Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, June 26, 2008
Money Supply Surge to Lead to US Inflationary Depression / Economics / Stagflation
By: Mark_OByrne
Gold closed at $879.60 in New York yesterday and was down $9.20 and silver closed at $16.48, down 13 cents. Gold fell prior to and shortly after the Federal Reserve's decision to keep interest rates on hold at 2%. However, with rates remaining extremely accommodative and inflation surging gold soon recovered and rallied into the New York close and continued rallying in electronic trading. Gold has continued to rally in Asian and early European trading. Read full article... Read full article...
Wednesday, June 25, 2008
Inflation to Unleash a Financial Tsunami / Economics / Inflation
By: Mark_OByrne
Gold closed at $888.80 in New York yesterday and was up $4.40 and silver closed at $16.61, down 16 cents. Gold fell initially in Asia, then rose in early European trading prior to falling again in recent trade.With oil prices remaining near record highs, near $137 a barrel this morning and the dollar slightly weaker (it breached and remains close to 1.56 against the euro again this morning), gold should remain well bid at these levels but in the short term anything can happen and support is at $880 and $860. With the Federal Reserve likely to leave interest rates on hold at 2%, markets will look to the accompanying statement for indications as to future interest rate direction.
Read full article... Read full article...
Tuesday, June 24, 2008
Fed Interest Rate Meeting: The Long-Lasting Costs of Inflation / Economics / Inflation
By: Adrian_Ash
"...The true cost of beating inflation vs. the cost of letting it run..."
"AT THE SURFACE LEVEL" , explains Bradford De Long in a decade-old paper , the destruction of money during the 1970s happened because no one in power "placed a high enough priority on stopping inflation."
Read full article... Read full article...
Tuesday, June 24, 2008
The Impact of Rising Prices on Consumers and Producers / Economics / Inflation
By: Paul_J_Nolte
The litany of banks surrendering to the siren call of raising additional capital expanded again last week, in addition to various write-downs from some of the money center banks put the market back on its' heals for the week and opened the door to yet another “test” of the January/March lows. While energy prices have been blamed for the declined last week, in fact oil prices have declined in each of the past two weeks. The inflation reports continue to run uncomfortably “hot” as energy and food prices impact both the consumer and producer prices.Read full article... Read full article...
Tuesday, June 24, 2008
Rising Prices and the Inflation Genie / Economics / Inflation
By: David_Vaughn
Do you believe in high prices? Do you believe that the cost of every day living is climbing substantially higher? I just don't know. Our government has not warned us yet of a real inflationary problem. So the 5 dollars a gallon I now pay for milk is just an illusion. 4 dollar gas may also be an illusion. We must be guided of course by our government as to whether or not inflation is a real threat. So the government remains telling us that we are merely on the edge of an inflationary problem. I feel better already.Read full article... Read full article...
Tuesday, June 24, 2008
Inflation and Negative Real Interest Rates are Necessary to Avoid Depression / Economics / Inflation
By: John_Mauldin
This week's Outside the Box will challenge a few of your base assumptions. Paul McCulley, the managing director at PIMCO, offers us a kind word for inflation and the reasons that the Fed will be on hold for a lot longer than the markets currently think. And part of that is to avoid a real recession or even a depression. Getting this debate right is important.
These are indeed interesting times we live in. I look forward to being with Paul at the end of July on our Maine fishing expedition, where he can defend his proposition to the group of economists and analysts gathered there. Have a great week.
Read full article... Read full article...
Tuesday, June 24, 2008
Mortgage Equity Withdrawals Slump- Another Blow to Household Cash Flow / Economics / Credit Crisis 2008
By: Paul_L_Kasriel
As my regular readers know - well, it is difficult to have "regular" readers if I don't write regularly anymore - I make a distinction between the wealth effect and the cash-in-hand effect. If the values of your stock portfolio or your house go up, you are wealthier "on paper," but you do not have any extra cash to spend. But if the value of your house goes up and you increase your borrowing against your housing collateral, then you have more cash in hand to spend. Read full article... Read full article...
