Commodity Trade Mantra

Posts Tagged ‘Real GDP’

Why Devaluing the Yuan Won't Help China's Economy

The slowdown in China’s economy was set in motion when the yearly rate of growth of the money supply fell from 39.3% in Jan 2010 to 1.8% by Apr 2012. The effect of this massive decline in the growth momentum of money puts severe pressure on bubble activities. Any tampering with the currency rate of exchange can only make things much worse as far as allocation of scarce resources is concerned.

Fed Admits There Is Persistent Over-Optimism About The US Economy

Real GDP growth forecasts have typically started high, but are revised down over time as incoming data continue to disappoint. Possible explanations for this pattern include missed warning signals about buildup of imbalances in the economy before the crisis. Persistent bias applies to growth forecasts & also of inflation & unemployment.

Why The Stock Market Is Detached From The Economy

While statistical economic data suggests that the economy is rapidly healing, it has only been so for a very small percentage of the players. For most American’s they have only watched the “rich” prosper as the Federal Reserve put Wall Street before Main Street. Moreover; global deflationary pressures have only begun to wash back on the domestic economy.

Why Isn’t Monetary Pumping Helping the Economy?

Printing presses set in motion an exchange of nothing for something. Note that a monetary pumping sets a platform for various non-productive or bubble activities — instead of wealth being used to fund the expansion of a wealth generating infrastructure, the monetary pumping channels wealth toward wealth squandering activities.

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.

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?

Why Some Emerging Markets Are Heading for a Economic Bust

A tighter monetary stance undermines the rate of growth of money supply and thus weakens support for various bubble activities. This sets an economic bust in motion. The main reason for the tighter stance was a sharp decline in exchange rate of domestic currencies against the US dollar.

Yellen Promises More - Evidence Suggests Less

While Yellen remains committed to ongoing QE programs to support the recovery, not surprisingly, the asset markets rallied sharply on her testimony as the primary concern as of late has been the removal, or tapering, of QE that has been primarily responsible for driving asset prices higher.

Gold: Hold It Or Fold It? - Peter Schiff

It’s starting to feel like we are part of a giant poker game against the US government, whose hand is the true condition (unknown to us) of the American economy – So, who should investors believe about gold? Should one hold it or fold it?

Is Saving Money Bad For The Economy?

Fed’s policies mean savers are penalized for their thrift and receive almost nothing in interest on their savings. President Obama proposes to put a cap on qualified retirement plan balances – Apparently, the President agrees saving is “a negative act.”

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