Economy

We’ve all heard countless times from mainstream economists, policymakers, and their ilk that America is somehow immune from consequences. They always pin their argument on the dollar standard. ‘Our’ central bank issues the reserve currency of the globe and that alone immunizes us from any repercussions. The 25% unemployment of Spain and Greece? The 50% unemployment among the young people in Spain? Forget about it! Never going to happen here because our paper is better than everyone else’s. Right? Sounds good, but only if you take them at their word and ignore the realities that lie just under the surface. [Let's take a closer look those realities.] Words: 2220

Until policymakers see the light, it's very slow and steady as she goes, with a chance of higher inflation on the horizon. This is not necessarily bad for the stock market, however, since I continue to believe that both stocks and bonds are priced to the expectation that growth will be very weak or even negative in the years to come. Words: 696

Financial repression occurs when governments channel funds into their own sovereign bonds in order to reduce debt levels through mechanisms such as directed lending, caps on interest rates, capital controls, debt monetization, or by other means. The promise of financial repression is that it will hold down government borrowing costs and reduce government debt levels, but critics argue that financial repression merely targets the producers of society, i.e., the middle class, and therefore harms the economy. Let's take a look at financial repression ands its supposed pros and cons. Words: 1486

Total sales for the season are projected to be at $586 billion - a 4% increase over last year - and this year, mobile is going to make a big impact on just how that money gets spent. We've gathered a wealth of data relative to this year's holiday retailing season, specifically as it pertains to online and mobile behaviors, and you'll find that data in this infographic

In his effort to get lawmakers to mobilize, Federal Reserve chairman Ben Bernanke coined the term “fiscal cliff” in a testimony before the House Financial Services Committee on February 29, 2012. Investors consider it to be one of the biggest...risks that could cause markets to crater but since February, analysts have pointed to a host of other “cliffs” that threatened to destabilize the markets and the economy. Here are 8 others that people are talking about most. Words: 1140

China’s miracle is driven by one thing and one thing only: its trade surplus with the U.S., which went from zero in 1990 up to now more than $300 billion a year [but] since the darkest hours of the 2008 global economic meltdown, China has made little progress in shifting its reliance away from exports, and, as a result, the Chinese economy is dangerously exposed to a renewed downturn in global trade. Words: 500

It's easy to find analysts and investors who are certain that a deal [to avoid the fiscal cliff] will be reached, or at least that the can will be kicked down the road to buy more time. It's also easy to find more pessimistic views that are based on the lack of cooperation in the past, and a deeply polarized country and political system. However, I think many are missing the point, which is that austerity is coming to America - taxes are going up and government spending will be reduced - [and. as such,] the United States is likely to face a recession and market correction in 2013, regardless of whether or not a compromise is reached over the Fiscal Cliff. Words: 970

If Congress addresses the issue by maintaining the current tax and spending policies we will get more of the same economy we have experienced for the past three years (all else being equal). [That being said,] what if Congress goes over the fiscal cliff hit? This blog post is designed to asses the impact. Words: 1362

The (relative) impact on economies around the world would be major but particularly on Canada, Mexico and to a lesser extent on some other economies in a precarious state –- the UK, Germany, China, and Japan. [The details are illustrated, country by country, in a map below. Take a look.]

The term “fiscal cliff” was first coined by Ben Bernanke in early 2012, and it refers to the roughly $718 billion that will be withdrawn in some way, shape or form (4.6% of our nation’s annual economic output) from the economy in 2013. This will occur in the form of tax increases and federal spending cuts. If nothing is done, and all the scheduled tax increases and spending cuts go into effect on January 1, the Congressional Budget Office estimates that the economy will contract slightly in 2013. Other estimates (including ours) show a much deeper recession would be likely. Words: 940