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Tag Archives: Economics

Why U.S. Commercial Real Estate Is Another Dangerous Bubble In The Making

While most people – including mainstream economists – seem to believe that our bubble problems ended when the U.S. housing bubble burst in 2008, the reality is that there are even more bubbles forming today than before the Great Recession. I listed the bubbles that I am warning about in a detailed piece that I wrote last week called “Why You Should Not Underestimate The Severity Of The Coming Recession.” I believe that the bursting of these numerous bubbles is likely to cause another...

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One Trick Pony: The Fed Is Pushing On A String

Last week, I discussed the Fed’s recent comments suggesting they might be closer to cutting rates and restarting “QE” than not. “In short, the proximity of interest rates to the ELB (Effective Lower Bound) has become the preeminent monetary policy challenge of our time, tainting all manner of issues with ELB risk and imbuing many old challenges with greater significance.   “Perhaps it is time to retire the term ‘unconventional’ when referring to tools that were used in the crisis. We...

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Here Are The Recession Warning Signs To Watch

Last week, I wrote a detailed piece in which I explained that U.S. recession risk was rising quite rapidly and that the coming recession is likely to be far more severe than most economists expect because there are so many dangerous new bubbles inflating currently and because the global debt burden is much worse today than it was before the Great Recession. In the current piece, I will show more warning signs of the coming recession as well as discuss reliable recession indicators to keep an...

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Who Is Funding Uncle Sam?

In, The Lowest Common Denominator, we quantified the extent to which growth of consumer, corporate, and government debt has greatly outstripped economic growth and our collective income. This dynamic has made the servicing of the debt and the ultimate pay back increasingly more reliant on more debt issuance. Fortunately, taking on more debt for spending/consumption and to service older debt has not been a problem. Over the past twenty years there have been willing lenders (savers) to...

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Socialism Rises Due To The Great American Economic Growth Myth

There is little denying the rise of “socialistic” ideas in the U.S. today. You can try and cover the stench by calling it “social democracy” but in the end, it’s still socialism. Since 1775, millions of Americans have given their lives in defense of the American “idea.” The tyranny and oppression which arise from communism, socialism, and dictatorships have been a threat worthy of such sacrifice. I am sure those patriots who died to ensure the “American way of life” would be disheartened by...

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Is The “Sellable Rally” Done? 06-07-19

Is The Sellable Rally Done? Some Comments On The Fed Cutting Rates Sector & Market Analysis 401k Plan Manager Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud,Seeking Alpha Are YOU: Age 60 and over. • Concerned about retirement health care expenses. •Recently retired, or planning to retire soon. • Wanting to understand how to begin making important Medicare decisions.  Then this “Lunch & Learn” is for you. Class size is very limited so register now Is The Sellable Rally...

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Why You Should Not Underestimate The Severity Of The Coming Recession

The financial world has been buzzing nervously about the rapidly rising risk of a recession as warning signs mount. Though many mainstream economists and commentators are finally starting to concede that a recession in the next year or two is likely, almost all of them downplay the likely severity of the coming recession by saying “but it will be short-lived!” and “we’re due for a healthy slowdown after a ten year expansion!” (economists were saying the same thing in 2006 and 2007 too). My...

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The Fed, QE, & Why Rates Are Going To Zero

On Tuesday, Federal Reserve Chairman Jerome Powell, in his opening remarks at a monetary policy conference in Chicago, raised concerns about the rising trade tensions in the U.S., “We do not know how or when these issues will be resolved. As always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective.” However, while there was nothing “new” in that comment it was his following statement that sent “shorts”...

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The Trade War Is Threatening To Pop Hong Kong’s Property Bubble

The escalating trade war between the U.S. and China is creating numerous unintended consequences around the world and this conflict may only be in its infancy. One of those serious risks is that that the trade war may burst a massive property bubble that has been developing in Hong Kong over the past decade, as Bloomberg reports – Record high home prices in Hong Kong have prompted some economists to forecast a bursting of the bubble.Residential property values in the city reached an...

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Pulling Forward versus Paying Forward

Debt allows a consumer (household, business, or government) to pull consumption forward or acquire something today for which they otherwise would have to wait. When the primary objective of fiscal and monetary policy becomes myopically focused on incentivizing consumers to borrow, spend, and pull consumption forward, there will eventually be a painful resolution of the imbalances that such policy creates. The front-loaded benefits of these tactics are radically outweighed by the long-term...

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