Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, March 26, 2015
The Crude Oil Price Crash and China Economic Slow Down / Economics / China Economy
By: Raul_I_Meijer
This is another essay from friend and regular contributor of The Automatic Earth, Euan Mearns at Energy Matters.
One comment on my part: Euan says ‘This has lead to speculation that weak global demand, stemming from masked economic woes, may also be playing a key role.‘ I don’t think the use of the term ‘speculation’ is appropriate here, because it seems overly obvious that China’s economic slowdown has played a major role in the oil price crash (and continues to do so). Even if there’s no ‘scientific’ proof, and even if the main media narrative remains OPEC overproduction and the inane meme of the cartel’s refusal to cut production, it certainly goes way beyond mere speculation.
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Wednesday, March 25, 2015
We’re at the Dawn of a “New Energy Age” / Economics / US Economy
By: Money_Morning
Dr. Kent Moors writes: Recently I received a very thoughtful comment from a subscriber.
In response to “The Truth About Iran’s Impact on Oil Prices,” Ramon had this to say about playing “the Iran card:”
Dr. Moors,
I find your updates very helpful in cutting through the chatter. After spending a large amount of time and resources trying to understand petroleum related energy, I developed this question.
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Wednesday, March 25, 2015
A Very Weak U.S. Economic Recovery / Economics / US Economy
By: EWI
For years, the government has been manipulating its unemployment statistics to line up with its claim that the economy has recovered strongly.
Jim Clifton of Gallup finally couldn't stand it anymore and wrote a terrific op-ed on the subject. Here is the meat of it:
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Wednesday, March 25, 2015
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing / Economics / Inflation
By: Nadeem_Walayat
Zero 0.0% CPI inflation not seen for 50 years as the continuation of the consequences of the collapse in crude oil prices that continue to stagnate below $50. And that despite falling unemployment wages are being suppressed as a continuing consequences of out of control immigration as workers continue to flood into the UK from across the economically depressed euro-zone. Whilst the mainstream press continues to warn of the dangers of outright deflation as CPI is expected to nudge below 0% and describe how this is bad for the economy as people put off consuming today in the anticipation of lower prices tomorrow. Meanwhile RPI, which is the closest thing to real inflation slid to 1% (1.1%) and is set against the real demand adjusted UK inflation rate of 1.5%.
Tuesday, March 24, 2015
Japan Short Term Gains And Long Term Disaster / Economics / Japan Economy
By: Raul_I_Meijer
About a month ago, Japan’s giant GPIF pension fund announced it had started doing in Q4 2014, what PM Abe had long asked it to: shift a large(r) portion of its investment portfolio from bonds to stocks. No more safe assets for the world’s largest pension fund, or a lot less at least, but risky ones. For Abe this promises the advantage of an economy that looks healthier than it actually is, while for the fund it means that the returns on its investments could be higher than if it stuck to safe assets. Not a word about the dangers, not a word about why pensions funds were, for about as long as they’ve been in existence, obliged by law to only hold AAA assets. This is from February 27:
Tuesday, March 24, 2015
U.S. Economy Still on Life Support - What Your Governments Hiding From You... / Economics / US Economy
By: EWI
Dear investor,
For years, the government has manipulated its unemployment statistics to line up with its claim that the economy has recovered strongly.
But as a student of the markets, you know that already.
So here's something you may not know ...
Monday, March 23, 2015
U.S. Economy and the Illusion of Prosperity / Economics / Economic Theory
By: Frank_Hollenbeck
President Obama and Federal Reserve chair Janet Yellen have recently been crowing about improving economic conditions in the U.S. Unemployment is down to 5.5% and economic growth in 2014 hit 2.4%.
Journalists and economists point to this improvement as proof that quantitative easing was effective. They seem to have political blinders on. The boom is artificial and has been built by adding debt on top of excessive debt. Total household debt increased 2.5 % in 2014 – the highest level since 2010. Mortgage loans increased 1.5%, student loans jumped by 6.6%, and auto loans swelled a hefty 9.6%. The improving auto sales are based on a bubble of sub- prime borrowers. Auto sales have been brisk because of a surge in loans to individuals with credit scores below 640. Auto loans to individuals with strong credit scores, above 720, have barely budged.
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Sunday, March 22, 2015
Recent Economic Data Shows the Good Side of Deflation / Economics / Deflation
By: MISES
Edin Mujagic writes: The Fed, the ECB, and the Bank of England repeatedly tell us that deflation is extremely dangerous for an economy. Central bankers, most economists, and the media speak of deflation as one of the greatest disasters that can strike an economy.
It is stunning then, given the apparent importance of the subject — and the possible collateral damage of pro-inflation policies — that few seem to bother to ask the deeper, fundamental question: does the historical data show that deflation is actually a terrible thing? The data suggests that it is not. In fact, looking at recent GDP, inflation, and employment data, one could even say that a shot of deflation is what many economies need. Let us take a look at the recent real-life examples.
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Thursday, March 19, 2015
European QE Creates Distortions in World Economy / Economics / Quantitative Easing
By: John_Browne
In the closing months of 2014, Germany faced a difficult dilemma. Although its own economy was holding up well, incoming data showed that the rest of the Eurozone was rapidly slipping into recession. As a result, the calls for the European Central Bank (ECB) to unleash its own quantitative easing campaign grew louder. However, the policy had always been unpopular in Germany, both among high financial officials and rank and file Germans, where a strong euro has been prized. But in the end, Berlin was 'persuaded' to drop its efforts to forestall a QE campaign that everyone else in the world seemed to want.
Thursday, March 19, 2015
China's Deflationary Economic Bust and Beyond: Anne Stevenson-Yang Presentation / Economics / China Economy
By: Mike_Shedlock
Anne Stevenson-Yang graciously made her presentation on China 2015 Risks - Deflationary Bust and Beyond publicly available.
