Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Tuesday, August 25, 2009
Inflation Breeds Even More Inflation / Economics / Inflation
Thorsten Polleit writes: I. Warning Against Fiduciary Media
Early in the 20th century, Ludwig von Mises warned against the consequences of granting the government control over the money supply. Such a regime inevitably creates money through bank credit that is not backed by real savings — a type of money that Mises termed "fiduciary media."
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Tuesday, August 25, 2009
Gross National Product (GNP): How is it Calculated? What does it Measure? / Economics / Economic Theory
Prof. John Kozy writes: Although the Department of Commerce claims that GDP measures the final value of goods and services produced in the United States in a given period of time, it merely measures the income of the politically sanctioned commercial class. GDP is used as an indicator of how well that commercial class is doing; it is not a measure of the nation's well being.
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Tuesday, August 25, 2009
Gloom Versus Optimism: Is the Global Economic Recession Over? / Economics / Recession 2008 - 2010
Shamus Cooke writes: Few would consider the opinions of the world's central bankers to be unbiased or even accurate. These self-proclaimed wise men of international finance didn't see the recession coming until it blew up in their faces — a blast that destroyed their credibility.
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Tuesday, August 25, 2009
Premature Exiting From Quantitative Easing Could Derail the Economic Recovery / Economics / Quantitative Easing
There is the strong possibility that policy makers in the US and UK will not time the transition from the current quantitative easing to a more tightened monetary policy. That is not because they are no competent. It is because the task is very tricky and there is no play book outlining the steps. This is not Tom Landry (former Dallas Cowboy coach) pacing the field with a play for every situation already planned and practiced well in advance.
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Monday, August 24, 2009
Death of the Consumer / Economics / Recession 2008 - 2010
Moving forward, the most critical indicator of the viability of our economy will be consumer spending. Simply put, without a buoyant consumer, there will be no recovery. Due no doubt to the negative characteristics of consumer data, the death of the consumer is receiving scant coverage.
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Sunday, August 23, 2009
Searching for the Economic Depression and Finding It / Economics / Great Depression II
Last week I was telling a visiting filmmaker from overseas about the financial crisis and how it was getting worse. He looked at me askance. The market had just gone up, he said, and the White House was talking about an emerging recovery.
“I have been in New York before, he said, and it looks the same.”
Saturday, August 22, 2009
Lending Reversals: East and West Compared / Economics / Economic Stimulus
The chorus singing of the need to separate commodities from broader views of market movement appears to be growing again. It’s possible to separate this into “supply constraint” and “Asia rising camps”, but in general it is recognized that both come into play. Supply constraint singers realize that the mineral commodities sector was under capitalized for a long period beginning about 1980. Asia rising tunes increasingly look back to the last decade to recognize that mineral prices were already tied to Asian growth in the 1990s.Read full article... Read full article...
Friday, August 21, 2009
Debt Fuelled Economic Recovery Leading to What? / Economics / Economic Theory
Last week’s essay centered on the fact that America has borrowed nearly $12 trillion dollars yet achieved very little, if any real economic growth in the last half century. If that wasn’t alarming enough, this week’s effort should suffice to turn some heads. While last week we used the broadest monetary aggregate M3 to discount GDP, this week we’re going to take a look at velocity of circulation in the M2 aggregate and translate that into some logical conclusions. Politicians, the Conference Board and nearly every alphabet soup media outlet known to man are trying to talk this economy out of recession. We already know that talk is cheap, but I have a distinct suspicion that we’re soon going to find out exactly how cheap it really is.
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Friday, August 21, 2009
Cash for Clunkers Strategy of Destroying Working Assets / Economics / Economic Stimulus
After having given away billions faster than even the optimists had anticipated, it was announced today that the federal government's "Cash for Clunkers" program is coming to an early end. But, based on the standards of economic analysis which prevail in Washington, Wall Street and academia, the program must be considered a master stroke of public policy.
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Friday, August 21, 2009
Europe Economic Recovery, Rhetoric and Reality / Economics / Euro-Zone
Ulrich Rippert writes: In Paris and Berlin, politicians and sections of the media are speaking euphorically of an end to the recession and the start of an economic upturn.
Writing in the German business newspaper Handelsblatt, Torsten Riecke declares, “The harshest downturn since the Second World War is over. The nightmare is at an end.”