Monday, June 23, 2008
Don't Worry About a Return to 1970s Style Stagflation / Economics / Stagflation
By: John_Derrick
Recent months have resurrected a potent economic villain of the past—stagflation.
The U.S. economy is seeing little to no growth, while at the same time inflation has risen to levels not seen in the better part of two decades due in large part to soaring food and energy prices.
Read full article... Read full article...
Monday, June 23, 2008
Central Banks Will Be Printing Money Like There's No Tomorrow / Economics / Money Supply
By: Captain_Hook
That's what master planners will be doing in continuing efforts to offset a collapsing credit cycle. And we are just a few short weeks away from when this should begin in earnest. Why not right now? Why will this likely take until July to begin in earnest? Well, for one thing master planners (heavy on the sarcasm) have it their minds they need to talk the dollar ($) up right now, at least until things start falling apart again. This is official Fed policy at present, and orthodox hedge fund managers are supporting it, along with selling commodities and precious metals. And the other thing is the stock market. As mention many times this year, hedge funds are locked into a sell commodities / precious metals and buy the $ / stocks trade for the present quarter that will be pushed aggressively right until the end of June. Read full article... Read full article...
Monday, June 23, 2008
Inflation and Wages- Another Dangerous Economic Fallacy / Economics / Inflation
By: Gerard_Jackson
Economic fallacies are like dormant microbes, sooner or later they once again become active. However, the view that wages can cause inflation is one fallacy that never seems to go away. There are economists in the US, the UK and Australia warning that wage rises could trigger an inflationary surge. Nothing new here. In early 2005 Mark Whitehouse and Kemba Dunham of the Wall Street Journal complained that too much job growth generated inflation. In their view good job numbers would probably "fuel fears of higher inflation and cause bond prices to fall and interest rates to rise".Read full article... Read full article...
Monday, June 23, 2008
US Economy to be Hit by Many Credit Crisis Hurricanes with Many Eyes / Economics / Credit Crisis 2008
By: Mike_Shedlock
Often times it is not the leading front of the hurricane that does the most damage, it is the backside. Here is the three stage pattern of hurricane damage.
- Winds from the front side weaken but do not destroy structures
- The eye of the hurricane brings a foreboding sense of unnatural calm
- Wind comes slamming from the opposite direction as the eye passes over, shearing structures from the opposite direction
Sunday, June 22, 2008
Inflation Hitting Emerging Markets / Economics / Emerging Markets
By: Prieur_du_Plessis
Financial Times: Goldman close to $7 billion SIV bail-out
“Goldman Sachs is close to finalising a plan to restructure a $7 billion investment vehicle formerly run by London-based hedge fund Cheyne Capital, in a move that could potentially usher in a crucial new phase in the credit turmoil.
“The US bank's proposed reorganisation of the so-called structured investment vehicle is set to be just the first of a number of deals that could see about $18 billion worth of SIV assets restructured in the coming months.
Read full article... Read full article...
Friday, June 20, 2008
US Recession Masked by the Fed Dumping Treasuries to Support Banking System / Economics / US Economy
By: Paul_L_Kasriel
For the second month in a row, the Conference Board's index of Leading Economic Indicators (LEI) increased by 0.1% in May. And for the second month in a row, the interest spread between the yield on the 10-year Treasury security and the fed funds rate made a large positive contribution to the change in the LEI, 0.14 in April and 0.19 in May. All else the same, had it not been for the positive contributions from the interest spread component, the LEI would have contracted in April and May. Is there any reason to hypothesize that the spread component is biased upwards? Read full article... Read full article...
