Economy

Canadians are becoming increasingly vulnerable to a housing correction, exposing them to a perfect storm of high debt and falling assets, the Bank of Canada warns...suggesting that many Canadians have constructed their finances on a house of cards, with ever rising home values the key and vulnerable support. [Sound familiar?] Words: 770

There's been a major swing in what people now fear the most for the U.S. economy. Take a look. Words: 255

Despite the practical impossibility of real comparisons we know perfectly well that the value of a dollar or a pound, shekel, rouble or euro isn’t what it used to be...This fact, however, doesn’t stop us from almost exclusively focussing on how much money we have today rather than what it can purchase for us: we think about money in nominal terms rather than real ones [- and that is what is known as money illusion. Let me explain.] Words: 873

The stock market and inflation expectations remain joined at the hip. As the crowd anticipates higher inflation, the stock market rallies, and vice versa. This positive correlation between inflation and stock prices (a proxy for the economic outlook) won’t last forever and it’s anyone’s guess when [that will be but I have my views on it if you are so interested]. Words: 557

You might be able to predict the economy from the stock market, but you can’t do it the other way around. [As such,] ignore economists trying to forecast the market because the market knows better what is going to happen with the economy than even the leading indicators. [In fact,] the stock market leads the LEI by about a month. [Let me substantiate my words.] Words: 333

Currency wars arise when a country steals growth from trading partners by cheapening its currency to promote exports. The new currency war began in 2010 when President Obama declared in his State of the Union address that it was the policy of the United States to double exports in five years. Since the U.S. would not become twice as productive in five years, the implication was the U.S. would severely cheapen its currency to achieve this goal. [Let me expand upon this.] Words: 666

Much of what we see and don’t see regarding the modern-day tragedy that is Greece, is all about perserving the dream of a pan EU/European nation state, a United States of Europe if you will, rather than about bailing out the foreign bank holders of European sovereign debt. Let me explain my perspective. Words: 627

The ownership premium in Canada's largest cities is unprecedented, dangerous to new buyers, and unlikely to persist - and if analogies to the U.S. situation at its peak back in 2005 are at all valid, this is bad news. [Let me explain.] Words: 430

I respect many of the writers who believe that we will experience hyperinflation... but I think they are jumping the gun. Hyperinflation is something that is easy to say - and it certainly achieves the sensational headlines that so many financial writers seek - but it is much more difficult to achieve. At this point none of the economic or political factors required to set off hyperinflation are present. The question should not be whether or not it is possible, but whether or not it is probable in America today and in my opinion the probability of such happening is very low. [Let me explain why that is the case.] Words: 2695

Our government is broken. Our economy is broken. Our infrastructure is crumbling. Our major institutions — education, religion, culture — are inadequate to the tasks at hand. These are all signs of an old world passing away and clearing the way for a new one to arise in its place. The sooner we let go of our assumption that going back is desirable, or even possible, the sooner we’ll be able to fully embrace the new things that lie ahead. [Let me explain.] Words: 1891