Commodity Trade Mantra

Posts Tagged ‘Wages’

The Oil Glut And Low Prices Reflect An Affordability Problem

There has been a belief that oil supply decline will come by way of high oil prices. Demand will exceed supply. But it seems that the decline in supply will come through low oil prices. The oil glut seen now reflects a worldwide affordability crisis, which in turn keeps demand depressed. Lack of demand keeps prices low–below cost of production.

Deflation Is A Problem For The Fed

The threat of a deflation, more than six years after the last recession, remains an imminent threat. It is not just a domestic issue, but a global one. The continued hope, of course, is that the next round of interventions will be the one that finally sparks the inflationary pressures needed to jump start the engine of economic recovery.

Central Banks Have Failed Because They Can't Push Wages Higher

Lowering interest rates to zero and issuing unlimited free money for financiers to generate asset bubbles has had a negative effect on wages and household income. This is not accidental or bad luck – Central bank money-printing cannot possibly have any positive impact on wages. “Bad” inflation is prices rising while wages stagnate.

Failure Of The Fed Complicates Its Endgame

To demonstrate it hasn’t failed, the Fed must taper/withdraw its monetary heroin. The abject failure of these policies to aid Main Street while heaping wealth on Wall Street greatly complicates the Fed’s endgame. No matter what the Fed chooses to do, the failure of its policies will soon be revealed to all.

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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