Shifting consumption from gasoline sales to retail sales does not create economic growth. It is just a "shift" in where the same dollars are spent. However, there has been much "hoopla" over the recent retail sales report for November that saw retail sales jump for the month by 0.7%. While on the surface this appears to be a strong retail sales report, a quick look below the surface quickly destroys that claim.
Russia supplies China with hi-tech military hardware. Russia has negotiated two major natural gas deals with China in the last year. China expects to double its gas usage by 2030. From a Chinese point of view, it is certainly expedient to keep Russia on its side.
The "isolation of Russia" idea is one which has been receiving a lot of traction of late. Russia's recent economic woes have sometimes been covered with barely contained glee despite the hardships that average Russians may have to endure if the rouble continues to collapse … not to mention the inevitable geo-political backlash.
There are some signs of trouble in emerging markets. And the money at risk now is bigger than ever.
Deflation and the attendant risks caused by a sudden revelation about hidden debts will remain the chief concern for investors and policy makers in 2015
- Swiss National Bank Starts Negative Interest Rate of 0.25% to Stave Off Inflows (BBG)
- Putin Strikes Uncompromising Stance Over Crisis Gripping Russia (BBG)
- Sony cancels North Korea movie in apparent win for Pyongyang hackers (Reuters)
- U.S. Said Set to Blame North Korea for Sony Cyber Attack (BBG)
- China’s Short-Term Borrowing Costs Surge as Demand for Money Grows (WSJ)
- Russia Currency Market Bends But Doesn’t Break (BBG)
- Jeb Bush Puts Pressure on Chris Christie for 2016 (WSJ)
- From joy to outrage, Florida's Cuban-Americans greet new U.S. policy (Reuters)
- Russians Quit London Luxury Homes as Only Super-Rich Stay (BBG)
This is it, folks; this is the endgame right in front of our faces. The year of 2014 is the new 2007, with all the negative potential but 100 times more explosive going into 2015. Our nation has wallowed in slowly degrading financial conditions for years, hidden by fake economic statistics and manipulated stock prices. All of it has been a prelude to a much more frenetic and shocking event. We expect a hailstorm of geopolitical crises over the next year to provide cover for the shift away from the dollar. Ultimately, the death of the dollar will be hailed in the mainstream as a “good and necessary thing.” They will call it “karma.” They will call it “progress.” They will even call it “decentralization” and a success for the free market. But it will not feel like a positive development for the American public, who will suffer greatly as the dollar crumbles.
Since the beginning of this year, Wall Street economists and analysts have been consistently prognosticating that following the Federal Reserve's latest bond buying campaign, economic growth would gather steam and interest rates would begin to rise. This has consistently been the wrong call. The recent decline in interest rates should really not be a surprise as there is little evidence that current rates of economic growth are set to increase markedly anytime soon. Consumers are still heavily levered; wage growth remains anemic, and business owners are still operating on an "as needed basis." This "economic reality" continues to constrain the ability of the economy to grow organically at strong enough rates to sustain higher interest rates. This is a point that seems to be lost on most economists who forget that the Federal Reserve has been pumping in trillions of dollars of liquidity into the economy to pull forward future consumption.
The import restrictions on gold that were imposed on Indians in August of 2013 were lifted at the end of last month. Despite the fact that the restrictions were still in place gold importation in November surged an incredible 571% relative to the same month last year at over 151.58 tonnes.
It is time to raise rates, deal with it Wall Street there will never be a perfect time to raise rates based upon Wall Street`s criteria.
Those who voted for the omnibus to avoid a shutdown fail to grasp that the consequences of blindly expanding government are far worse than the consequences of a temporary government shutdown. A short or even long-term government shutdown is a small price to pay to avoid an economic calamity caused by Congress’ failure to reduce spending and debt.
In our dire era of increasing economic inequality, we need a symbol for the oppression of the masses. Now is time for a new revolution. All the talk of the American entrepreneur is bullcockey. Warnings about human complexity and the need for peaceful cooperation is just a smokescreen for tyranny. Our freedom lies in tearing down those better and more well-off than us. We are the glorious heirs to the brave candlemakers who sought to block out the sun. Where our French brethren fought for freedom from natural competition, we fight for the liberty of not feeling inadequate next to an adorable feline. It is the most noble of causes. For if inequality is a crime, then Tarder “Grumpy Cat” Sauce is hostis humani generis.
The shale oil “miracle” was an epochal stunt. Thanks to ZIRP, what every pom-pom carrying cheerleader failed to note was how much of the day-to-day shale operation was being run on junk bond financing. ZIRP destroyed the most fundamental index in the financial universe: the true cost of borrowing money. Finance was the lifeblood of the global economy and scam after scam left it riddled with wormholes of fragility. That fragility has been waiting to express itself and the ability of bank wizards to squelch and conceal it may have come to an end. There will be no quick cure for cratering oil prices and the damage it will wreak among the shale drillers.