I wanted to embed the document but it got distorted a bit, so please click on the above link to download the document.
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Monday, March 16, 2015
Government Regulation is a Another Hidden Tax / Economics / Market Regulation
By: MISES
D. Brady Nelson writes: Perhaps due to it not being as readily quantifiable as government taxation, debt, welfare, and money creation; regulation has too often been superficially dealt with. In many ways, the largely “hidden tax” of regulation is a bigger threat to liberty, economy, and morality than other weapons of forceful government intervention.
Monday, March 16, 2015
Hyperinflation is a Process / Economics / HyperInflation
By: Dr_Jeff_Lewis
Reserve currency or no, hyperinflation is a process. And we are fully entrenched in that process. History defines the parameters for us.
Too much debt, too much money created from nothing. And ultimately, the loss of confidence, leading to panic. Those who deny it are not looking, not measuring correctly, or both. Much of the confusion comes from the unnecessary use of jargon and euphemism.
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Saturday, March 14, 2015
An Austrian take on Inflation / Economics / Inflation
By: Alasdair_Macleod
We know that today’s macroeconomists are very confused about inflation, if only because despite all experience they think they can print money and increase bank credit with a view to generating price inflation at a controlled 2% rate. Admittedly, most of them will acknowledge there is more hope than reality about the controlled bit. Economic policy should be based on more than just hope.
Friday, March 13, 2015
Alan Greenspan Warns Crude Oil Price Hasn't Hit Bottom Yet / Economics / US Economy
By: Bloomberg
Former Federal Reserve Chairman Alan Greenspan Alan Greenspan spoke with Bloomberg Television's Betty Liu about the outlook for oil, the U.S. economy and the dollar.
Greenspan told Betty Liu that oil hasn't hit bottom yet: "We are at the point now where, at the current rate of fill, we’re going to run out of room [at our domestic facility in Cushing, Oklahoma] by next month. And then the question is -- where does the crude go? Because everyone's forecast as to what was going to happen when prices collapsed was a sharp curtailment in shale oil production. That has not happened. The weekly figures, which are produced by the Energy Information Agency through March the 6, show a continued rise in domestic crude production and it has got no place to go, because we can’t legally export the way we would for most products. We can do a little exporting and Canada, but essentially, we’re bottling up a huge amount of crude oil in the United States."
Thursday, March 12, 2015
China Economic Growth Reality Check, Hard Landing Global Recession at Hand / Economics / China Economy
By: Mike_Shedlock
How Fast is China Growing?
Analyst estimates of Chinese growth keep getting lower and lower. Yet, those declining estimates have all been from a lofty level: From 10% to 9%, to 8% to 7.5%.
China's growth target for 2015 is 7.0%.
Many question those growth estimates. I certainly do. Chinese growth is not consistent with energy demand, raw materials, or personal consumption. Worse yet, growth does not factor in pollution or malinvestments in vacant housing, vacant malls, vacant airports, etc.
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Tuesday, March 10, 2015
U.S. Employment, the Economy & Interest Rates / Economics / US Economy
By: Gary_Tanashian
The February Employment report was a strong +295,000 with unemployment dropping to 5.5%. In Friday's Market Notes update we highlighted that per BLS this was a services-driven report as the leading edge of the economy, the smaller but key manufacturing and industrial sectors, have begun to decelerate (notably in forward-looking 'New Orders').
Tuesday, March 10, 2015
China: Hot Money Flow In, Now Out / Economics / China Economy
By: Steve_H_Hanke
For some years, hot money flowed in, adding massively to China’s foreign reserve stockpile. Speculators borrowed cheaply in U.S. dollars and bought yuan-denominated assets in anticipation of an ever-appreciating yuan. Well, this carry trade has shifted into reverse, with $91 billion in net outflows in the last quarter of 2014. And with that, the ever-appreciating yuan story has come to a close, too. Indeed, the yuan has lost 1.8% against the greenback since the New Year.
Monday, March 09, 2015
The Grand Deception Continues, More Fed Propaganda / Economics / Economic Statistics
By: Michael_Pento
Last Friday a photograph of a dress, whose exact colors were in doubt and became the subject of much debate, dominated the Internet. Not only is this a perfect example of the inane distractions that the public is fascinated with, but it is also a topic that should be elevated to a higher level of discussion. That is, how people can look at the same thing and yet interpret it in different ways?
Sunday, March 08, 2015
Why It Matters If the Dollar Is the Reserve Currency / Economics / US Dollar
By: MISES
Patrick Barron writes: We refer to the dollar as a “reserve currency” when referring to its use by other countries when settling their international trade accounts. For example, if Canada buys goods from China, China may prefer to be paid in US dollars rather than Canadian dollars. The US dollar is the more “marketable” money internationally, meaning that most countries will accept it in payment, so China can use its dollars to buy goods from other countries, not solely the US. Such might not be the case with the Canadian dollar, and China would have to hold its Canadian dollars until it found something to buy from Canada. Multiply this scenario by all the countries of the world who print their own money and one can see that without a currency accepted widely in the world, international trade would slow down and become more expensive. In some ways, its effect would be similar to that of erecting trade barriers, such as the infamous Smoot-Hawley Tariff of 1930 that contributed to the Great Depression.
Saturday, March 07, 2015
U.S. Employment Trends - What Age Groups Get the Jobs? / Economics / Employment
By: Mike_Shedlock
One interesting fact in today's jobs report (see Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K) was a drop in teenage unemployment of 1.7 percentage points while overall the unemployment rate fell by only 0.2 percentage points.
The only reason the overall rate fell was a plunge in labor force of 178,000. Household survey employment only rose by 96,000 vs. the establishment survey gain of an alleged +295,000.
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