Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Sunday, May 29, 2022
What is the Crackup Boom? / Economics / Crack Up BOOM
By: Nadeem_Walayat
The crackup boom as theorised by :Ludwig von Mises in the 1920's in the face of Austrian hyperinflation is when the masses wake up to the inflation game the government and the central bank have been playing, that of printing money on an epic scale that devalues the value of fiat currency resulting in ever higher price rise in the shops coupled with increasing lack of supply as prices rise due to producers / sellers inclined to slowdown the process of delivery for higher future prices in response to which the government prints even more money to placate the masses in response to demands the government do something to address the "cost of living crisis".
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Friday, May 27, 2022
How the United States Conquered Inflation Following the Civil War / Economics / Inflation
By: MoneyMetals
By Larry Reed : Americans today are once again the victims of price inflation brought on by runaway government spending and printing of unbacked paper money.
According to the most recent polling data, the American public’s approval of Congress stands at a dismal 21 percent. Almost four times as many people disapprove of the job it’s doing.
That’s par for the course in recent decades. It’s the major reason the Washington sausage grinder earns so little praise. To be fair, though, let’s review an occasion when lawmakers got something right. I’m prompted to share this story now because its lessons are especially relevant considering today’s concerns about rising price inflation. The year was 1875.
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Friday, May 27, 2022
Greater Depression Now!? / Economics / Great Depression II
By: Raymond_Matison
Most investors know that a recession is defined by a decline in national GDP for two quarters, that is, two three month periods. Investors also have experienced economic pundits writing or announcing that “we may experience a recession in the next several quarters, or expect one in the next one to two years”. It seems that we are actually never in a recession, but rather a recession may be experienced by the public in the not too distant future.
In one respect that viewpoint is understandable since it takes several months for the National Bureau of Economic Research (NBER) to confirm that the economy has previously experienced two quarters of negative growth, and thus they can never confirm that we are in a recession, but rather we can only know with a lag that we have previously experienced a recession. It could take up to a year for the NBER to confirm that we were in a recession, but by the time they are able to confirm this fact – we may already have exited that recession. Also, it requires significant lags of time to confirm that the economy continues to remain in a recession. Thus, such information may be valuable and interesting to economists, but because of reporting and confirmation lags, it has essentially no value to the consumer.
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Friday, May 20, 2022
THE INFLATION MEGA-TREND QE4EVER! / Economics / Inflation
By: Nadeem_Walayat
A reminder folks that regardless of Fed propaganda and what you read in the mainstream press QE is 4 EVER! Once it starts it will not stop. As I have been iterating for over a decade now as the following excerpt from 3 years ago illustrates (Stock Market Trend Forecast March to September 2019) that CRISIS ARE MONEY PRINTING EVENTS TO CAPITALISE UPON BY INVESTING IN ASSETS THAT ARE LEVERAGED TO INFLATION!
So why has the the stock market soared, what is that the stock market knows that most commentators and economists fail to comprehend? We'll for one thing there are the dovish signals out of the Fed which go beyond a pause in their interest rate hiking cycle in response to a subdued inflation outlook. Similarly the worlds other major central banks have their own reasons to avoid rate hikes, most notable of which is the Bank of England that has been busy propagandising the prospects of a NO Deal Brexit Armageddon in attempts to scare Westminister into avoiding EXITING the European Union in anything other than an ultra soft BrExit.
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Friday, May 20, 2022
US Real Estate Investors – Is There An End In Sight? / Economics / US Housing
By: Chris_Vermeulen
The US stock market contracted sharply over the past 30+ days while traders attempted to identify the risks associated with the US Fed rate increase. Behind the scenes, real estate investors and homeowners are under pressure due to higher costs on nearly everything. Gas, food, everyday items, credit card interest payments – almost everything costs more due to inflation and increasing fuel costs.
I remember in 2007-08 when Oil reached levels above $140ppb and the seemingly high costs of everything just before inflation peaked and the markets turned bearish. Back then, much like today, a period of extreme speculation seemed to permeate buyers and investors throughout the US.
