Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, November 12, 2007
US Dollar Devaluation Signals Risk Of Accelerating Global Hyperinflation / Economics / Inflation
By: Captain_Hook
Soon, the falling US Dollar ($) will reach a point of maximum pain, where trading partners will be forced to print enough currency to absorb accelerating quantities of $'s or have their currencies soar further against American fiat. Known by many as the ‘race to zero' all fiat currency systems undergo in their latter stages, and based on the observation the $ has now signaled it's in crash mode, one should expect this process to accelerate as essentially what is occurring is US debt holders are being bailed out. What's happening is the market knows they can't pay, and therefore the need to inflate debts away has now gripped macro-conditions. So, Americans are being pampered right now because they are still viewed as ‘key' in global consumption trends, but make no mistake about it, with the exception of newfound wealth in emerging markets, US trading partners are also seeing the consequences of unmanageable debt burdens, which will foster the need for competitive currency devaluations as process unfolds in coming months and years. This is what a parabolic gold price is signaling, the need for speed in currency debasement protocol on a global basis, or as is commonly referred to, ‘competitive devaluations'. Read full article... Read full article...
Monday, November 12, 2007
Interest Rates, Budget Surpluses and Other Economic Fallacies / Economics / US Interest Rates
By: Gerard_Jackson
One only has to read the financial pages of any newspaper to fully experience the poverty of economic thought that pervades the media. It is important to understand that what is considered by the media as sound economics is — bye and large — merely a reflection of the economic thinking that dominates the Treasury and the Reserve Bank. Terry McCrann — Herald Sun finance writer — is an excellent example of what I mean. I want to make it clear, however, that I am not picking on McCrann. I am only trying to clear the economic waters that the likes of McCrann have inadvertently muddied.Read full article... Read full article...
Monday, November 12, 2007
The Depreciating US Dollar and the US Economy / Economics / US Economy
By: Gerard_Jackson
Well, we are certainly living in interesting times, bearing in mind that this is said to be a Chinese curse. Consumer confidence is down even though consumer spending seems to be holding up month after month. The Dow Jones Industrial Average drops by 223.55, sending out panic signals to numerous investors. Yet this fall amounted to only 1.69 per cent. We then get the news that productivity leapt to an annualised rate of 4.9 per cent in the July-September quarter while unit labour costs eased.Read full article... Read full article...
Sunday, November 11, 2007
Impact of the Credit Crunch on UK Borrowers Debt Mountain Going into 2008 / Economics / UK Economy
By: Nadeem_Walayat
The credit crunch originally sparked by hedge funds in June going bellie up due to US subprime exposure, quickly spread to a freeze of the interbank money markets during July 07, and resulted in the first run on a UK bank for 150 years during September. The contagion has continued to spread with magnitude of the problem having grown from just $2 billions to now more than $1 trillion. With this inability to value debt packages leading to ever tighter lending requirements across the credit markets. This article evaluates the real impact of the credit crunch on the UK borrowers.Read full article... Read full article...
Friday, November 09, 2007
Deteriorating Economic Conditions From Main Street to Wall Street / Economics / US Economy
By: Peter_Schiff
Recent reports of better than expected job growth and a 3.9% gain in 3rd quarter GDP have spawned much talk about how the resilience of the American consumer is enabling the country to weather the subprime storm. In reality, the unfolding financial crisis on Wall Street is in fact a direct result of the deteriorating economic conditions on Main Street . Read full article... Read full article...
Monday, November 05, 2007
How Long Can The US Economy Defy Economic Gravity? / Economics / US Economy
By: Gerard_Jackson
Some readers (judging by their tone, I think they are Democrats) took issue with my view that there was still steam in the US economy and that the subprime fiasco would not sink it (It's not the housing market that threatens the US economy). I also pointed out more than once that readers should not be surprised if the Fed cuts rates. Well, the jury has passed its verdict: real gross domestic product came in at an annual rate of 3.9 per cent for the third quarter. This was on top of the 3.8 per cent growth rate for the second quarter. Taken at face value one would have to say that the US economy is accelerating.Read full article... Read full article...
