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Deflation Is Blowing In On An Eastern Trade Wind
Deflation Is Blowing In On An Eastern Trade Wind Jack Delano “Lower Manhattan seen from the S.S. Coamo leaving New York.” 1941 Brexit is nowhere near the biggest challenge to western economies. And not just because it has devolved into a two-bit theater piece. Though we should not forget the value of that development: it lays bare […]
We Need the Pain that Comes with More Saving
We Need the Pain that Comes with More Saving The endgame of monetary side manipulations is upon us. Since 2008, central banks have done what they thought was needed to bring the markets back from the pain they experienced during the crash. The problem, of course, is that these Keynesians and Monetarists placed the high […]
Deutsche Bank Discovers Kuroda’s NIRP Paradox
Deutsche Bank Discovers Kuroda’s NIRP Paradox Last October, BofA looked at Europe’s €2.6 trillion in negative-yielding debt and discovered something “stunning”: Savings rates were going up not down. Don’t believe us, just have a look at these three charts: But how could that be? By all accounts – or, should we say, by all conventional Keynesian/ textbook accounts – […]
Why NIRP (Negative Interest Rates) Will Fail Miserably
Why NIRP (Negative Interest Rates) Will Fail Miserably What NIRP communicates is: this sucker’s going down, so sell everything and hoard your cash and precious metals. The last hurrah of central banks is the negative interest rate policy–NIRP. The basic idea of NIRP is to punish savers so severely that households and businesses will be compelled […]
The Increasingly Fragile Upper-Middle Class
The Increasingly Fragile Upper-Middle Class Many of these apparently high incomes are completely absorbed by high-cost upper middle class expenses. Since the top 10% takes home 50% of all household income, it follows that this top slice has most of the discretionary cash, i.e. net income left after taxes, servicing debt and paying for essentials […]
Three Reasons to Be Worried About the Economy
Three Reasons to Be Worried About the Economy On January 12, America’s central planner-in-chief gave his State of the Union address. The president promised nothing less than to feed the hungry, create jobs, shape the earth’s climate, and make everyone a college graduate. There’s nothing new here, though. We’ve heard variations of this silly song […]
The Fed’s 2% Inflation Fairytale—–Who Made It Up And What Does It Mean?
The Fed’s 2% Inflation Fairytale—–Who Made It Up And What Does It Mean? Once upon a time, not too long ago, central bank wizards began telling a fairytale that economies need inflation. But not just any inflation. In their Goldilocks make-believe world, the not too hot, not too cold, just right dose of two percent […]
SPR To Be Used To Raise Cash For US Gov
SPR To Be Used To Raise Cash For US Gov The U.S. Congress is moving on a budget deal to avert a standoff over raising the debt ceiling, at least until 2017. The emerging budget deal calls for some modest increases in government spending, including on defense, along with some tweaks to Social Security and Medicare. But […]
An Important Economic Indicator – Money Velocity – Crashes Far Worse than During the Great Depression
An Important Economic Indicator – Money Velocity – Crashes Far Worse than During the Great Depression Underneath the Propaganda, the Economy Is In BAD Shape … We noted 3 years ago that the velocity of money – an important economic indicator – is lower than during the Great Depression. Things have gotten even worse since since […]
How To Spot A Bubble
How To Spot A Bubble We’ve been entertaining ourselves to no end the past couple days with a ‘vast array’ of articles that purport to provide us with ‘expert’ opinion on the question of whether we are witnessing a bubble or not. Got the views of Goldman’s David Kostin, Robert Shiller, Jeremy Grantham, Jeremy Siegel, […]
Money for Nothin’ and your Chicks for Free – and your Houses too!
Money for Nothin’ and your Chicks for Free – and your Houses too! Nothing Against the Old We would like to preface today’s Diary with a clarification: We don’t have anything against old people. We don’t have anything against high GDP growth rates either. But the two don’t go together. Some of this opinion comes from looking […]
Crushing The “Lower Gas Price = More Spending” Fiction | Zero Hedge
Crushing The “Lower Gas Price = More Spending” Fiction | Zero Hedge. Caveats to the equation: lower gas prices = more spending Aside from the long-standing issues of minimal income growth and lackluster job creation, consumers have become accustomed to an end-of-the-year price reprieve at the pump, and in some cases are simply using the increased […]