What broke this trend was the Global Financial Crisis. When the economy started to unravel, excessive credit/debt levels suddenly became unmanageable for nearly everyone. What seemed like a reasonable and manageable amount of debt suddenly became excessive as the US Fed raised the Fed Funds rate from 1.0% to 5.5% – a 450% increase.
Recently, we’ve seen the US Federal Reserve raise rates from 0.25% to 1.0%. The Fed may raise rates again soon, trying to tame inflation. I don’t have a crystal ball, but it is not difficult to understand how inflation, higher consumer costs, and increased debt servicing costs are going to panic many real estate investors, especially after many years of ZIRP and low inflation.
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Monday, May 16, 2022
Sanctions, trade wars worsen US inflation / Economics / Protectionism
By: Dan_Steinbock
The Fed’s aggressive and belated rate hikes will escalate economic challenges in the US and elsewhere, thanks to ill-advised sanctions and trade wars.Recently, the Federal Reserve lifted its benchmark interest rate by half a percentage point, to a range of 0.75%-1%, following a smaller rise in March. It was the Fed’s biggest increase in 22 years.
Last fall, Jerome Powell, the Fed chairman, still characterized rising prices as "transitionary" which would not leave “a permanent mark in the form of higher inflation.”
So, when inflation began to climb rapidly after mid-year 2021, the Fed ignored it until it soared.
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Friday, May 13, 2022
UK Public Debt Smoking Inflation Gun / Economics / UK Debt
By: Nadeem_Walayat
Britains debt mountain has long since passed the £2 trillion pound mark, so how come the UK managed to do this without paying the piper? A free lunch given low UK bond interest rates, we'll it's because the Bankster of England has MONETIZED near HALF of Britains DEBT! Now do you understand where the INFLATION is coming from? Yes, as I wrote 12 YEARS AGO in my 100 page Inflation Mega-trend ebook that Inflation is by DESIGN caused by rampant government money printing that the central banks monetize! Which the Bank of England has now done to the tune of near £1 trillion! Which resolves in a fake debt to GDP graph such as the one below that the academic economists get their knickers in a twist over without able to think outside of the box and realise the fundamental fact that actual UK market debt is HALF that which is being reported because the Government is effectively PAYING ITSELF INTEREST on HALF of it's debt! Why don't the clowns in MSM report on any of this? After all It's not rocket science!
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Tuesday, May 10, 2022
RECESSION RISKS 2023 / Economics / Recession 2023
By: Nadeem_Walayat
Firstly it does not actually matter if a recession materialises during 2023 or not all that matters is most people THINK it's going to happen, for asset prices discount the future which is why today stock prices are falling even if that is not being reflected in the stock indices due to the Stocks Bear Market Tornado which I will cover in depth in a forthcoming stocks article. Nevertheless there is a RISK of inflation that I have been flagging a warning of a good 6 months BEFORE the current Yield Curve inversion.
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Saturday, May 07, 2022
Russian Sanctions Stagflation Driver / Economics / Stagflation
By: Nadeem_Walayat
Knock out 20% of the world's gas exports and 10% of the worlds exports and how can you not expect even higher inflation. Even worse for Europe where several nations such as Germany rely on Russia for upto 40% of their gas. Whilst for the UK 4% of russian gas may not sound like much but the impact has been on gas prices that had already soared several fold before the Ukraine invasion have now doubled once more. with the risks that the sanctions blitzkrieg prompts Russia to pull the plug on EU gas that will trigger gas rationing among many nations such as Germany and Italy which means INDUSTRY will take a hit thus further disrupting supply chains and hence continuing to put upwards pressure on prices as component and finished goods supply chains are further disrupted which easily translates into EU inflation surging higher by an additional 2% and reduction in GDP of at least 0.5%.
