Economics

Happy Endings in China?

"Couple potential (and ongoing) unrest regarding further urbanization with a lagging economy, an unbalanced banking sector and dwindling exports and you have a recipe for further questions about the Chinese Miracle. The biggest gamble of all may be the ChiComs' recent announcement that they intend to allow yet more free-market activity to take place. At what point do market forces begin to overwhelm ChiCom command-and-control facilities, especially when it comes to high-end monetary economy where the power resides? For all these reasons, we would imagine that even if China escapes a hard landing for now, there is one in store sooner or later ..." Continue reading →

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Bill Bonner: Are We Approaching a “Second Coming” For Gold?

"There are no moms or pops left in the gold market. Even serious, knowledgeable investors have gotten out. From what we read, it seems more like a bottom than a top. The public is not interested. And the professionals hate gold. If we were speculating – and we are not – we would bet that gold is a better buy than a sell. The price could go anywhere. But unlike the Fed's paper, gold won't go away. And, at $1,100 an ounce, gold is likely to be one of those few investments you don't mind telling your children and grandchildren about. If you buy, wait five years. Then let us know how it worked out." Continue reading →

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The Economics Behind the U.S. Government’s Unwinnable War on Drugs

"The U.S. government's policy of drug prohibition, like alcohol prohibition before it, is a failure. The economic analysis of fighting a supply-side drug war predicts that the war will enhance drug suppliers' revenues, enabling them to continuously ratchet up their efforts to supply drugs in response to greater enforcement. The result is a drug war that escalates in cost and violence. The drug war causes drugs to be more potent and their quality less predictable than if drugs were legal, leaving the remaining users at greater risk and, in the face of higher prices, more likely to commit crimes to support their habit." Continue reading →

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France’s triumphant ‘Joan of Arc’ vows to bring back franc and destroy euro

"'We cannot be seduced,' she said, brimming with confidence after her party secured 46pc of the vote a week ago. Her candidate trounced the ruling Socialists in their own bastion of Villeneuve-sur-Lot. 'The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?' 'Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats,' she said. It is her defence of the French welfare model and her critique of capitalism that gives her a Leftist hue -- some call it 1930s national socialism -- so far in outlook from Britain's UKIP." Continue reading →

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Egypt: What a Shame

"When was the last time you saw a Jiffy Lube tear gas everyone who refused to stop in? Have you ever seen a Chiropractor driving down the street shooting water cannons at people who refused his services? Every single person could make a decision that 'I'll never go to Jiffy Lube as long as I live,' and Jiffy Lube could do nothing about it. Should that decision be made by everyone, it would have no choice but to close its doors. No pickets....No chants....No fairy tales like 'making your voice heard' or 'the will of the people'. No injuries, arrests or tanks trampling over bodies. Just a simple decision not to interact...not to exchange...not to associate." Continue reading →

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Is ‘La Vie En Rose’ Over For France?

"French industry has been ruined by overly powerful unions and their political allies in the Socialist Party. One would be crazy these days to open a factory in France with its absurd 35-hour work week, endless vacations, surly unions, strikes, and social costs that add 50% to worker’s salaries. Laying off workers during downturns or closing plants involves siege warfare. French universities keep churning out unemployable graduates in social anthropology, sociology, and film-making. Government in France employs 56% of all workers, an unsustainable cost that, with retirement at 60 and unemployment benefits – now 32% of GDP – is bleeding the economy to death." Continue reading →

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Argentine president battles inflation by launching government clothing line

"Just in the last few years, she’s imposed capital controls. Media controls. Price controls. Export controls. She’s seized pension funds. She fired a central banker who didn’t bend to her ‘print more money’ directives. She even filed criminal charges against economists who publish credible inflation figures. Even Cristina acknowledges that prices are way too high. But rather than rein in spending and stop the money printing, she’s digging her high heels in even further by launching a new clothing line. This new brand– NYP will be owned and run by the government, selling everything from jeans to shirts to shoes at prices below 100 pesos (less than $20 officially)." Continue reading →

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NY Fed: The Truth About the Job Market for Recent College Graduates

"We show that there are large differences in unemployment rates, underemployment rates, and average wages across majors. In particular, we show that those with degrees in majors that provide technical training, such as 'Engineering' and 'Math & Computers,' or in those that are geared toward growing parts of the economy, such as 'Education' and 'Health,' have tended to do pretty well when compared to the rest of the pack. At the other end of the spectrum, those with a 'Liberal Arts' or 'Leisure & Hospitality' major tend to have lower wages, higher unemployment, and higher underemployment." Continue reading →

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The Expendables: The Temps Who Power Corporate Giants

"Across America, temporary work has become a mainstay of the economy, leading to the proliferation of what researchers have begun to call 'temp towns.' In June, the Labor Department reported that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows. But according to the American Staffing Association, the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a staffing agency. Temp work is roaring back 10 times faster than private-sector employment as a whole." Continue reading →

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