Just as government policies have incentivized farmers and municipalities to waste their precious water resources, government borrowing and spending is draining our capital and distorting the structures of production in the economy. What we see now cannot be sustained much longer.
The Fed Is Draining Our Economy Like Farmers Have Drained Their Aquifers Read More »
Despite elevated inflation, the United States government is spending more than ever, which means consuming more units of issued currency. Tim Congdon at the Institute of International Monetary Research shows how the inflationary burst was directly linked to broad money growth due to rising government deficit spending. Market participants and economists like to believe that the central bank will manage the economy as if it were a car. The current optimism about the U.S. economy reminds us of the same sentiment in 2007 when no one seemed to worry about rising imbalances.
The Dangerous Myth of a “Soft Landing” Read More »
There’s a new Recession Alarm! Money Supply Growth can have a significant influence on the state of the economy. When the FED is pumping, and the money supply is growing, Woo Hoo, it’s happy days, but when the flow dries up, the economy goes into a tailspin. As we have repeatedly implied, via the FED’s massive Quantitative Easing, the money supply has grown exponentially over the last decade.
But today, let’s look at the M3 money supply itself. The M3 money supply is a broad measure of money, including M2 plus much more. It is an indirectly derived measure of the supply of money which includes currency in circulation, checking and savings deposits, certificates of deposit, term deposits, call/term borrowings from ‘non-depository’ corporations by the banking system, and ‘Other’ deposits with the central bank.
Latest Recession Alarm Read More »
As the chart to the left shows, in the period from 2002 until 2014 the U.S. moved from 3rd place to 1st place in world crude oil production. This is primarily due to the improvement in “fracking” technology which has led to the massive increase in the production of shale oil. This does not sit
Are Low Crude Oil Prices a “Boom Or A Curse” For The World Economy? Read More »
Many people today are convinced that the good times are behind us… that the 1950’s were truly the “Happy Days”… that there is more war and terrorism today than ever before… that in essence “the world is going to hell in a hand basket”. But Dr. David Eifrig has a different perspective.
Is the Golden Age Really Over? Read More »
The US has come so close to becoming energy independent. But it’s going to have to get its head around the idea that it could become a big oil importer again. In the end, the US energy boom may add up to nothing more than an illusion dependent upon the artificially cheap debt environment created by the Federal Reserve’s easy money policy.
The Oil Slump Will Hurt the U.S. Too Read More »
Everyone is aware that the “recovery” is lame and is primarily an illusion due to the printing of funny money by the FED. What effect will it have if the FED shut off the spigot over night? Well just the thought of that idea recently sent shivers down the DOW’s spine. So Bernanke had to
Tapering vs. Economy And Trends Read More »
Often we have preconceived notions about what affects the price of gold. Commonly it is believed that inflation is the primary factor in the price of gold but in an article entitled Is Gold really a good Inflation Hedge? I showed the history of Gold and how it really was a fear hedge rather than
Poor Economy = Low Gold Price? Read More »
Like many places around the world, Chile has seen its fair share of ups and downs over the last few decades. Just over a generation ago, you would have been absolutely mad to come to Chile. Back then, the country was experiencing wild inflation and instability and was one of the more dangerous places in South America.
Chile is on the Cusp Read More »
By Dr. Lacy Hunt for Casey Research In the early 1960s, when JFK was in the White House and William McChesney Martin was Fed chairman, Keynesian economics was in full bloom. One of its major tenets is the Phillips Curve, which posits a stable inverse relationship between the rate of inflation and the unemployment rate.
Unintended Consequences of Well-Intended Policies Read More »
