Government spending has consequences. The US national debt has surpassed $34.6 trillion at the time of this writing and continues to grow every minute. America has never been in a deeper deficit. The Committee for a Responsible Federal Budget (CRFB) has reported that America was forced to pay $514 billion in the first seven months […]
Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation. “I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate […]
Some people have a very hard time understanding that we are in a massive deflationary spiral; they think that rising prices simply means it is inflation and not deflation. Then they mistake stagflation for deflation and wonder why people are spending more on less. They only see prices, not disposable income, and certainly not economic […]
The history of interest rates is provided on this site. Interest rates in a developed economy reflect the “option” value on the expected decline in purchasing power of money. If I expect it to decline by 5%, then I expect a profit, and say want 8%. You in turn will pay the 8% only if […]
All those investigating cycles within the economy made a simple mistake. Kondratieff followed agriculture/commodity prices when agriculture accounted for 70% of the GDP pre-19th century. That only began to decline from 1850 forward, dropping to 40% by 1900 as the Industrial Revolution emerged with the invention of the steam engine. Moreover, aside from climate impacting […]
The most fundamental truth about trading is that your opponent is YOURSELF. The majority must be wrong because they are the fuel that propels the market. The market enters a flash-type crash when the vast majority is LONG, and they try to sell, but there is no bid. Far too many people demonize trading such […]
Economics is well known for rather unrealistic theories based upon fundamentally unsound principles, such as the assumption that all things remain equal. Reality parts with academics whenever such assumptions are drawn to a foregone conclusion. However, greater false assumptions, which go unnoticed, lie at the foundation of so many theories in economics – primarily the […]
It is crucial to understand correlations as EVERYTHING fluctuates! There is absolutely nothing that remains constant. You MUST understand that correlations are NOT one for one, and often show changes in advance of turns. It is a lot to keep track of but this is why I try to post a global view to help you see the world […]
Powell reiterated this week that he does not see any short-term need to lower interest rates. The Fed remains delicate in its speech to the public. They knew that inflation would continue rising due to various factors but had to say they were awaiting incoming data. The data is in for Q1 and nothing indicates […]
“I don’t see the ‘stag’ or the ‘-flation’,” Fed Chairman Jerome Powell said during his Wednesday address. Powell believed inflation would be “transitory.” He believed that the economy would come down for a “soft landing.” He believed we would enter the year and see numerous cuts due to waning inflation coming closer to the fictional […]
