Purchasing Power

Elizabeth Warren’s War On The Poor

We should not quarrel with Senator Warren’s stated goal of protecting the least powerful in society, but we should take issue with many of Senator Warren’s proposed strategies to achieve her stated goal - because they don’t work.

The Fed Has Brought Back "Taxation Without Representation"

So, Wall Street banks control the boards of directors at the Fed banks. The Fed bank boards of directors appoint the committee members who set monetary policy. And the monetary policy they set ends up being a gigantic tax... a transfer of wealth from the middle class to a tiny group of beneficiaries, including the US government and the banks themselves. This is an unbelievable scam... and it truly is taxation without representation. Unelected bureaucrats impose their will over the entire financial system in a way that benefits a handful of people at the expense of everyone else.

Nigeria Hyperinflation Looms As Central Bank Throws In The Towel, Devalues Currency

Less than a month ago, when looking at Nigeria's deplorable economic and reserve situation, we predicted that "Nigeria Currency Devaluation Looms As FX Forwards Crash To Record Lows." Ealier today this prediction came true when Nigeria’s central bank finally threw in the towel when it announced that the it will allow the Naira exchange rate to be market-driven, setting the stage for a devaluation of the currency, and unleashing the latest bout of hyperinflation.

An Everyman's Guide To Understanding Cryptocurrencies

When an asset rises by almost 30% in a few weeks, it tends to attract attention. Recently, that asset was bitcoin (BTC). Are these cryptocurrencies mere fads? Or are they potentially game-changing alternatives to the conventional currencies such as the U.S. dollar, Chinese RMB, Japanese yen or European Union euro? There’s no lack of skeptics and critics of bitcoin and other cryptocurrencies; yet despite concerns about security, criminal use and volatility, cryptocurrencies have proliferated at a dizzying pace. So what are those who can't follow the technical arguments supposed to make of all this?

"We Don't Have A Wage Problem; We Have A Money Problem"

Minimum wage advocates seek to solve a legitimate problem facing American workers: their dollars buy less and less every year. But simply mandating employers fork over more dollars is a little like putting a band-aide on an amputation. It doesn’t do anything to address the underlying problem. Our money is broken, and we need to fix it.

The Pension Bubble: How The Defaults Will Occur

Millions of Americans and Canadians who are counting on pension benefits to fund their retirements risk being severely disappointed. Ironically, as experts worry about stock, bond and real estate market excesses; the biggest challenge facing government bureaucrats and private fund administrators has nothing to do with paying back pensioners. They have known for some time that would not be possible. Their key challenge, will be to ensure that shortfalls occur on someone else’s watch.

Bernanke Blew It Big-Time: He Should Have Raised Rates Three Years Ago

It is now painfully obvious that Ben Bernanke blew it big-time by not raising rates three years ago when the economy and markets enjoyed tailwinds. The former Federal Reserve chairperson, who has claimed the mantle of savior of the global economy, foolishly kept rates at zero until tailwinds turned to headwinds, at which point he handed Janet Yellen the unenviable task of raising rates as the headwinds are strengthening.

American Worker Productivity Drops (Again)

For the second quarter in a row, US worker productivity fell in Q1 (down 0.6% QoQ). Outside of 2015's weather-driven debacle, this is the weakest two quarter tumble in productivity since Q4 2012. Unit labor costs rose 4.5% QoQ in Q1 (revised up from 4.1%) as output actually fell 0.6% (implying a 3.9% rise in compensation). This is the 3rd quarterly drop in output in a row.

The Structure Of Collapse: 2016-2019

Leaders face a no-win dilemma: any change of course will crash the system, but maintaining the current course will also crash the system.

How The "Rest" Of America Lives: Wanting For Work, Buried In Debt

The flyover zones of America are wanting for work and buried in debt. That’s the legacy of three decades of Washington/Wall Street Bubble Finance. The latter has exported jobs, crushed the purchasing power of main street wages and showered the bicoastal elites with the windfalls of financialization. In short, Wall Street loves financial repression because it inflates financial asset values and fuels debt-funded gambling in the casinos. But it’s the opposite of what’s needed in flyover America.