Thursday, June 19, 2008
UK Retail Sales High Street Boom- The Truth Behind the Headlines / Economics / UK Economy
By: Nadeem_Walayat
In the midst of the worst economic conditions in nearly 20 years, May saw retail sales soar by a surprising annualised rate of 8.1%, the highest rate in 20 years, up 3.4% for the month. The surge is more akin to that expected during boom times rather than the bust that the UK is fast heading towards. The mainstream media immediately seized on the headline rate to announce Britain is experiencing a mini high street spending boom. However looking behind the headline figures tells a different story.Read full article... Read full article...
Thursday, June 19, 2008
Inflation Will Inevitably Surge Even Higher! / Economics / HyperInflation
By: Money_and_Markets
Larry Edelson writes: I first met Martin about 14 years ago, at the Weiss School in Palm Beach Gardens, Florida, where I had enrolled my three young children.
Martin was running his research and ratings company on the east side of the building, while his wife, Elisabeth, was running the school, on the west side of the building.
Read full article... Read full article...
Thursday, June 19, 2008
Wage Price Inflation Spiral Plus House Price Deflation Equals Stagflation / Economics / Stagflation
By: Nadeem_Walayat
Warnings of a further 40% hike in energy costs this year puts the Bank of England on high alert for a wage price spiral kicking in which will lead to much higher and prolonged inflation. The first signs of this are in the 14% pay hike agreed with the Shell subcontracted tanker haulers over 2 years at 7% per year which is more than double the current CPI inflation rate of 3.3%. The public sector unions are seizing this event to warn that recent pay agreements that cover the next 2 years will have to be negotiated in line with the rising cost of living signaling a 'Winter of Discontent' for Gordon Browns Labour government.Read full article... Read full article...
Wednesday, June 18, 2008
G8 Fail to Address Growing Global Instability / Economics / Global Financial System
By: John_Browne
With market watchers the world over feeling increasingly alarmed by spreading economic problems, much hope and attention was focused on Japan last weekend as finance ministers and central bankers of the G-8 (Group of Eight) nations gathered to apparently map out a coordinated global response. In particular, all hoped that the delegates would conjure a plan to save the dollar from the dustbin and stop the price of oil and food from pushing the world into crisis.Read full article... Read full article...
Tuesday, June 17, 2008
US Economy Hits the Canvas, Fed Expected to Keep Rates on Hold at 2% / Economics / US Economy
By: Mike_Whitney
The economy is in tatters. Consumer confidence has plummeted, food and energy prices are soaring, and the housing market is experiencing its biggest crash since the Great Depression. Manufacturing is down, unemployment is up, gasoline is topping $4 per gallon, and tent cities are sprouting up throughout the Southwest. If there's a silver lining to this mess; it's not visible from planet earth. Read full article... Read full article...
Tuesday, June 17, 2008
UK CPI Inflation Breaks Above Bank of England's Upper 3% Limit / Economics / Inflation
By: Nadeem_Walayat
The UK Consumer Price Index rose to 3.3% for May 08 above the consensus forecasts of 3.2% pushing inflation to a 11 year high on the back of a surge in import and producer prices. Surging inflation not only puts a hold on further UK interest rate cuts but opens the door to what can only be construed as panic rate hikes later in the year to prevent a wage price spiral from taking hold and pushing the UK economy into stagflation.Read full article... Read full article...
Tuesday, June 17, 2008
Lousy Monetary Policy and Economic Commentary Due to Ignorance / Economics / Liquidity Bubble
By: Gerard_Jackson
Some readers think I'm exaggerating the dismal state of economic debate in Australia. Alas, if that were only true. Last April The Australian referred to P. D. Johnson, aka Henry Thornton, as opining that current economic policy with respect to inflation could cause a recession. He went on to argue that we could be seeing the return of 'Goodhart's law'. ( The Australian , Is he on the right track? , Graham Lloyd, 26 April 2008). Johnson defines this law as "Any statistical relationship that is relied upon will cause changes of behaviour that?changes the?relationship". ( The Return of the Check List ). This is really bad stuff.Read full article... Read full article...