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The Vulnerability of Private Wealth to Government Financial Stress
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QEs, Currency Wars, the Trillion Dollar Platinum Coin and the Route to “Modern” Inflation
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VIDEO - Texas Financial Market Roundtable 2012
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Roadblocks to Recovery an Interview with Dr. Lacy Hunt
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Frank Beck on Investing in Uncertain Times
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The Vulnerability of Private Wealth to Government Financial Stress
Search Results for: financial news
The Deflationary Trap and the Central Bank Game of Chess
Few who lived through the “runaway” inflation of the 1970s would have dreamed that someday inflation would be a desirable public policy? We have come to find out that it surely beats deflation. But how to achieve inflation has proven to be elusive. Continue reading
The Keynesian Dead End: A Watershed Moment
John Maynard Keynes had an idea that seemed good at the time (the 1930s): Governments can stimulate an economy with what he called “loan-expenditures” — that is, debt-financed spending. This past week, the UK is paying down its World War I debt, as if we needed a reminder. Debt doesn’t go away; it just accumulates, requiring additional taxes to pay the forever-interest meter and miring its own economy as well as their trading partners. Continue reading
America’s Exorbitant Privilege is Skating on Thin Ice
The willingness of the rest of the world to hold a block of its assets denominated in the U.S. dollar means that U. S. asset prices are enhanced and the U. S. is able to sell a substantial portion of its government debt to foreign holders at cheaper interest rates. This is known to foreigners are U.S. “Exorbitant Privilege.” But that privilege is being squandered by short sighted U. S. policies and plans are underway to switch reserve currencies. Continue reading
The Robin Hood Reflex Once Again Confronts Capitalism
Thomas Piketty, a name you are not likely familiar with, is a French economist who has given voice to the notion that the rich are getting richer at a faster rate than others. His recent book skyrocketed to first on the Amazon best-selling list immediately. And of course, what follows is the Robin Hood reflex to redistribute. Don’t dismiss the political ramifications that Piketty-mania is having and the costs to society from adopting redistribution. Continue reading
Posted in The Spellman Report
Tagged Dollar as a reserve currency, Economic policy and financial markets, Economy and financial markets, Inflation and financial prices, Political economy, Redistribution of income, Redistribution of wealth, Thomas Pikkety, US Sovereign risk and investing, wealth preservation
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Economic Direction as Seen Below the Radar
The economy has been in a growth rut for six years with one large shock after another. But there is also a cyclical component to GDP growth that lives a life of its own and can drive an economy. The very low levels of plant and equipment spending since the tech boom of the 1990s leaves the US with aging physical plant and rising labor costs. This should stimulate business capital investment and keep the cyclical ball rolling but at reduced profit margins and a tinge of inflationary pressure. Continue reading
An Ode to George Bailey, Credit in a Banking-less World and How Much QE Is Enough
Though financial regulation has taken the friendly local loan officer (George Bailey) out of the credit equation, the Fed’s Quantitative Ease is creating credit at close to record rates of growth. The credit generation is not in the usual ways, but in amounts sufficient to generate an economic expansion. Read about the creative market response to increases in the monetary base when banks are handcuffed to Dodd-Frank. Continue reading
Regulation, Gravity and The “Isms”: The Education of a President
This week, President Obama unveiled his proposals to enhance economic growth, create quality jobs, and create fairness in income distribution an approach he calls growing from the “middle out.” His plans call for income redistribution under the guise of income “fairness” that might reduce differences in income but at a cost of lower income for all. These lessons of the “isms” were learned centuries ago and relearned after the Great Depression but seemly must be relearned again. This will be an expensive education of a President. Continue reading
Posted in The Spellman Report
Tagged Compliance costs, Economic growth, Gravity, Income redistribution, Laissez Faire, Middle-class income, Obama speeches, Regulation, Regulation as a macroeconomic policy, Regulatory Costs, Supply Side economics, Tax administrative costs, The Invisible Hand
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A Tiger by the Tail: The Fed and QE3
Federal Reserve metaphors of tapering, exit and de-acceleration are but face saving diversions in the dialogue from the hard fact that this is a requiem not just for QE3 but also a requiem for the idea that the Fed is able to generate further lending and spending. In this new global financing world, stimulus from money had moved to the Shadow Banking System which has reached its upper limit not despite QE3 but because of it. Continue reading
The Slow-Moving Train Wreck Has Picked up Speed: Foreign Depositors in European Banks Will Be Outed
Economies have natural self-correction mechanisms to keep the economic train on the tracks and moving at accustomed speed unless undercut by governments. In their desperation for tax revenues, Euro zone governments have “outed” their foreign depositors to the foreigners’ home taxing authority. Thus, the slow moving train wreck has just picked up speed. Continue reading
The Knockout Punch: Has America Turned to Socialism?
In the days following the election there was a numbing silence. It was as if the body politic was dazed by a heavyweight champion’s blow to the head. It staggered and sought clarity to understand what’s to become of our … Continue reading