Monday, November 05, 2007
U.S. Economy: Some Cracks Showing / Economics / US Economy
By: Donald_W_Dony
Speculation continues about the U.S. economy. Is it going into a recession or not? There are numerous reports from analysts and economists on credible news outlets like Bloomberg and CNBC about the state of affairs of the American nation. All market pundits seem to provide good evidence in support of their opinions, but I have not seen or heard a commentary on one of the most reliable leading indicators of the economy; the stock market. Read full article... Read full article...
Sunday, November 04, 2007
US Fed Ignoring the Real World Inflation Data - Bernanke Should Take a Hike! / Economics / Inflation
By: Money_and_Markets
Jack Crooks writes: The slumping housing market and the ongoing credit crunch have been a major thorn-in-the-side for the U.S. economy for many months, and conditions are likely to get worse before they get better.
However, does the big picture for the rest of the economy really look as bad as analysts and economists have made it appear?
Read full article... Read full article...
Sunday, November 04, 2007
Only Central Banks Can Create Inflation / Economics / Inflation
By: Mario_Innecco
We think the way inflation is presently defined goes a long way to helping central banks and governments perpetuate the debasement of currencies via the over issuance thereof. Prior to the 1980's The Merriam-Webster Dictionary defined inflation as: “an abnormal increase in the volume of money and credit resulting in a substantial and continuing rise in the general price level”.Read full article... Read full article...
Friday, November 02, 2007
America's Greatest Export - Inflation in Spades / Economics / Inflation
By: Greg_Silberman
Oh the absurdity of it all! The last round of Fed rate hikes began early 2004 and ended in the middle of 2006. One of the primary justifications for a number of mini-rate hikes was the ominous threat of an outbreak in price inflation.
Read full article... Read full article...
Thursday, November 01, 2007
US Manipulation of Inflation Economic Statistics to Produce Strong GDP Growth Figures / Economics / Inflation
By: Peter_Schiff
Yesterday, as the dollar fell to new record lows and oil and gold prices surged to new highs, Wall Street remained fixated on wholly meaningless government data that managed to report the lowest inflation in the last half century. These bizarre numbers were integral in allowing the Commerce Department to report 3.9% annualized GDP growth in the third quarter, which was heralded by the bulls as evidence that a resilient U.S. economy had shrugged off the problems in the housing and mortgage markets. However, the government's ability to make “economic growth” magically appear is based purely on statistical finesse. Read full article... Read full article...
Tuesday, October 30, 2007
The Deflationary Effect of Migrant Workers / Economics / Immigration
By: Nadeem_Walayat
This week the UK government came clean and stated that it has got its facts wrong on both the number of migrant workers and the number of jobs created. More than half of the jobs created by New Labour have gone to migrant workers, with the number of migrant workers now estimated at 1.5 million. In my previous article, I highlighted the key negatives of migration into the UK, in that the public sector is inefficient to such an extent that it cancels out the estimated extra tax revenue of £6 billions.Read full article... Read full article...
Tuesday, October 30, 2007
The Growth Recession and Early Stages of a Housing Depression / Economics / US Economy
By: John_Mauldin
This week in Outside the Box, Van Hoisington and Dr. Lacy Hunt of Hoisington Management undertake an assiduous analysis of the economy, specifically quantifying the underlying impact of the real estate market on GDP growth through the follow-on adverse effects on consumer spending.
As outlined in previous publications, the housing debacle has not by any stretch of the imagination reached bottom, having an estimated $800 billion of adjustable rate mortgages reset between October 2007, and December 2008. These resets Hoisington indicates are the home buyers who bought at the top of the 2006 housing market, many of whom paid zero down and received mortgage rates of 0%.
Read full article... Read full article...
