Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Wednesday, October 10, 2018
The Branded US Economy / Economics / US Economy
By: Peter_Schiff
Last week Donald Trump, in his own estimation, succeeded in replacing what he claimed to be the "worst trade deal in history" with what he claims was "the best trade deal in history." If true, this would not only make good on one of his central campaign promises, but it would be a genuinely significant development. In reality, the unveiling of the United States-Mexico-Canada (USMCA) trade deal is just the latest iteration of the President's talent for branding. As is the case in other aspects of the president's view of economic matters, the difference between then and now is almost purely semantic.
Tuesday, October 09, 2018
Inflation Target Regrets / Economics / Inflation
By: Michael_Pento
Beginning this fall, and continuing throughout 2019, the stock market’s performance should be vastly different from what has occurred during the prior few years. Indeed, the huge reconciliation of stock prices is arriving now.
The primary reason behind this is the watershed change in global central banks’ monetary policies. For years central banks had been keeping rates near 0%, or below, and at the same time printing over a hundred billion dollars’ worth of fiat currencies each and every month to purchase bonds and stocks. That is all changing now. According to Capital Economics, fourteen major global central banks are either in the process right now, or have indicated that they be will next year, in the process of raising interest rates. At the same time, QE on a global net basis will plunge from $180 billion per month at its peak during 2017, to $0 by December…and will then go negative in 2019.
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Tuesday, October 09, 2018
ECB Meeting Minutes and US Inflation Data in Focus / Economics / Inflation
By: Submissions
We don’t have a central bank meeting scheduled for this week, but we get the minutes of the latest ECB one. Following the upbeat remarks of President Draghi at the conference following that meeting, it will be interesting to see whether other ECB officials are on the same page. In the US, we have the CPIs for September. We get inflation data from Norway and Sweden as well.
Monday appears to be a quiet day in terms of economic releases. The only noteworthy data point we have on the calendar is German industrial production for August, which is expected to have rebounded 0.4% mom after sliding 1.1% in July.
On Tuesday, during the Asian morning, we get Australia’s NAB business survey for September. Although this is usually not a market mover, given the RBA’s emphasis on wage growth, we will take a close look at the Labour Costs sub-index. At its last two meetings, the Bank reiterated that wage growth remains low, but removed the part saying that this is likely to continue. Instead, officials noted that it has picked up a little and that further lift is expected. The NAB Labour Costs index accelerated to +1.3% qoq in the three months to August, from 0.9% in the three months to July and it would be interesting to see whether this improvement will continue as the RBA has suggested.
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Thursday, October 04, 2018
How A Global Trade War Would Derail Economic Recovery Worldwide / Economics / Protectionism
By: Dan_Steinbock
As the international community is becoming more aware of the threat the U.S.-Sino trade war poses to global growth, what was originally a bilateral tariff conflict is spreading across regions.During a press conference on September 26, President Donald Trump disclosed why he believes China, despite the U.S. tariff wars, respects him – because of his “very, very large brain.”
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Tuesday, October 02, 2018
How to Keep the Philippine Economic Future on Track / Economics / Phillippines
By: Dan_Steinbock
The Philippines is on the right path, if the government can continue to balance between strong growth amid international uncertainty, while pushing reforms that raise living standards. Inflation and foreign investment tell the story.According to the just-released report by the International Monetary Fund (IMF), Philippine real GDP grew by 6.7% in 2017 and by 6.3% in the first half of 2018 on a year-to-year basis, led by strong public investment.
The current challenge is inflation, which rose to 6.4% in August 2018. That’s an average of 4.8% percent year to date, which is above the inflation target band of 2−4%.
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Tuesday, October 02, 2018
China Is a Growing Force That Many Grossly Underestimate / Economics / China Economy
By: John_Mauldin
We hear a lot about the China’s vast problems. They are very real and could have major consequences. But economic reality isn’t black and white.At any given time, both good things and bad things are happening. Ignoring one side because it doesn’t fit your preferred outlook is an excellent way to go badly wrong.
This article is my attempt to demonstrate that China has good news, and even some fabulously great news, much of it quite compelling.
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Saturday, September 29, 2018
The US Dollar Not the IMF Can Save Argentina / Economics / Argentina
By: Steve_H_Hanke
The International Monetary Fund’s $50 billion agreement with Argentina is failing. Earlier this month a scheduled $3 billion payment was postponed while the IMF and the country’s government continued to haggle in Buenos Aires. The peso extended its precipitous fall against the greenback.
