Economy

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“fiscal cliff” was first coined by Ben Bernanke in early 2012, and it refers to the roughly $718 billion that will be withdrawn in some way, shape or form (4.6% of our nation’s annual economic output) from the economy in 2013.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

None of the three different statistical measures of financial stress released this week suggest any conditions in the financial markets that would indicate that the U.S. economy is in a recession already, and none of them are exhibiting any upward trends that would point to a pending recession. In fact, all three stress measures have been trending downward through 2012, indicating that there is less financial stress now than at the beginning of the year. [Take a look at what each has to say and judge for yourself.] Words: 571

The election is now behind us and I pray our elected officials can come together and make quality decisions to move this country forward in a positive direction. [That being said, how the U.S. Dollar Index reacts over the short term] is going to be very important for portfolio construction in the weeks and months ahead! [Let's take a look at what the following charts say on the subject.] Words: 225

The public's estimates and predictions of inflation are significantly, and systematically, related to the demographic characteristics of the respondents...[and] even after we hold constant income, age, education, race, and marital status...women in our survey tended to think inflation was 1.9 percentage points higher than men. [There are more interesting findings, so read on.] Words: 987

The USA continues to decline economically relative to some parts of the world, most notably those in Asia yet we still lead in many areas. Unfortunately being number one is some categories is not a good thing and our level of debt is one of these areas. In fact, our debt burden leads the world. [A look at the charts below illustrates that all too clearly.] Words: 272

The Legatum Prosperity Index survey, as shown in the following table, ranks countries on eight different attributes, and then consolidates those attributes into an 'overall ranking'. The report says that the U.S. has fallen out of the top 10 (to #12) in the 'most prosperous country ranking' increasing doubts about the health of its economy and ability of its politicians. Read the balance of the article to see where your country is ranked overall and in each of the 8 different categories. Words: 520