Global Market Commentary, Analysis and Investments
The agreement reached to raise the US government debt ceiling may mark the beginning of the kind of “deer in the headlights” policy freeze described in the last chapter of The Dollar Crisis. If that agreement is fully implemented, this depression is going to become considerably worse.
The following excerpts are taken from The Dollar Crisis, Chapter 20: Bernankeism, written in December 2004.
[Read more...]Unemployment is a favorite topic of conversation of late, especially among those who are unemployed. I assume it gives them something to do other than watch their lives going down the toilet as the federal government continues with unbelievable levels of deficit-spending and the Federal Reserve continues to create staggeringly more money so that it can be borrowed by the government and then spent, all of which makes prices rise.
[Read more...]Faced with crisis, the White House and Congress turned to fiscal stimulus that's not only itself unsustainable, but that's also unable to provide a firm foundation for lasting recovery.
Sooner or later, the US will have to pay the piper in the form of reduced government services, some more needed than others, and substantially higher taxes for households and businesses. This is one trillion-plus-dollar beast that could stand to benefit from a leak.
[Read more...]We just stepped off the plane… Well have to catch our breath and open our eyes before we have anything to say about China…
In the meantime, lets look back at what is happening in Europe and America.
And we will begin by thanking Paul Krugman, economiste ordinaire at The New York Times.
[Read more...]The final installment of our speech in Las Vegas…on why you cant engineer a genuine recovery…and why GDP is just a number…and why China will blow up…
The problem with trying to engineer a recovery is the same problem with all central planning it substitutes the honest signals from the marketplace with imposters. For example, instead of getting the message that they need to conduct their business in a different way, the banks get the idea that the feds will always bail them out…and automakers thanks to the Cash for Clunkers program may get the idea that there is more demand than there really is…and everyone could get the idea that the economy is healthier than it really is, thanks to the feds $1.5 trillion deficits.
[Read more...]India’s inflation in food prices has been soaring lately — holding for weeks above 17 percent — due to a combination of factors including the weakest monsoon rains in nearly 40 years, new taxes on gasoline and diesel, and increased excise taxes on a wide variety of products.
From BusinessWeek:
[Read more...]Last August, it was reported that deflation in Japan had reached a new record. Prices were dropping at the fastest pace 38 years. By November, it was duration, rather than depth, that got the presss attention. Prices had been going down for 10 months in a row. Then, last week an update:
Japan Deflation Hits a Record Pace, reported the BBC. Prices in Japan were falling faster than they ever had since they began keeping track in 1970. The tide has gone out so far; beachcombers cant remember when there was so much beach to comb. But what follows is not offered as a prediction, but only out of curiosity. We dont know how this will turn out. Could it end in hyperinflation? Maybe.
[Read more...]Americas president proposes a tax credit to businesses that take on new employees. We never met a tax cut we didnt like. This one is no exception. It lowers the cost of labor, making it easier to hire and pay people. So far, so good.
But is Mr. Obama proposing to cut government spending also? Not really. Hes pretending that the feds can have their cake and eat it too…that they can forgo the income given up by the tax credit…and yet, still spend it.
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Stay Short!
The global economic backdrop continues to provide many reasons to sell stocks, but very few reasons to buy them — gold stocks being one of the few exceptions.
The weight of US economic data points to a recessionary environment over the next few quarters. Analysts have not cut their 2011 and 2012 earnings estimates far enough to reflect the recent dramatic deterioration in economic conditions.
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