The backdrop to this misery is President Mauricio Macri’s weak reform program combined with the IMF’s misdiagnosis of Argentina’s problems. Mr. Macri replaced the left-wing populist Cristina Fernández de Kirchner in December 2015. He inherited a rapidly growing public sector, huge fiscal deficits due to massive subsidies for key products, annual inflation of more than 30%, capital controls, and a dual exchange-rate system. With a slim majority in the National Congress, and facing midterm elections in October 2017, Mr. Macri adopted a gradualist approach to reform.
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Thursday, September 27, 2018
Real Wage Growth Is Actually Falling / Economics / Wages
By: Patrick_Watson
The US economy is at “full employment,” says the official 3.9% unemployment rate.The problem is that fully employed people haven’t seen enough wage growth. It’s a puzzle. Wages used to rise faster when unemployment was this low.
That’s why there was much celebration when the August jobs report showed a 2.8% annual increase in average hourly earnings for “Production and Nonsupervisory Employees,” i.e., regular workers.
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Tuesday, September 25, 2018
Venezuela's Retrogressing Socialist Economy, Spotlight on the Failing PDVSA / Economics / Venezuela
By: Steve_H_Hanke
Two hallmarks characterize capitalist economies. Firstly, property is predominately in private hands. Consequently, goods and services are allocated via market mechanisms in which prices provide signals for businesses, workers, and consumers. Secondly, capitalist economies are highly capitalized. Indeed, the stocks of physical and human capital are relatively large in relation to the capitalist economies’ income flows.
On those two counts, Venezuela is retrogressing. With Chavismo, which commenced when Hugo Chavez took power in 1999, Venezuela has beaten a hasty retreat from anything that would qualify as “capitalist.” Today, it is clearly in the throes of a socialist-interventionist system.
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Monday, September 24, 2018
How the US Dollar Penalizes Emerging Asia / Economics / Emerging Markets
By: Dan_Steinbock
Foreign exchange rates in emerging markets have suffered significant damage against US dollar, including Asia’s high-growth economies (India, Indonesia, Philippines). Is the severity of the damage justified?Internationally, US dollar has been fueled by the Federal Reserve’s rate hikes, oil price increases, and the Trump administration’s trade wars.
Domestically, the worst foreign-exchange performers have been emerging economies - including Argentina, Turkey, Brazil, and Russia - that are vulnerable to rate normalization, exposed to Trump tariffs, major energy importers, or whose sovereign interests have conflicted with US geopolitics.
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Saturday, September 22, 2018
The Trade War With China Could Last A While / Economics / Protectionism
By: Harry_Dent
I agree with him!The richest man in China, Alibaba co-founder Jack Ma, reckons the trade war is the beginning of a long-term battle for supremacy between China and the U.S.
He’s sees no effective short-term solution to this big global issue.
China needs to strengthen its economy to fulfill its long-term shift to stronger domestic consumption while focusing on the real global growth markets in Southeast Asia, India, and Africa.
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Friday, September 21, 2018
China Is Building the World’s Largest Innovation Economy / Economics / China Economy
By: John_Mauldin
China is on its way to becoming the largest economy in the world.In just one generation, something like 300 million+ people went from rural subsistence farming to urban industrial and technology jobs. This transition from rural poverty to export powerhouse to consumer goliath may be the most consequential economic event in centuries.
Yet this story is largely ignored in the US and in much of Europe. We hear about a few projects here and there, but we don’t understand the extent.
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Saturday, September 15, 2018
Trading The Global Future - Bad Consequences / Economics / Global Economy
By: Dan_Steinbock
The Trump administration’s ‘America First’ policies come at a critical time in the global economy. These bad policies will have adverse consequences in international trade. In the absence of countervailing forces, they could unsettle the post-2008 global recovery and undermine postwar globalization.This summer, the Trump administration’s tariff war penalized $50 billion worth of goods traded between the US and China.
The next stage of White House escalation will impact up to $200 billion of Chinese imports, and result in proportionate Chinese retaliation.
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Thursday, September 13, 2018
The Four Steel Men Behind Trump’s Trade War / Economics / Protectionism
By: Dan_Steinbock
In few months, the Trump administration has undermined more than seven decades of U.S. free trade legacies. Who are the policymakers behind this reversal. Wat is their agenda? And why is steel their common denominator?Recently, the Trump administration hammered a revised North American Free Trade Agreement (NAFTA) by pressuring Mexico and then strong-arming Canada to the tentative deal. The White House’s objective is either to redefine the terms on the basis of U.S. economic leverage and unipolar geopolitics or - if that is not acceptable to other parties - to withdraw the U.S. from such FTAs. It is not “either you are with us or against us,” as in the Bush years, but “America First - or nothing.”
