Saturday, October 1st, 2016 MST

Weakening economy scares Chinese

In a move that is supposed to fillip economic activity, China’s central bank cut interest rates again.  While interest rates in China are not at near zero levels as in the US, the move further signifies that the Bank of China has fully embraced Keynesian economics, which have not stimulated economic activity in the US

Plan for higher rates of inflation

Establishment economic thinking is that the “right” rate of inflation is 2%.  Thoughts on this position can be found here: The Goal of 2% Inflation, Rethought — New York Times. Japan is falling far short of 2% inflation, despite the Bank of Japan buying ¥80 trillion worth of bonds each month.  Analysts are now speculating

The stock market is managing the Fed

Following the March 18 “Statement” by the FOMC that any interest rate increase would probably not come until September, stocks moved from negative territory into big upside gains.  Truly, the markets liked the idea that any interest rate hike would put off until later in the year. However, the following week the Dow Industrials plunged

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