Economics

Peter Schiff: Symptoms Don’t Lie

"According to the Bureau of Economic Analysis data, in 2002 Americans spent about 17.8% of income on food and energy. In the first quarter of 2013 the share had risen by a factor of 20% to 21.3% of income. Increased share of spending on necessities like food and energy is consistent with falling living standards. In the poorest countries almost all of income is devoted to such things. If consumer inflation data were reported more accurately, it would be revealed that much of the apparent growth is an illusion. The patient is getting sicker, but the doctors are too distracted to notice." Continue reading →

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The Truth About Fake Hospital Pricing (And What To Do If You Are Uninsured)

"People without insurance, on average, are being charged 3 times what insurance companies pay. When the uninsured patients can’t or don’t pay, the balance is written off and the tax liability is reduced. Some uninsured people try to raise the funds, and it breaks my heart that they go bankrupt trying to pay these debts. If you’re ever uninsured and wind up with a huge hospital bill, go negotiate with the hospital CFO for a 66% reduction in the bill. Use the government data (link here) as leverage in negotiating with the CFO. Threaten to expose the racket and I bet the CFO will write down your bill to keep you quiet." Continue reading →

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Argentina: Dollar price at 10.45 Pesos over two times the ‘official’ price

"The blue dollar jumped past the key psychological barrier of 10 Pesos on Tuesday in thin t rade, reflecting persistent demand for greenbacks amid tough currency controls. Meanwhile, the official rate remained unchanged at exchange offices in Buenos Aires at Pesos 5.16 (buying price) and Pesos 5.22 (selling price), with the gap between the two markets over 100%. In a context of high inflation, negative interest rates or other options to defend the value of the Argentine currency, Argentines are increasingly taking refuge in the US dollar. To this must be added an overall feeling of distrust and uncertainty which can have a greater impact that what stats can present." Continue reading →

Continue ReadingArgentina: Dollar price at 10.45 Pesos over two times the ‘official’ price

Tallest Skyscraper Yet Going Up In Midland, Texas

"In 1927, when T.S. Hogan announced plans for a 12-story office building called the Petroleum Tower, many here were incredulous. A skyscraper? On the plains of West Texas? But city leaders embraced the building and the status it conferred on the city as the heart of the new Permian Basin oil field, historians say. At least until 1929, when the price of a barrel of crude dropped to 15 cents and the just-opened building sat empty. Eighty-six years later, the Petroleum Tower still stands—and history may be starting to repeat itself." Continue reading →

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Detlev Schlichter: Is present monetary policy rational?

"Deflation is not such a bad thing if you have to live on your savings or a modest, nominally fixed payment stream. Additionally, reshuffling the economy’s deck of cards could also offer opportunities. Tearing down the old structures and allowing the market to price things honestly again, according to real risks and truly available savings, may at first cause some shock but ultimately bring new possibilities. The present monetary policy is inherently conservative. It bails out those who got it wrong in the recent crisis at the expense of those who didn’t even participate in the last boom." Continue reading →

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Bill Bonner: Buffett is frightened

"Investors have reached a new level of bullishness. They're borrowing again to buy stocks, confident that prices go in only one direction. There's also a swift current of economic analysis telling us that the commodities boom is over, the Fed has the situation under control and the bull market in gold is finished. All of which is amazing and often breathtaking. Stock market investors don't seem to know or care that the only thing holding up their investments is something that will ultimately destroy them. And that the longer it continues, the bigger the mess when it finally blows up. We're talking, of course, about the Fed's monetary policy." Continue reading →

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3D printing: the new, bottom-up industrial revolution

"The new technology will be the first real challenge to the traditional top-down economics of mass production for manufactured goods. This has already happened in the services sector and the digital world, with the rise of Facebook, Twitter and YouTube, and the ability for self-publishing authors and music artists to sell directly to the public; now this decentralisation of power will also happen in manufacturing. Big will no longer necessarily be beautiful when it comes to making things, undoing centuries of lessons learnt from the Industrial Revolution and the rise of Taylorist production processes." Continue reading →

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Stodgy Netherlands is nation that’ll blow up euro

"Consumer debt in the Netherlands has hit 250% of available income, one of the highest levels in the world. In Spain, by comparison, it has never gone above 125%. The Netherlands has turned into one of the most heavily indebted countries in the world. It has slumped into recession and shows very little sign of coming out of it. The euro crisis has been dragging on for three years now but so far has only infected the peripheral nations within the single currency. But the Netherlands is a core member of both the euro and the European Union. If it can’t survive in the euro zone, then the game really will be up." Continue reading →

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China Opens New Front in Currency War as Yuan Speculation Distorts Export Data

"The move came as April exports blew past expectations, which appeared on the surface to indicate that both China's economy and global demand were on the mend. But economists were quick to suspect the figures were artificially inflated by investors who were disguising speculative bets on the yuan currency as trade payments. Faced with the risk that such inflows could cause the yuan to appreciate so quickly that it destabilizes exports and the broader economy, the People's Bank of China (PBOC) has begun intervening heavily in the domestic currency market this year, buying up dollars and selling yuan." Continue reading →

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Moody’s: ‘Strategic Default’ Viewed as Less Taboo by Cities

"The number of defaults from U.S. municipal issuers rated by Moody’s Investors Service has more than tripled to 4.6 per year since 2007, showing willingness to pay can’t be taken for granted, the company said in a report. Five municipalities rated by Moody’s defaulted last year, including Stockton, California, which became the biggest U.S. city to seek Chapter 9 bankruptcy protection in June. Wenatchee, Washington, failed to honor a guarantee on an interest payment for a sports arena. The figure doesn’t include issuers such as Vadnais Heights, Minnesota, which 'selectively defaulted' on contingent liabilities, the report said." Continue reading →

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