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Thursday, September 13, 2018
How Trump Tariffs Could Double America’s Trade Losses / Economics / Protectionism
By: Dan_Steinbock
Trump tariffs are based on flawed doctrines, which could penalize the US as much as its trade deficits. Last Friday, President Trump threatened to impose tariffs on $267 billion in Chinese goods, on top of the additional $200 billion that he said will likely be hit with import taxes in a matter of days.
If the tariff stakes will increase up to $500 billion, it could penalize Chinese GDP by 1%, but the US GDP, which is relatively more vulnerable, would suffer a net impact of 2% of GDP. In dollar terms, the consequent tariff damage could prove even higher than the current U.S. trade deficit with China and thus double the damage.
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Monday, September 10, 2018
U-Turn or Perfect Storm? Globalization a Decade after the Financial Crisis / Economics / Global Economy
By: Dan_Steinbock
A decade ago, globalization peaked. Today, it remains in the doldrums. Consequently, the Trump trade wars take place at a historical moment, when globalization may further stagnate or even fall apart.On Friday September 7, President Donald Trump threatened to impose tariffs on $267 billion in Chinese goods, on top of the additional $200 billion that he said will likely be hit with import taxes in a matter of days.
If the tariff stakes would increase close to $500 billion, it could penalize Chinese GDP by 1.0%, but the US GDP, which is relatively more vulnerable, would suffer a net impact of 2.0% of GDP.
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Wednesday, August 22, 2018
TRADING THE GLOBAL FUTURE - Bad Timing / Economics / Protectionism
By: Dan_Steinbock
This is the first of a three-part series.
In less than two years, the Trump administration has undermined more than seven decades of U.S. free trade legacies. That is both a reflection of and a catalyst for the further erosion of globalization.
Yet, these trade wars did not come out of the blue. The path to the tariff wars is becoming increasingly difficult to reverse or slow down, and the timing of the trade war could not be worse. It is taking place at a historical moment when global economic integration could further stagnate or even fall apart.
Wednesday, August 22, 2018
How US Trade War Is Spreading from Goods to Services / Economics / Protectionism
By: Dan_Steinbock
Trump tariff wars are entering a new, far more dangerous phase. As the White House is expanding its tariff wars, collateral damage is about to spread from goods to services – much of it in the U.S.After months of trade threats, the Trump administration announced its 25% tariff on $34 billion of Chinese imports effective in early July, while threatening levies on another $16 billion of imports. To defend its sovereign interest, China responded with 25% tariffs on $34 billion of US imports and recently imposed an additional tariff of 25% on $16 billion of US imports effective on August 23.
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Tuesday, August 21, 2018
US Economy Beholden to Fed Interest Rate Policy; Here's One Way Gold Could Reach $14,000+ / Economics / Gold and Silver 2018
By: MoneyMetals
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason. Coming up we’ll hear from Dr. Lucas Engelhardt, associate professor of economics at Kent State University and well-known Austrian economist and regular guest lecturer at the Mises Institute. Dr. Engelhardt enlightens us on some of the major flaws in our current monetary policy and the dangers and economic trouble it will eventually produce. He also discusses a couple of different ways we could reintroduce a gold standard to save us from what appears to be an inevitable economic catastrophe. Don’t miss a fascinating interview with Dr. Lucas Engelhardt, coming up after this week’s market update.
Well, there’s no way to soft-pedal it. Precious metals markets got smashed this week.
A currency crisis in Turkey sent a wave of fear through other emerging markets and hard assets at large. That emboldened short sellers who had already piled onto gold and silver futures with historically large positions.
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Friday, August 17, 2018
Economic Expansion - Nine Years. Is That Enough? / Economics / US Economy
By: Arkadiusz_Sieron
Nine years. Is it short or long? It depends on what we are talking about. In the geological time scale, it’s a blink of an eye. But in the business cycle time scale, nine years is a really long time. The current economic expansion has recently turned 9 years old, as the Great Recession ended in June 2009, according to the NBER. With 109 months of economic prosperity (as of July 2018), the current cycle is now the second longest in the U.S. history (and data traces back to the 1850s), overshadowed only by the expansion which occurred between March 1991 and March 2001.
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