Fri - August 10, 2007Is the End Game on the Economy Approaching?The Federal Reserve, trying to calm turbulent
asset markets, announced Friday that it will pump as much liquidity into the
U.S. financial system as is needed to prevent the ills of ever tightening credit
crunch. In keeping with this goal, the Fed dropped $38 billion of "temporary
reserves" into the system.
Posted at 08:54 PM Read More Mon - June 12, 2006Economy at the height of boomWe had all better enjoy the summer months,
because the economy almost certainly will begin getting worse by the fall.
Already, signs of rising inflation are becoming so persistent, that even Fed
chairman Bernard Bernanke has been forced to worry about it in
public.
Posted at 10:28 PM Read More Sun - April 9, 2006Oil demand cannot be met at current paceFinally, someone has hit the nail on the head.
Christophe de Margerie, head of exploration for Total and heir presumptive to
the French energy multinational, has stated quite clearly what should be obvious
right from the start: that the world lacks the means to produce oil to meet
rising demand over the next decade.
Posted at 02:30 PM Read More Thu - January 26, 2006"The Economist" not bullish on GreenspanIn an article entitled "Monetary Myopia" in
The
Economist, the editors of
the British news and economics magazine take aim at Alan Greenspan, whom they
say is over-rated. "On Mr Greenspan's watch, America has also experienced the
biggest stockmarket and housing bubbles in history,"
The
Economist points out. "Presiding over one
bubble could be seen as bad luck; presiding over two smacks of carelessness. The
Greenspan era will not end on January 31st. Instead, his legacy will linger in
the shape of the biggest economic imbalances in American history: a negative
household saving rate and a record current-account deficit. Until these
imbalances unwind—a process that could prove painful—it is too soon
to applaud Mr Greenspan's record."
Posted at 05:05 PM Read More Tue - November 29, 2005Economy Heating UpThe economy
appears
to be doing well. Of course, the operative word here is
appears.
What we have going on right now is the classic late stage of an inflation
created boom, right before things begin to turn for the worse. Employment is up,
interest rates still fairly low, people are beginning to feel comfortable, even
gas prices are going down—though, to be sure, they're still rather high.
What, then, does anyone have to worry about? Everything's fine, right? Well, not
quite.
Posted at 04:04 PM Read More Sun - October 30, 2005Bernanke to replace Greenspan as Fed ChairmanEveryone knew that Greenspan could not go on
forever as Fed chairman. He would be eighty next year, and it is clear that
another four years at the Fed might be more than an octogenarian can handle. So
Greenspan plans to retire at the beginning of next year. He will be replaced by
Ben Bernanke, a former Princeton economist.
Posted at 04:46 PM Read More Fri - October 14, 2005Housing market teetering towards a collapseBy all indications, the housing market has
entered the final stage of its boom and will soon experience the usual
bubblenomics crack-up. We see this quite clearly if we glance at the loan
market, where lenders are recklessly pushing risky loans to keep the market
going.
Posted at 02:25 PM Read More Tue - October 4, 2005Deurbanization: Then & NowIn a previous blog, I drew parallels to the
economic decline of Rome with the impending economic decline of America. Another
parallel could be drawn to take in the issue of deurbanization. Rome was
preeminently an urban empire. It's power was founded on cities, particularly
Rome itself. But when the price of slaves rose, labor shortages in the country
caused an exodus from the cities to the country.
Posted at 05:09 PM Read More Tue - September 20, 2005Economic regression: Rome and America comparedHere in Eureka, CA, gasoline sells at $3.15 a
gallon. It cost me over $40 to fill-up a Nissan king-cab pick-up. The recent
rise in gas prices marks the end of cheap oil. Since our entire economy depends
on cheap oil and is unsustainable without it, the end of cheap oil will likely
bring about the greatest period of economic regression since the decline and
fall of the Roman Empire.
Posted at 11:07 PM Read More Tue - September 6, 2005End of Cheap OilThe American economy—and indeed, the entire
economy of "Globalism"—depends on cheap oil. But the era of cheap oil is
coming to an end. The pressures of rising oil prices are posed to force a very
painful and perhaps catastrophic adjustment on all of us.
Posted at 04:21 PM Read More Wed - May 18, 2005Chinese imports and the price of oilContainer shipments through the port of Long
Beach, CA have rose 22% in April. The total number of containers rose by nearly
100,000 containers since a year ago (from 441,061 to 538,501). A great many of
these containers come from China, which has been flooding the American market
with cheap consumer goods for years. To facilitate this immense trade imbalance,
China has been manipulating its currency by linking the value of the yaun to the
U.S. dollar. The Bush Administration just this week issued another warning to
China about what it has termed "unfair" trading practices and then quickly
proceeded to restrict Chinese clothing imports.
Posted at 05:28 PM Read More Sun - May 1, 2005"Recovery" continues to elude economyAfter rallying earlier in the week, stocks to
another fall on Thursday—despite robust earnings from big industrial
companies. Earnings or no earnings, it appears that first-quarter growth came
below expectations. Surprise, surprise.
Posted at 12:47 AM Read More Wed - March 16, 2005Greenspan argues for boosting savingsFed chairman Alan Greenspan, in a Senate hearing
Tuesday, warned of serious economic consequences unless growth in Social
Security and Medicare is not restrained.
Posted at 02:09 AM Read More Sun - March 13, 2005Bankruptcy advisors hiring extra staffAccording to
Financial
Times, fears that the current global
credit boom could lead to a surge in business failures has caused companies such
as PWC, the largest corporate recovery advisor, to hire additional insolvency
specialists. Here is a direct quote from the
Financial
Times article:
Posted at 05:11 PM Read More Thu - February 24, 2005Durable Orders Fall 0.9%While it certainly cannot be described as
tremendously bad news, it still must disappoint the economic optimists. The
economy still can't seem to take off. The good indicators are always balanced by
bad ones. Here we find durable goods orders falling. Only about a percent, but
still they're declining. A decline in durable goods orders is often seen as an
indication that the economy is about to experience a downturn.
Posted at 11:36 PM Read More |
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