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Saturday, April 30, 2022
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing, Fed Strategy Revealed / Economics / Inflation
By: Nadeem_Walayat
UK CP LIE Inflation hits 6.2%, whilst RPI that which most corporations raise their prices to has rocketed higher to 8.2% whilst real UK inflation stands at at least 15%, meanwhile across the atlantic US CPLIE inflation of 7.9 % stands on the brink of breaking to well above 8% with real inflation also at around 15% So much for the Pandemic deflationary depression that the clueless mainstream media had been promoting for much of 2020 and then sleep walked into the mantra of transitory inflation for the whole of 2021, finally awakening during 2022 to what amounts to out control inflation, though like gullible fools swallowing the central bankster's sales pitch of laying the blame on Czar Putin's Afghan War 2.0 in Ukraine which illustrates the extent to which what you read in the mainstream press tends to be garbage written by clueless journalists.
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Thursday, April 21, 2022
THE INFLATION MEGA-TREND - Protect Your Wealth From Loss of Purchasing Power / Economics / Inflation
By: Nadeem_Walayat
Inflation has soared to a 30+ year high even on the highly manipulated CPLIE measure resulting in the biggest fall in living standards since records began for the UK and probably similar for US and most western households who are in for a deep real terms drop in disposable income during 2022, with the UK set for an eye watering record plunge of over £2200 per household. Which if you remained focused on the mainstream press then you would not have seen any of it coming having been hoodwinked for the whole of 2021 by the central bank mantra of 'transient inflation' which as I repeatedly warned would turn out to be PERMANENT. However the con merchants are now playing the blame everything on Russia game, as if inflation and all of the West woes were none existant until Putin delusionally marched his amateur army into Ukraine having believed his own lies echoed by his YES Men ensuring him that victory would come within days of invasion.
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Thursday, April 07, 2022
This Recession indicator just sent a warning: here’s the takeaway / Economics / Inflation
By: Stephen_McBride
There’s a lot of fear in the markets right now.Inflation…
The war in Ukraine…
Rising interest rates…
And now the “inverted yield curve.”
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Wednesday, March 30, 2022
US Military Spending to Exceed Annual Deficits / Economics / US Military
By: Richard_Mills
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed.”
– President Dwight D. Eisenhower
The guns versus butter model portrays the relationship between a nation’s investment in defense and civilian goods. Because a country has finite resources, it must choose how much to spend on defense/ the military (guns), against the amount budgeted for items that are needed for non-defensive purposes (butter). Of course, it can also buy a combination of both, and most countries do.
The one nation that doesn’t have to bother with this, is the United States. Because the US holds the reserve currency, and all the exorbitant privilege that implies, it can spend on guns AND butter. Fact is, whenever the US government runs short on funds, it simply prints more money. Or borrows it, by issuing Treasury bills that are sopped up by domestic and foreign investors. The demand for Treasuries will always be resilient, so long as the dollar remains the reserve currency. This, however, may not be the case for much longer…
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Sunday, March 27, 2022
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing, Recession Risk 2022 / Economics / Inflation
By: Nadeem_Walayat
UK CP LIE Inflation hits 6.2%, whilst RPI that which most corporations raise their prices to has rocketed higher to 8.2% whilst real UK inflation stands at at least 15%, meanwhile across the atlantic US CP Lie inflation at 7.9 % stands on the bring of breaking above 8% with real inflation also at around 15% So much for the Pandemic deflationary depression that the clueless mainstream media had been promoting for the whole off 2020 and then sleep walked into mantra of transitory inflation of 2021, finally wakening during 2022 to what amounts to out control inflation of 2022.
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Friday, March 25, 2022
Crush inflation with These Magic Words / Economics / Inflation
By: Stephen_McBride
Are you feeling the pinch?
Inflation is getting out of hand.
I buy the same items every week at the grocery store… yet my bill has shot up 50% in the last six months.
Gas prices just hit $8/gallon here in Ireland… and the cost of heating a home jumped by roughly $500 this winter.
Today, I’ll show you the best way to crush inflation with your investments.
