spain and Portugal have both been slapped with credit downgrades. These problems are hardly unique as the below chart reveals:
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Thursday, May 06, 2010
Greece Debt Default Would be Catastrophic For German Banks / Economics / Global Debt Crisis
Edward Harrison writes: Apparently, Germany is now planning to make loans for Greece not just for 2010, but for 2011 and 2012 as well. This is a sea change in German thinking and is having a positive effect on all markets, with spreads on Greek debt and Greek sovereign CDS both coming in. I believe this indicates Angela Merkel understands the gravity of the situation and the impact a Greek default would have on Germany.
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Thursday, May 06, 2010
IMF and Buffett Impressed by India and China / Economics / Asian Economies
The International Monetary Fund is an international organization that oversees the global financial situation of its 186 member countries. The IMF was formed with the goal of stabilizing international exchange rates and to provide financial assistance to countries that experience serious financial and economic difficulties with loans and other forms of financial aid.
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Thursday, May 06, 2010
Greece Spiraling Debt Contagion Fears Won't Derail Spain / Economics / Global Debt Crisis
Martin Hutchinson writes: It had a huge housing boom, and is now dealing with the fallout. It has a left-of-center government and a big budget deficit, but relatively low debt in relation to its gross domestic product (GDP). And it has a worrisome current account deficit.
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