Monday, October 29, 2007
The Economy and The Worker Value-added Fallacy / Economics / Corporate Earnings
By: Gerard_Jackson
Now that the Labor Party has the sniff of victory in its lungs, some of its most ‘brilliant economic thinkers' are already dreaming up schemes that will impose heavy costs on the Australian economy. One of these dirigiste schemes is based on the value-added fallacy. There are two assumptions behind their thinking: One is the belief that the state (politicians and union hacks) can impose high-value-added structures on the economy that will provide a buffer against commodity-driven booms. This policy will lead — so they think — to more value-added export-orientated production. The second assumption is the unfounded belief that value added always equals high-tech.Read full article... Read full article...
Monday, October 29, 2007
US Economy: The Subprime Market, Depreciation and the Exchange Rate / Economics / US Economy
By: Gerard_Jackson
Current economic commentary is misleading a great number of people. The problem is — as always — bad economics. We can all recall that it was not long ago when we were told by a horde of financial and economic advisers that the subprime market would sink the American economy. What this lot overlooked was the important fact that only about 14 per cent of mortgages are subprime. Moreover, less than 2 per cent of these are in trouble.Read full article... Read full article...
Friday, October 26, 2007
US Administrations Economic Gang - Send in the Clowns / Economics / US Economy
By: Peter_Schiff
Four leading members of the Bush administration's economic team, including Ed Lazear, Chairman of the Council of Economic Advisors, Commerce Secretary Carlos Gutierrez, Al Hubbard, director of the National Economic Council, and Jim Nussle, director of the Office of Management and Budget, convened on a CNBC panel earlier this week and confidently forecast that the economy would avoid a recession. As they uttered their platitudes, we learned that housing sales plunged again, with national inventories of unsold homes hitting a new record high, and that Merrill Lynch disclosed nearly $8 billion in losses. Set against this backdrop of deteriorating economic news, it would have been more honest, and perhaps more effective, if the Administration team came on stage in clown makeup and oversize shoes.Read full article... Read full article...
Friday, October 26, 2007
A Different Kind of US Recession - Nominal Vs Real Decline in GDP / Economics / US Economy
By: Andy_Sutton
In a recent interview with Britain's Telegraph newspaper, Jim Rogers, the world-renowned investor declared the United States to be in recession. He didn't stop there. He has taken the next step and rid himself of the downtrodden US Dollar in favor of Chinese Yuan, Japanese Yen and the Swiss Franc. A bold move? A lone voice in a sea of complacency? Not so; Rogers is just the latest in a growing line of credible voices to abandon the US and its struggling currency. Read full article... Read full article...
Friday, October 26, 2007
Market Barotrauma - Disconnect From the Reality of the Business Cycle / Economics / Inflation
By: Brian_Bloom
There has been a disconnect in logic which has been seriously bothering me in recent weeks. Everything in my training has taught me that ‘the market' ultimately exerts a discipline on speculative excess, and ‘the market', being the sum of all players, is more powerful than any one player or set of players. Conceptually, therefore, whilst the Central Banks might ‘manage' the markets, the very idea of their being able to eliminate the business cycle has always struck me as being a nonsense. The longer the contraction phase of a business cycle is postponed, the worse will be the excesses that build up, and the more painful will be the rectifying contraction phase. Read full article... Read full article...
Tuesday, October 23, 2007
US Economy Gradually Sliding Into Recession / Economics / US Economy
By: Ned_W_Schmidt
This week's chart shows U.S. economy gradually sliding into recession. This indicator is the average year-to-year change of about twenty measures. Many are real measures, like tons or units, so some of false impressions created by incorrect price calculations are avoided. Only recently has the collapse of the housing sector been acknowledged as a serious negative on U.S. economy. Many have mistakenly believed Wall Street could “feed” the nation.Read full article... Read full article...
Tuesday, October 23, 2007
Economy Swamped by Confusion as Money Supply Goes Wild / Economics / Money Supply
By: Gerard_Jackson
What passes for economic commentary these days is enough to drive one to drink. Let's start with Mike Steketee, another of Rupert Murdoch's resident lefties. He tells us that Nicholas Gruen — an economist — “found that cutting taxes for low and middle-income earners generated the largest response in increased employment”. This is just another version of the consumption-drives-the-economy fallacy. Read full article... Read full article...