Commodity Trade Mantra

Posts Tagged ‘Economic Activity’

At Record Valuations - The Market is Now Too Big To Fail

When large concentration of total asset value is dependent on the market, it becomes necessary to maintain the market at all costs. The market has become too systemically important to allow it to fail. And that means policymakers have changed the function of the market. Today, the market is being used as a (false) portrayal of the underlying economy.

How GDP Metrics Distort Our View of the Economy

GDP purports to measure economic activity while largely divorcing itself from quality, profitability, depth, breadth, improvement, advancement & rationalization of goods & services provided. Why does GDP poorly reflect economic size & vitality? Its largely due to 3 fallacious concepts embedded within GDP measurements.

Can Money Printing Cause Deflation?

Over the last 45 years I have observed that, in countries with high monetary inflation, real wages and incomes have tended to decline. Incidentally, this has also been the case since the turn of the millennium in the US, a period in which there has been a colossal expansion of money and credit.

If The Fed Was Truly Data-Dependent, They Would Have Tightened Already

If the Fed were truly ‘data dependent’ they would have tightened already. Yet, it has been difficult to react to this fact, because of the FOMC’s recent history of fluctuating policy objectives and shifting interpretations as to how best to achieve its dual mandate. Simply stated, the goal posts & communication around them keep moving.

Alternative Measures Suggest Weaker Economy

In an economy where activity is beginning to surge, the prices of commodities also pick up, as demand for these increases. Rising economic activity leads to demand for credit & so interest rates also increase. But this is hardly the case, which increases risk of disappointment in months ahead which could be negative for markets.

How A Country Dies - Death Of A Nation

Do people understand what is happening to them & their country? I suspect some have partial awareness. Few appreciate the full consequences of what is happening. People sense there is something wrong, even though they may be unable to identify what that something might be – But always believe it may be temporary.

Unemployment and A Tale of Two Financial Crises

Statistics on unemployment following each recession are clear. Strong economic recoveries translate directly into rapid reductions of unemployment. US economic growth has been anemic & unemployment has remained at high levels. The pace of recovery slowed to 2.1% in 2010 & has persisted at a slow rate since then.

4 Reasons Why America’s Economic Challenges Outweigh Opportunities

Why is government-provided economic security an illusion? There is no way to pay for these benefits without raising tax rates to a degree that would destroy both the economy & financial markets or annihilate the value of the dollar. Then tax receipts would fall along with incomes, capital gains & economic activity.

Is The Economic Recovery Only Statistical?

Since economic recoveries should be a function of economic prosperity across the national spectrum, is the current economic recovery achieving that goal? While Wall Street & top 20% of the population have certainly enjoyed the surge in asset prices due to Fed interventions, has the other 80% seen an increase in prosperity too?

Employment Is A Reflection Of Economic Activity And Growth

With the system of measuring employment being overly complicated & subject to a wide degree of interpretation & manipulation, it is not surprising that the monthly reports draw such emotional arguments. In reality what we all want to know is whether employment is getting better or worse?

QE's Economic Miss & Future Valuation Overshoot

With an aging demographic, increasing levels of indebtedness, and poor fiscal policy to combat the issues restraining economic growth, it is unlikely that continued monetary interventions will do anything other than simply foster the next boom/bust cycle in financial assets.

The Real Reason For The Fed's No Taper Is Not Economic Reality

Something more immediate & not economic reality is most likely behind the “No Taper” : As debt ceiling debate once again looms, any shutdown of the govt, default or restrictive fiscal policies could collapse whatever incremental recovery there has been to date.

Eurozone Recovery Fades - Will The U.S. Follow?

It just seems the U.S. and Eurozone economies have decoupled – With the U.S. more dependent today on exports than the past, the ongoing and deepening, recession in Eurozone will continue to exert a greater drag on the U.S. economy.

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