Hint: You want to buy companies that possess two magic words—more on that in a moment…
Wednesday, March 16, 2022
Inflation Big Picture / Economics / Inflation
By: Rambus_Chartology
One of the headlines this week was, the biggest rise in inflation since 1982. To put that into context we’ll need to look at some long term charts and what the Chartology looks like back then and today.
Right now everyone is trying to blame inflation on someone, regardless of the facts that I will present to you in the charts below. It is exactly the same thing when a Republican or Democrat is elected president. If a Republican is elected to the White House the Democrats will will say they will ruin the economy and the same thing will be said by the Republicans if a Democrat wins, it never ends.
We are going to hear the same rhetoric over and over again with inflation because most people don’t understand the big cycles that move through the markets that can last many years. We are currently seeing that in the stock markets right now that have been in a secular bull market since the 2009 crash low. Since the 2009 crash low we have had one Democrat president and one Republican as president with a new Democrat president that has been in office less than a year.
Before we look at tonights charts I would like to show you a satirical look at the, HISTORY CHART FOR THE END OF THE WORLD. What this chart shows you are all the events over the last 40 years that felt like the end of the world if you were trading the markets when they happened. Many of you were members during the 2020 crash and got to feel what an end of the world event felt like that all of the other end of the world events felt like that never worked out for the bears.
If you recall on the day of the presidential election last year I made the BOLD statement that it wouldn’t make any difference who was elected president. By that I meant that the secular bull market that began in 2009 would continue unabated into the future and as you can see it has.
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Saturday, March 12, 2022
THE 2020's INFLATION MONSTER! / Economics / Inflation
By: Nadeem_Walayat
Many investors used to buying the dip are confused as to why rallies from the dip lows keep fizzling out with stocks once more resuming a trend to fresh lows, despite many if not most stocks now trading over 50% off their highs.
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Monday, March 07, 2022
A Recession Unlike Any Other / Economics / Recession 2022
By: Michael_Pento
The U.S. economy is already deteriorating due to the humongous fiscal and monetary cliffs. These cliffs are now being compounded by the war in Eastern Europe and near record-high inflation. And, the Fed's "PUT" is much lower and smaller in size than Wall Street believes.The war in Ukraine will exacerbate the negative supply shocks that are already in place due to COVID-19. Worsening bottlenecks will combine with rising inflation to produce a contraction in global growth. Russia produces 12% of the world's oil supply and exports 18% of the world's wheat consumption. Ukraine accounts for 25% of global wheat production. Sanctions and war will serve to slow the economy further and send prices for these vital commodities even higher.
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Thursday, March 03, 2022
America’s Trade Deficit: An Enormous Concern / Economics / US Economy
By: Antonius_Aquinas
Another milestone (or more accurately millstone) was recently passed by the U.S. economy as the January trade deficit surged to an all-time record high of $107.6 billion, up some $26 billion from December’s $80.7 billion imbalance.*
Like the gigantic federal budget deficit, the trade imbalance is no longer talked about by the financial press. There has been little criticism of President Biden on either matter nor are Administration officials questioned about how things can be reversed. In fact, some commentators bizarrely contend that trade deficits show how robust an economy actually is!
The trade deficit was supposed to be alleviated by former President Trump who vowed throughout the 2016 campaign that he would rectify the situation and repeatedly ridiculed U.S. trade negotiators for their lack of financial acumen. He touted that his “friendship” with world leaders, most notably Chinese President Xi Jinping, would result in favorable trade deals for the country.
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Monday, February 28, 2022
White House Now Blames Its Inflation on “Defending Freedom” / Economics / Inflation
By: MoneyMetals
Rising geopolitical and inflation risks brought heightened volatility to markets this week.
Russia’s military incursion into Ukraine is being described as the worst attack on a European nation’s sovereignty since World War II.
In response, the Biden administration announced a new round of economic sanctions against Vladimir Putin’s government. The sanctions seek to economically isolate Russia and restrict its ability to market its products in the global economy.
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