Tuesday , September 17 2019
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Tag Archives: Spending

Economic Theories & Debt Driven Realities

One of the most highly debated topics over the past few months has been the rise of Modern Monetary Theory (MMT). The economic theory has been around for quite some time but was shoved into prominence recently by Congressional Representative Alexandria Ocasio-Cortez’s “New Green Deal” which is heavily dependent on massive levels of Government funding. There is much debate on both sides of the argument but, as is the case with all economic theories, supporters tend to latch onto the ideas...

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Setting Up For More ‘Residual Seasonality’ Not Inflation

Without crude oil on an upswing, inflation can only be on the downswing. That may seem like a tautology of sorts, but it’s not. In fact, those advocating for the optimistic economic case have been predicting consumer prices being directed by something other than oil. I know it’s a broken record, but here it is again: labor shortage, competition for workers, wages explode, and companies across-the-board raise their prices to offset the increased costs. The key to that last part, if it was to...

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Frozen In Time, The Wrong S-Curve

As usual, Paul Krugman starts out with a serious attempt at answers before detouring into his current profession. Dr. Krugman used to be an Economist, and a pretty good one too (for whatever that’s worth). Nowadays, he employs his New York Times column as a mouthpiece for really blatant politicking. It isn’t even so much an arm of the Democratic party as it is raw anti-Republican. That’s too bad because by betraying these instincts he ends up doing so much disservice. He wrote a column back...

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Not Stealth Taper, Scared Taper

Just like Jay Powell is surely hoping for some help from Mother Nature, the central bankers at the BoJ have to be wishing for more on their side of the Pacific. The US Federal Reserve will be looking for a repeat of last year’s Harvey and Irma effects out of Florence. It looks like they’ll need them. Japanese officials have been aided now twice in 2018 already, with inflation perking up again in August. Japan’s CPI rose 1.3% year-over-year last month. It was the first time above 1% since the...

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Scrooge’s Income ‘L’

We keep revisiting the concept of “residual seasonality” quite purposefully, even though on its face it is an absurd one. It is in every way emblematic of the current state of Economics and the commentary derived from it. Residual seasonality is the kind of delusion that has become commonplace, a coping mechanism for an economy that continues to be very different from how it “should” be working. It’s the real economy parallel to 2a7, tax reform corporate profit repatriation, or whatever...

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The Einstein Stimulus Equation

The housing bubble began to reverse in the middle of 2006. Strangely, Economists presented with the possibility were almost uniformly confident that it wouldn’t matter. Forgetting the market and liquidity issues, even by the middle of 2007 it was clear the end of the housing bubble had already restrained economic growth. Confidence abounded anyway, largely a result of the mistaken belief that the Federal Reserve could and would cushion any downside. By early 2008, that confidence started to...

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Bi-Weekly Economic Review: Housing Market Accelerates

The economy ended 2017 with current growth just slightly above trend. In general the reports of the last two weeks of the year were pretty good with housing a standout performer going into the new year. We are still trying to get past the impact – positive and negative – from the hurricanes a few months ago though so it is probably prudent to wait for more evidence before making any definitive pronouncements about the economy. While the data has been good lately the reaction in...

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New York state paves the way for big infrastructure

Six months into Donald Trump’s presidency and not a single infrastructure project has been approved as a result of any efforts by him and his administration. It is all talk, so far, even though it was a cornerstone of Trump’s campaign and also that of his Democratic rival Hillary Clinton. Both candidates painted pictures of the entire country being completely starved of infrastructure spending and, while it is true that much of the US’ infrastructure is crumbling, renewal is...

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