Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Wednesday, July 02, 2008
The Deadly Economic Force of Debt Deflation / Economics / Deflation
By: Dr_William_R_Swagell
Crunch Time for Debt - “Consumer boom shows US out of the woods... Despite the jump in energy prices and the related collapse in measures of consumer confidence, retail sales rose by 1.1 per cent on the month, the strongest gain since November...If there were going to be a US recession in response to the credit crisis, it would have started by now. So let me stick my neck out and say without qualification the US is out of the woods.” Anatole Kaletsky , The Times June 18th 2008.
Thank Heaven for the resilient US consumer, soldiering on stoically under an enormous burden of debt.
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Wednesday, July 02, 2008
Global Recession Gathers Pace as Euro zone Manufacturing Contracts / Economics / Euro-Zone
By: Mike_Shedlock
The global recession is picking up steam. The US is in contraction, U.K. Manufacturing Is In Contraction , and now Euro zone manufacturing activity is in contraction .
The euro zone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, slid to 49.2 points in June, from 50.6 in May, up slightly from an initial estimate of 49.1.
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Tuesday, July 01, 2008
Gold Standard University Live: R.I.P. / Economics / Fiat Currency
By: Professor_Emeritus
Farwell Address: The Inaugural Session of GSUL took place in February, 2007, at the Martineum Academy in Hungary. Subsequent sessions, including one in Dallas, Texas, showed a healthy increase in attendance, on average by fifty percent. Still, I am now forced to announce that Session Four in Hungary in July, and Session Five in Canberra, Australia in November will be the last. GSUL will fold tent as its sponsor, Sprott Asset Management, Inc., has withdrawn its financial support. Mr. Eric Sprott said in his letter that “we weren't attracting enough interest to justify that ongoing expenditure”. Read full article... Read full article...
Tuesday, July 01, 2008
UK Manufacturing Output Contracts Sharply as House Prices Plunge / Economics / UK Economy
By: Mike_Shedlock
Yesterday I reported Deflationary Hurricanes to Hit U.S. and U.K. Confirmation that the U.K. is about to follow the U.S. in recession is at hand.Bloomberg is reporting U.K. Manufacturing Contracts Most Since 2001 .
U.K. manufacturing contracted in June by the most since 2001, a sign higher credit costs and soaring commodity prices are bringing the economy closer to a recession.
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Tuesday, July 01, 2008
Its Inflation NOT Deflation, US Heading for Sharply Higher Interest Rates / Economics / US Interest Rates
By: David_Petch
It is the end of the week and the start of a long weekend up here in the Great White North, so today's commentary will be brief. Oil climbed overnight to peak at $141.71/barrel and this is likely not set to slow down yet until something breaks. Continue to stock up on dry goods such as rice, whole-wheat flour, powdered milk, brown sugar etc. because prices are going much higher. Many of the countries around the globe with currencies pegged to the US dollar have been forced to depreciate them via interest rates and fiat expansion to keep at a preset level. This has caused prices to rise higher than anticipated and many such nations are being forced to raise interest rates. Read full article... Read full article...
Monday, June 30, 2008
Regional Velocity of Inflation a Consequence of US Trade Deficit / Economics / Inflation
By: John_Mauldin
I mentioned in last Saturday's letter a report by Louis Gave of GaveKal fame on whether inflation may be waning and its importance. Louis gave me permission to use it as this week's Outside the Box. It is typical of the thoughtful analytical work they do.
Louis and his partners and associates at GaveKal write some of the more thought-provoking material I read. They really challenge my position on numerous matters, causing me to look at many items from a different view. That of course, makes this particular piece good for Outside the Box. Whether you agree or disagree, you need to know why you hold a position. If you can't articulate the "against," how can you be sure you truly understand the "for"?
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Monday, June 30, 2008
Deflationary Debt Deleveraging Hurricanes to Hit US and UK / Economics / Deflation
By: Mike_Shedlock
Congratulations (of sorts) go to the UK as British household debt is highest in history . British households are now more indebted than those of any other major country in recorded history, it has emerged.
Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.
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Monday, June 30, 2008
Economic Forecasts and Analysis For US Financial Markets (June 30-July 4) / Economics / US Economy
By: Joseph_Brusuelas
The country may be celebrating its independence, but the markets will see a week of very important data and an address on the financial crises and the economy from the Fed and US Treasury. The major events of the week will be the publication of the June non-farm payrolls report on Thursday. Wednesday will see an address on the economy by US Treasury Secretary Paulson and a talk on the current global financial disruption by FOMC Gov. Mishkin. Read full article... Read full article...
Saturday, June 28, 2008
The Slow Motion Recession, Inflation, Deflation and Stagflation / Economics / Stagflation
By: John_Mauldin
"We appear to be entering a period of serious stagflation with sharply rising expected and actual inflation combined with large downside risks to growth and employment."
"I would argue that what we are seeing is an acceleration of expected consumer price inflation in the context of a sharp expansion in global liquidity. It is hardly surprising that the prices of those commodities, such as oil, for which the short-run price elasticities of supply and demand are low move upwards strongly when there is a rise in expected general inflation.
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Friday, June 27, 2008
World Recession 2009 as a Result of Peak Oil / Economics / Recession
By: Brian_Bloom
Whilst most people are vaguely aware that oil is important to the world economy, few understand the true impact of the recent rise in the oil price.
In 1998 the heads of state of the USA and Australia failed to ratify the Kyoto protocols. They were trying to protect their country's economies. Ironically, they engineered a situation where not only is the US economy under greater threat than it would have been had our leaders ratified the protocols, the entire world economy is now seriously threatened.
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Friday, June 27, 2008
Peak Credit Has Arrived- Forget Inflation We are in Deflation / Economics / Deflation
By: Mike_Shedlock
The Marlin Company 14th Annual Attitudes in the American Workplace Poll reports the following results on June 24. More than one third (41%) of US workers are cutting back on utilities, nearly half have reduced food purchases (48.5%) and a large percentage are buying less clothing.
The national survey of US workers, conducted May 12-14, 2008, also found that younger workers (between the ages of 18 to 29) are being hit the hardest by the economy and are the most desperate about their economic future. More than one third (34.3%) of young American workers say their financial situation has caused them to “feel hopelessness or despair about their economic future.” That compares with 28.8% of workers age 30 to 49, 23.5% of workers 50-64 and 17.9% of workers 65 or older.
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Thursday, June 26, 2008
The Nondefense Market for Durable Goods - The Big Picture / Economics / US Economy
By: Paul_L_Kasriel
Chart 1 shows that in May, shipments of durable goods excluding defense were down year-over-year 4.4%; new orders for the same were down 4.3%. Both started to soften in late 2006 when the tentacles of the housing recession began squeezing other sectors of the economy. The housing recession is taking its toll on the demand for discretionary consumer goods, which is reflected in the contraction in durable goods activity.Read full article... Read full article...
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.
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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."
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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.
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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.
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