Economics

Detlev Schlichter: It’s a mad mad mad mad world

"Shinzo Abe, Japan’s new prime minister, has some exciting new ideas about how to make Japan’s economy grow. How about the government borrows a lot of money and spends it on building bridges and roads all over the country? If that doesn’t sound so new, it is because it isn’t. It is what Japan has been doing for 20 years, and it is the main reason why Japan is now the most heavily indebted nation on the planet. But never mind. The Keynesians agree that this policy was a roaring success, and that this is why the country needs more of it. Mr. Abe also plans to force the Bank of Japan into printing more money, and this is surely going to be a great success, too." Continue reading →

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Japan lashes out over depreciating dollar and euro

"Japan's new finance minister upped the ante in the country's war of words against the strong yen, lashing out at the U.S. and Europe for letting their currencies weaken dramatically and calling on the U.S. to strengthen the dollar. The dollar has recently staged a sharp recovery, as Mr. Abe's pledge to strong-arm the Bank of Japan into easing monetary policy to weaken the yen has driven investors to sell off the yen. While that has cheered Japan's struggling exporters, Mr. Abe's drive toward a weaker currency has also raised concerns abroad that it could risk triggering a devastating global race to undercut currencies to protect export competitiveness." Continue reading →

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Egypt fears run on its banks as it imposes limit on amount people can withdraw

"Egypt has imposed a limit on the amount of money people can take out of the country, amid fears of an impending run on the banks. The move to ban leaving with more than £6,000 came as thousands of Egyptians withdrew savings from banks to hoard cash at home. Anxiety about a deepening political and economic crisis has gripped the country in past weeks, with many people rushing to buy dollars and take out their savings from banks. The panic came as the country’s new president, Mohammed Morsi, called for ‘unity’ after a referendum approved a controversial constitution which gave him and islamist allies more powers." Continue reading →

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Where to Be Born in 2013

"Economist Intelligence Unit has calculated where are the best places to be born in 2013. Its quality-of-life index links the results of subjective life-satisfaction surveys—how happy people say they are—to objective determinants of the quality of life across countries. Not surprising, Switzerland, perhaps the freest country in the world, tops another list of best country to live in." Continue reading →

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U.S. Birth Rate Falls to a Record Low; Decline Is Greatest Among Immigrants

"The U.S. birth rate dipped in 2011 to the lowest ever recorded, led by a plunge in births to immigrant women since the onset of the Great Recession. The overall U.S. birth rate, which is the annual number of births per 1,000 women in the prime childbearing ages of 15 to 44, declined 8% from 2007 to 2010. The birth rate for U.S.-born women decreased 6% during these years, but the birth rate for foreign-born women plunged 14%—more than it had declined over the entire 1990-2007 period. The birth rate for Mexican immigrant women fell even more, by 23%." Continue reading →

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ProPublica: Govt Now Runs the US Mortgage Marketplace

"The American home mortgage market has, for all practical purposes, become nationalized since the 2008 financial meltdown, according to an analysis by ProPublica, the non-profit investigative journalism project. The takeover, without which the housing market could barely function, has occurred against a backdrop of little planning or public discussion. In fact, nine out of every 10 new mortgages are now backed by the U.S. taxpayer, up from three in 10 in 2006. Fannie Mae and Freddie Mac, the taxpayer-supported housing giants, alone guaranteed 69 percent of new mortgages in the first nine months of 2012." Continue reading →

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Is Your Portfolio Ready for this Coming Disaster?

"Our economy is under the control of a drunk driver, who is now making decisions based on broken metrics. I’m talking about the Fed. It has announced its newest plan to boost the economy. And the plan is based on two key, terribly flawed numbers. This is likely to end in disaster. The Fed has recently announced it will print $85 billion every single month until inflation rises above 2.5% or unemployment drops to 6.5%. Printing money in itself is a dangerous activity. When you decide how much you print based on two flawed metrics, then it almost ensures disaster. The numbers the Fed uses to measure inflation and unemployment are useless." Continue reading →

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City steakhouses suffer as Midwest drought sends meat prices soaring

"Beef was already in short supply — a victim of earlier droughts and rises in the costs of fuel and feed. During this year’s drought, ranchers reluctant to buy expensive grain feed brought young — and thin — cattle to market early, which will spur another shortage and could threaten fatter cuts of beef. At the famed Peter Luger Steakhouse in Brooklyn, the New York strip is already up 11 percent, to $46.95, said owner Amy Rubenstein. But nearly all restaurants are bracing for the worst. Peter Glazier, owner of Michael Jordan’s Steak House, said meat purveyors are warning of increases of up to 20 percent in the coming year." Continue reading →

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Why Buffalo wings will break your budget in 2013

"The Buffalo wing isn’t the only food item projected to jump in price next year, though it is one of the more dramatic upward shifts. Because of a drought that parched the Midwestern part of the country this past summer, nearly every food product tied to corn will see price increases in 2013. And overall, household food prices are expected to rise between 3 and 4 percent, according to projections from the 2012-2013 Food Price Outlook from the US Department of Agriculture. In addition to the corn itself, which had a weak crop as a result of the drought, prices will go up on proteins like beef and chicken, because livestock feed is primarily made of corn." Continue reading →

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The Continuing Exodus of Jobs – and Taxable Income – from California

"I wish I could be a fly on the wall when this moment of truth happens to California politicians. They convinced voters in the state to enact Prop 30, a huge tax increase targeting those evil, awful, bad rich people. Governor Brown and his fellow kleptocrats in Sacramento doubtlessly are salivating at the thought of more money to waste. But notwithstanding a satirical suggestion from Walter Williams, there aren’t guard towers and barbed-wire fences surrounding the state. Productive people can leave, and that’s happening every day. And they take their taxable income with them." Continue reading →

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