The Bowtie Economist's Daily Dose of 70-Word Wisdom


Euro Risk

02/05/2013

Despite the euro zone being in recession, the euro is dramatically rising against the US dollar, from $1.20/euro in July to $1.36 today. Why, because massive European Central Bank (ECB) action prevented Spain from collapsing, and the ECB is fast…

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Doubling Debt

02/04/2013

While per capita debt has ballooned from $1,640 in 1/66 to $53,000 today, it’s the growth rate that matters. Between 1/66 and 10/77 (11.75 years) the debt doubled. It doubled again by 7/84 (6.75 years), again by 10/90 (6.25 years),…

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Bad Green Vegetables

02/01/2013

The Friday File: 2.2 million Americans get sick annually from contaminated leafy vegetables. That represents 23% of all food-borne illness. Fruits, vegetables and nuts sicken 4.4 million persons, beef, pork and poultry cause 2.1 million illnesses and dairy products, another…

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GDP Behaving Badly

01/31/2013

Despite GDP contracting at an annual rate of 0.1% in Q4 2012, the worst quarter since the end of the recession in 6/09, another recession isn’t in the cards. That’s because the data also showed relatively strong spending by consumers…

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Sequester Certainty

01/30/2013

Given Republican unwillingness to raise taxes and Democratic insistence on it, the delayed automatic $110 billion sequester will kick-in on March 1st. This will reduce GDP growth by 0.75% and guarantees a weak first half of ’13 as the economy…

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Reserved Federal Reserve

01/29/2013

As the economy strengthens, the Fed must begin to end its exceptionally expansionary monetary policy of the last half decade. It will begin by halting its purchases of $85 billion/month in Treasuries and mortgage-backed-securities. Second, it will stop reinvesting interest…

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Government Goes On!

01/28/2013

If a continuing resolution is not passed by the Congress by 3/27/13, the Obama administration will be forced to shut down activities funded by appropriations and all non-essential government operations. But this isn’t that ominous. Only 40% of federal spending…

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Nobel Chocolate

01/25/2013

The Friday File: Flavanols in cocoa slow and even reverse age-related cognitive decline. Better yet, a nations’ annual per-capita chocolate consumption is correlated with the number of Nobel laureates. The country with the most Nobels per-capita and the greatest per-capita…

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Gimme Growth

01/24/2013

While raising taxes and cutting spending can solve our debt problem, a better approach is to foster faster growth! If an increase of 1% in the economy’s growth rate were maintained over the next decade, the debt-to-GDP-ratio in 2023 would…

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Monetary Slow Down

01/23/2013

While the Fed has increased the money supply by $2 trillion and will increase it by another $1 trillion by 1/1/14, inflation is MIA. This is because the velocity of money, or the number of times a dollar changes hands…

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