Commodity Trade Mantra

Posts Tagged ‘Consumer Spending’

Why ‘Stimulus’ Doesn’t Guarantee an Economic Recovery

The theory is that the additional spending will cause businesses to boost production to meet this demand. Producers will add jobs, triggering increases in consumer spending that will ripple through the economy and fuel a stronger overall recovery. Unfortunately, such government pump-priming hasn’t worked in the past & there’s no reason to believe it will work now.

Low Oil Prices Didn’t Boost Consumer Spending, Nor The Economy - Here's Why

There is no question that lower oil prices have been a big windfall for consumers. But we’re not seeing much evidence that consumers are spending those gains on other goods or services. While a sharp increase in oil prices can reduce U.S. GDP growth, it’s harder to see evidence of significant net gains for U.S. GDP from a sharp decline in oil prices. Here is why.

What Savers Do Under Negative Rates - The "Perversely Negative" Impact Of Going Negative

The initial market reaction on negative rates has been to see it as an act of desperation by central banks to keep up the momentum of economic growth. The risk is that this negative sentiment will infect the real economy, serving to depress spending. If so, the danger is that NIRP will have an impact on economic growth that is not merely non-linear, but perversely negative.

Inflation - The Fed's Nightmare Scenario Is Becoming Reality

Higher inflation is not a dream come true. It is the Fed’s worst possible nightmare. It will expose the error of their 8-year stimulus experiment & the Fed’s impotence in restoring health to an economy that it has turned into a walking zombie addicted to cheap money. If inflation catches fire now, with growth close to zero, the Fed will be completely incapable of controlling it.

Government Shutdown & Debt Limit Questions Answered

A federal shutdown due to a funding lapse looks no less likely than it did two weeks ago. The Senate is expected to begin voting later this week on a funding extension, but the House looks unlikely to act until shortly before the September 30 deadline. Here are some attempts to answer the main questions surrounding the shutdown, debt limit & ramifications.

The Real Reason the Fed Has To Raise Rates in June

If we assume the same continuous trends regarding employment, GDP, retail spending etc. that US has been producing for the last 12 months, then things are going to get real uncomfortable for the Fed and markets come the Sept FOMC Meeting. Markets should actually be begging the Fed for a June rate hike.

Diversification and Discipline Are Key to Investing in Gold

When gold prices plunge as they did in 2013, it’s instinctive for our so-called reptilian brains to hijack our better judgment. Our primordial fight-or-flight response kicks in & too often we choose to fly, only to regret our decision later. Like training for a marathon, investing in gold isn’t for the apathetic. It requires strong-willed discipline.

Financial Markets - How Effective Have The Fed's QE Programs Been?

The rise & gains in the financial markets have come at a time when corporate profits are slowing; economic growth remains weak and geopolitical tensions have been on the rise. This is solely due to the Federal Reserve’s ongoing liquidity injections into the financial markets. How this all ends is really anyone’s guess.

Look At These 17 Facts Before You Believe The US Economy Is Just Fine

No, the economy is most definitely not “recovering”. Despite what you may hear from the politicians and from the mainstream media, the truth is that the U.S. economy is in far worse shape than it was prior to the last recession. This current bubble of false stability will soon burst, and then the real pain will begin.

Why Housing Has Stalled — And Why Everything Else Will Follow

The US housing market is weak and getting weaker. But the real question is what this means for the rest of the economy. Is housing a discrete sector dealing with its own supply/demand issues, or is it a sign of things to come for consumer spending, government tax revenues, and business investment?

US Household Wealth Leans Over an Uneven Recovery

Debts increased meaningfully post-2007 – Now, since the lower income and wealth groups increased their debts post-2007 and enjoyed higher social benefits, they were also to some extent supporting the economy and corporate profits. But what about the future?

2nd Quarter GDP: A Good News/Bad News Story

The recent release by the Bureau of Economic Analysis, of the 2nd estimate of the 2nd Quarter of 2013’s GDP – gross domestic product, was really somewhat mixed and its analysis provides a basis for a debate of this good news/bad news story

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