Econ70
The ECB hiked its main interest rate to 1.25% from 1%, yet inflationary pressures and growth prospects are no different in Europe than in the US and UK and they are not raising. This decision marks the moment when differences…
If the federal gov’t closes does it matter to the economy? NO! Social Security checks will continue arriving and air traffic controllers will still land planes. The fragile recovery will not be harmed. The most serious and negative consequence; a…
Interest on the federal debt is 1.4% of GDP; $200 billion. But, it is projected to ramp up fast for 2 reasons. 1st we add $1.4 tillion to it every year and 2nd interest rates are at historic lows. If…
There seems to be widespread view that Treasury yields will rise sharply once QE2 is over since the captive market for bonds, the Federal Reserve, will be gone. Wrong, wrong, wrong! The only way Treasury yields will increase is if…
For the 1st time in 5 years the private-sector added more than 200K jobs for 2 months in a row. That’s great news! The bad news is that if you have a job wages haven’t kept up with the rising…
Deflation 101: It’s critical to keep in mind that deflation is a symptom of weak demand but it is not necessarily a cause. If we attack the symptom of falling prices with a dose of inflation, we risk having 2…
We are in a very different political environment in 2 key respects than during the shutdown of ’96. 1st in ’96 there was no Internet, blogosphere or Fox News and talk radio was in it infancy. Thus the liberal inclined…
We know the Bernanke lead Fed is willing to be extremely aggressive. But as we saw in 2010 the hurdle is high for more Quantitative Easing. We need evidence of A) a double-dip B) a stock market correction of at…
The good: Consumer spending rose in Feb for an 8th consecutive month, spending rose 0.7% in February after a 0.3% increase in January. The Bad: Adjusted for inflation, consumer spending was up just 0.3% last month after being flat in…
Oil companies produce less gas in the spring to make it more costly. NOT! Prices do rise in spring, but is because there is less cheap butane in it. Butane boils at low teperatures. In winter that is not a…