Month: July 2013
The recent Chinese cash crunch was a sign from the government of its intention to reign in credit growth to the shadow banking system, wasteful local governments and speculators. Part of the problem is that Chinese banks can’t offer competitive…
Read MoreWhile the Senate is indeed broken, preventing the minority from filibustering presidential nominees to the executive branch will make things worse by beginning to turn the Senate into the House, where the minority party has no power. The Senate must…
Read MoreAll interest rate increases aren’t created equal. A rise in 10-year treasury rates from 2%, where they are now, to 3% or 4% is a sign of improving business conditions and opportunities resulting from a strengthening economy. By contrast, a…
Read MoreThe Friday File: The 35 mile Gotthard Base Tunnel in Switzerland will be the world’s longest rail tunnel when opened in 2016. Today, the world’s longest rail tunnel is the 33.5 mile Seikan Tunnel in Japan connecting the islands of…
Read MoreThe virtue of the gold standard was that countries with trade surpluses saw their gold holdings rise, which increased their money supply, raised prices and reduced exports. Conversely, countries that ran deficits lost gold, which caused their money supply to…
Read MoreConsumer borrowing rose by $19.6 billion last month, substantially more than the $12.5 billion forecast by economists (big surprise there) and up from $10.9 billion in May. Non-revolving debt, which includes car loans, student loans and mobile homes loans increased…
Read MoreWith 195,000 new jobs in June, the average monthly gain in the first half of 2013 is 202,000 – way up from the 130,000/month pace when QE3 began. Moreover, the unemployment rate remained unchanged, because 177,000 people joined the labor…
Read MoreThe Friday File: Wonder why driving a new car off the lot reduces its value by 25% or more? One reason has to do with the retail showroom price versus the resale/used price. The other has to do with car…
Read MoreThe Revolutionary War, fought between 1775 and 1783 cost $101 million then or about $2.4 billion today. That number includes only the cost of military operations. If you include interest on borrowed money and veterans’ benefits, costs are higher. The…
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