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Friday, August 21, 2009
China's False Economic Boom, What Chinese Authorities Do Not Want You to See! / Economics / China Economy
Tom Dyson writes: If the Chinese authorities had caught him making this video, they would have arrested him...
Hugh Hendry is a hedge-fund manager from Britain. Eclectica is the name of his fund. He's outspoken and critical of the establishment. You could say he's somewhat of a pariah in London's hedge-fund industry. In 2008, his fund generated 32% by making massive bearish bets...
Friday, August 21, 2009
U.S. Jobless Claims Shows Two Steps Forward One Step Back Economic Recovery / Economics / Economic Recovery
Initial jobless claims, a relatively good short-term economic leading indicator that is not subject to large and frequent revisions, have increased for two consecutive weeks (see Chart 1). Should we call off the economic recovery? In nearshore sailing on Lake Michigan, my mates and I practice the "ten minute rule." That is, if the wind velocity changes such that it might be advisable to put a reef into or shake one out of a sail, we wait ten minutes before putting down our beer.
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Thursday, August 20, 2009
Deflation Denial In Spite Of Overwhelming Evidence / Economics / Deflation
In response to Misguided Worries About Inflation I received an email from "GR" telling me "The deflation metaphor is not playing out. Every month the things I consume go up in price."
He pointed numerous price increases, including gasoline, up a nickel in a week.
Thursday, August 20, 2009
The Bounce Is Aging, But The Depression Is Young / Economics / Great Depression II
Bob Prechter writes: The following is an excerpt from Robert Prechter's Elliott Wave Theorist. Elliott Wave International is currently offering Bob's recent Elliott Wave Theorist, Free!.
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Thursday, August 20, 2009
O Obama, Where is the Economic Recovery? / Economics / Recession 2008 - 2010
Bill Bonner writes: Oh woe! Oh woe!
O! Bama! Where is thy recovery?
Yesterday, the world’s stock markets took a hit. The Dow lost 186 points…following a very bad showing in China.
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Thursday, August 20, 2009
U.S. Needs Cash for Clunkers for the Housing Market / Economics / Economic Stimulus
Mark R. Crovelli writes: Over the past six months, one of the most amazing and miraculous events has occurred in the history of economics. Few Americans appear to have grasped how truly remarkable and miraculous the event truly was, even though it occurred right under their noses. The miraculous event to which I refer is our far-seeing leader’s program designed to 1) trick Americans into buying new cars they can’t afford, and 2) melt down their old cars, intentionally destroying them. Or, as the program has been termed by its brilliant originators, it’s a "Cash for Clunkers" program.
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Thursday, August 20, 2009
Are we in a Consumer-less Economic Recovery? / Economics / Economic Recovery
Consumers are less optimistic about their own personal finances than at any time in the past 60 years, according to an index of consumer sentiment released Friday. (From the Christian Science Monitor, August 15th).
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Thursday, August 20, 2009
If Inflation Is a Monetary Phenomenon, Is U.S. Hyperinflation a Clear and Present Danger? / Economics / Inflation
We hear a lot of concern that the Fed's mushroomed balance sheet over the past two years is setting the stage for a 1970s' style inflation here. So long as we have a fiat (a.k.a. Chrysler?) monetary standard, the threat of hyperinflation always lurks. But is the stage currently being set for such an eventuality? I do not think so.
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Wednesday, August 19, 2009
An Analysis of Production and Consumption Based Economic Stimulants / Economics / Economic Stimulus
Fred Buzzeo writes: A Double Shot of Espresso ?
When I begin to feel sluggish and low on energy, I stop by the local café and order a shot of a true, time-tested stimulant- a double espresso. Within minutes, I begin to feel energized and ready to move full speed ahead. So it seems that an economic stimulant might not be such a bad idea- especially for a sluggish economy or one on the verge of collapse.
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Wednesday, August 19, 2009
Don't Fall for the Deflation Hype, Beware Inflation Remains a Threat / Economics / Inflation
So deflation's not all bad after all then.
The average commuter will see the price of a season ticket fall by around 0.4% next year, after the annual rate of retail price index inflation came in at -1.4% in July. It might not sound like much of a price cut, but it's a damn sight better than the 6% raise most had to pay out this year.
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