Tag Archives: On Economy

Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic. Quite frankly, keeping tabs on it all is beyond human capacity.  This also goes for the federal government.  Even with all their data gatherers and number crunchers they are incapable of...

A Convocation Of Gamblers The Wall Street Journal and BloombergView have just run articles on the shadow banking system in China.  This has put me in a nostalgic mood. About 35 years ago when I was living in Japan, I made a side trip to Hong Kong. I took the hydrofoil to Macau one afternoon and the same service back early the next morning.  On the morning trip, I am sure that I saw many of the same faces that I saw...

  Home of the Brave? BALTIMORE – It is a bright summer day outside. A dry breeze sweeps down Cathedral Street and blows away the hot, humid air. It is hard for us to imagine that anything bad could happen today. But bad things do happen – even on nice days. The weather was fine when General Custer rode out to the Little Bighorn, too. Over the weekend, we worked at putting up a board fence – with half-round treated...

Groucho dispensing valuable advice Photo via imdb.com Destroying Lives BALTIMORE – A dear reader reminded us of the comment, supposedly made by Groucho Marx: “A free lunch? You can’t afford a free lunch.” He was responding to last week’s Diary about the national referendum in Switzerland on Saturday. Voters will decide whether to give all Swiss residents a free lunch – a guaranteed annual income of about $30,000 a...

Felix Zulauf Photo credit: Sigi Tischler / Keystone Government Intervention is Making Things Worse Claudio Grass, the CEO of Global Gold, has recently interviewed legendary Swiss fund manager Felix Zulauf. A wide range of topics was discussed, including monetary policy, the market outlook, investment decisions and precious metals. About Felix Zulauf: Felix Zulauf started out as a trader for Swiss Bank. He joined Union Bank of Switzerland in 1977, ultimately becoming the head of the...

The new Utopian socialists believe that the latest capitalist gizmos will help them realize their dream of a society under the full control of socialist philosopher kings. Image via grundeinkommen.ch Robotic Utopia In spite of the fact that Marx expressed nothing but disdain for his Utopian socialist predecessors such as Henri Saint-Simon and Auguste Comte, variants of Utopian socialism evidently live on. The latest iteration of the socialist dream is firmly focused on the capabilities...

  An Alert for the Global Posse of Liquidity Junkies In the summer of 2015 and again in December-February this year, global stock markets were rattled by weakness in the yuan’s exchange rate vs. the US dollar. Yuan weakness is widely held to exacerbate pressures on other (already weak) emerging market currencies, but more importantly, it is seen as a symptom of accelerating capital flight from China. USD-CNY, daily; onshore yuan rate USD-CNY, daily (a rising price denotes yuan weakness)...

Cartoon by Bob Rich No Surprises BALTIMORE – We were not surprised by the big news last week. We saw it coming. Figures from the Conference Board research group revealed productivity sinking for the first time in three decades. We promised to explain why it was such a big deal. Rate hike fantasies have been a recurring theme since 2009. Given that the market for federal funds is dead as a doornail (banks continue to hold huge excess reserves with the Fed and therefore have no need to...

Steel factory Photo credit: Laurentiu Iordache Victims of the Boom-Bust Cycle The world is drowning in steel – there is huge overcapacity in steel production worldwide. This is a direct result of the massive global credit expansion that has taken place over the past 15 years. Much of this capacity is located in China, but while the times were good, iron ore and steel production (and associated lines of production) was expanded everywhere else in the world as well. Heavy industries like...

  Two of many symptoms of the much-bewailed “populist backlash”… Image via economyincrisis.org Rolling Back 200 Years of Growth BALTIMORE, Maryland – The press reported mixed financial news on Thursday. House sales, oil, unemployment figures… up, down… the news left investors puzzled. Stocks went mostly nowhere. But amid the confusing noise was the sound of an alarm: “Fall in U.S. productivity sparks fears of populist backlash as wages stagnate,” says a lumbering headline in the...