For years, China watchers have warned that banks there are vulnerable to failure because of bad debt that the banks refuse to recognize. Now the IMF says that China’s corporate debt, which stands at 145 percent of Gross Domestic Product, “is a potential risk to the global economy.”
One of the primary tenets of Austrian economic theory is that economies cannot be “managed,” that interference, be it deficit spending, regulations, taxing policies, central bank quantitative easing programs or negative interest rates, will send false signals that will distort decisions made by the private sector, the real driver of economic growth. The bigger the
Is the US economy slowing down, which will prompt more Fed stimulus, or is it “dramatically better” as NY Fed President William C. Dudley said in a recent New York Times interview, which will allow the Fed to raise the discount rate later this year? In the first quarter, US Gross Domestic Product rose only
And, the stock market — using the Dow Industrials — fails to make new highs. The U.S. economy grew at its slowest pace in two years the first quarter 2016, with GDP rising .5 percent, less than half the gain posted fourth quarter 2015. For some time, the U.S. was the shining star among world
At the Group of 20 largest economies summit just concluded in Shanghai, the primary concern was deteriorating global growth and how to counter it. Much discussed was a “coordinated effort,” which would include increase government spending by members, in addition to the massive deficit spending already going on worldwide. Mark Carney, Bank of England head,
Mario Draghi, ECB chief, again reaffirmed his pledge to print more euros next month in a Keynesian effort to fillip economic activity in the eurozone. In December, the ECB’s measures fell short of market expectations, and stock markets declined. This time Draghi does not plan to disappoint.
The main reason to buy gold and silver is to protect against currency debasement, which is brought on by massive deficit spending that requires the Fed to print dollars to cover debt that could not be sold to private investors.
It’s astounding to hear talking heads blame the stock market collapse on falling oil prices. Lower oil prices should have caused stocks (except oil stocks, of course) to rise. This is especially true of the stocks that make up the Dow Transportation Index.
As is the case with most firms in the financial field, we have TVs running in our offices from the time we open to closing. Sometimes, we learn something of value, but most of the time the commentators talk about meaningless developments, such as the daily changes in value of the dollar to other currencies.
The Fed did not listen to me and leave rates unchanged. They hiked .25%, as was widely expected in more learned circle. I thought that Yellen and Company would fear being blamed for either a massive stock market sell-off or recession, both of which we may still see. The New York Times saw the Fed
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