There are many who believe that the use of energy is critical to the growth of the economy. However, the thing that is not as apparent is that growth in energy consumption is dependent on the growth of debt. Both energy and debt have characteristics that are close to “magic,” with respect to the growth of the economy. Economic growth can only take place when growing debt (or a very close substitute, such as company stock) is available to enable the use of energy products. The situation we are facing today is one in which growing debt has been holding up oil prices and other commodity prices for a long time. We are now reaching limits on this process, as evidenced by growing wealth disparity, low commodity prices, and the frantic actions of governments leaders around the world regarding slow economic growth and the need for more stimulus.
Everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that’s all rejected in favor of a rentier class evolving into an oligarchy. Financiers in the 1% are going to pry away the public domain from the government and privatize it so that they get all of the revenue for themselves. It’s all sucked up to the top of the pyramid, impoverishing the 99%. “As long as you can avoid studying economics, you know what’s happened. Once you take an economics course you step into the brainwashing of an Orwellian world.”
Even if keeping policy unchanged might once have been the correct decision, it’s not now. The failure to deliver, especially after Governor Kuroda’s comments about currency appreciation had driven hopes for further easing so high, is terrible news for the Japanese economy. Not to mention a further blow to the BOJ’s credibility. The immediate surge in the yen and the panicked sell-off in equities were the most obvious examples of trader disappointment. And the currency’s rally will put further downward pressure on both growth and inflation.
Japan has proven that decay can be stretched into decades, but it has yet to prove that gravity can be revoked by central bank monetary games.
The standard narrative we are told by the government and their lapdog media is that tax avoidance is something that self-centered rich assholes do so that they can buy more Ferraris. This is complete propaganda. Taking legal steps to reduce what you owe is all about ensuring that your labor goes to the causes that YOU believe in, rather than funding spy agencies and bombing raids on children’s hospitals.
Most recent analyses of oil prices have focused on the amount of mismatch between supply and demand, and the need to craft a temporary agreement to reduce oil production. The thing that is missing in this discussion is an analysis of buying power of consumers. Is the problem a temporary problem, or a permanent one? Lack of oil supply may bring a temporary spike in oil prices, but it cannot fix a permanent problem with consumer spending around the world.
The asylum policy that emerged from last month’s EU-Turkey negotiations has four fundamental flaws, according to Billionaire puppet-master George Soros, which combined pose an "existential threat to Europe." His solution is 'simple' - Accept 500,000 refugees per year costing $34 billion year (via "surge" funding through more borrowing, and a newly-created refugee crisis fund from increased VAT on member states) or else, in his words, "the European Union is in mortal danger?"
“The typical investor has usually gathered a good deal of half-truths, misconceptions, and just plain bunk about successful investing.” With the month of April winding up the seasonally strong time of the year, earnings season just ahead and economic growth weak, the risks to the downside far outweigh “hope” of higher prices. Or, is “bad news” still the bear market deterrent?
The unintended consequences of a minimum wage hike in a weak economic environment are not inconsequential. Furthermore, given that businesses are already fighting for profitability, hiking the minimum wage, given the subsequent “trickle up” effect, will lead to further increases in productivity and “off shoring” of jobs to reduce rising employment costs. So much for bringing back those manufacturing jobs.
Now that the topic of billionaire migration is suddenly all the rage, we decided to find out in which US states America's 540 billionaires are to be found. The answer is shown in the chart below.
Customs officials at the Greek-Turkish border crossing of Kipoi have confiscated the largest amount of gold that anyone has ever attempted to smuggle out of the country. The loot was found hidden in a taxi and consisted of 18 bars of unrefined gold, weighing 33.5 kilos, along with four crosses made of oure gold (11.6 grams). The gold was found last Friday during a police check on cars planing to cross the border. The suspects hid seven gold bars and the four crosses in the car’s passenger armrest while the other 11 bars were concealed in their luggage.
Today we finally get some answers to the question on everyone's lips: who are the Americans in the Panama Papers? Surprisingly, there are no politicians of note are in files but plenty of others. Among them: retirees, scammers, and tax evaders, all of whom found a use for secrecy of offshore companies.
"when I look at the current picture of expected tax revenues combined with benefits promised to future generations, this is the most unsustainable situation I have seen ever in my career." The disaster that Druckenmiller sees coming for the United States is all about changing demographics and entitlement spending. They don’t add up to a sustainable situation. Fixing this is going to require some real sacrifice by the American people and that doesn’t sound like a very appealing platform upon which to get re-elected.
Dear Mayor Emanuel, it may be about time to get on the phone with Detroit and ask for pointers on how to efficiently navigate the bankruptcy process...
Wage inequality is really a sign of a deeper problem; basically it reflects an economic system that is not growing rapidly enough to satisfy everyone. Our basic problem is that the world economy is growing so slowly that the ordinary workers at the bottom find themselves with less than an adequate quantity of goods and services. This problem seems to be getting worse rather than better, over time, making the problem a political issue.