Tag Archives: Economics

Cocaine Sales, Prostitution Will Now Be Counted Into Italy’s GDP

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“Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.  Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.  Renzi, 39, is committed to narrowing Italy’s deficit to 2.6 percent of GDP this year, a task that’s easier if output is boosted by portions of the underground economy that previously went uncounted.”

http://www.bloomberg.com/news/2014-05-22/cocaine-sales-to-boost-italian-gdp-in-boon-for-budget.html

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Oil Nations Put Out Welcome Mat for Western Companies

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“For years, Mexico, Iran, Iraq, Algeria and Libya—most of them among the top 10 producers world-wide—were fiercely nationalistic when it came to oil. They either offered Western companies punitive terms to develop their reserves or didn’t do business with them at all, controlling their supplies tightly with state-owned companies.  Now, facing a range of problems, these nations are offering Western companies generous deals to win their help.   In Iran, Libya and Algeria, the population is addicted to low energy prices and high oil-funded social spending. All of that is in jeopardy as countries struggle to boost production—and new revenue is needed to quell potential unrest.”

http://online.wsj.com/articles/SB10001424052702303663604579503920995245090

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Lessons from the Great Austrian Inflation

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“One of these tragic episodes that is worth recalling and learning from was the disintegration of the Austro-Hungarian Empire and the accompanying Great Austrian Inflation in the immediate postwar period in the early 1920s.  For those who say that such things as a hyperinflation, economic chaos, capital consumption and political tyranny ‘can’t happen here,’ it is worth remembering that a hundred years ago, in 1914, few in prewar Vienna could have imagined that it would happen there.”

http://www.thedailybell.com/editorials/35298/Richard-Ebeling-Lessons-from-the-Great-Austrian-Inflation/

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Peak Real Median Income In USA = 1999; Washington DC = 2012

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“Real Median household income peaked way back in 1999 at $56,000 and by 2012 it was down 9%—an unprecedented decline. It goes without saying that Washington’s Keynesian ministrations on the money printing and national debt front didn’t much help.  In fact, the Fed’s balance sheet has expanded from $450 billion  to $4.4 trillion during that period or by nearly 10X. Likewise, the national debt has nearly quadrupled  to $17 trillion during the same period.  Well, all this monetary and fiscal profligacy did apparently help in one precinct: Namely, the Washington beltway where median household income reached its all-time high in 2012 and undoubtedly continues to rise.”

http://davidstockmanscontracorner.com/the-keynesian-economy-in-one-chart-peak-median-real-income-in-usa1999-30-states-2004-or-earlier-washington-dc2012/

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Lew Rockwell: Speaking Truth to Monetary Power

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“We have every reason to expect governments to exploit their positions as monopolists of the production of money in ways that increase their power and benefit favored constituencies. We do not need ‘monetary policy’ any more than we need a paintbrush policy, a baseball bat policy, or an automobile policy. We do not need a monopoly institution to create money for us. Money, like any good, is better produced on the market within the nexus of economic calculation. Money creation by government or its privileged central bank yields us business cycles, monetary debasement, and an increase in the power of government.”

http://www.thedailybell.com/editorials/35335/Llewellyn-H-Rockwell-Jr-Speaking-Truth-to-Monetary-Power/

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Are there major mistakes in the bombshell economics book of the year?

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“Thomas Piketty’s Capital in the 21st Century has been at the center of the economic conversation this year, raising questions about inequality and what to do about it. While disagreements over his conclusions abounded, nearly everyone agreed that collecting the historic data underlying the work was an important accomplishment.  Now, the Financial Times’ Chris Giles reports errors and strange practices in Piketty’s spreadsheets. Piketty collected historical data from numerous wealthy countries to assemble his accounting of centuries worth of national wealth.  Giles, examining his spreadsheets, finds transcription errors, adjustments that don’t add up, and unexplained assumptions.”

http://news.msn.com/are-there-major-mistakes-in-the-bombshell-economics-book-of-the-year

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Hawks Take Flight: Why the Fed’s Hypocritical Dialectic Continues

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“The Fed’s monetary expansion ended in 1929. The 1950s equity rise ended with a bust in the early 1960s. The Nifty Fifty fad ended with the Crash of 1969. The market recovery of the 1970s ended in 1982. The next crash was in 1987. In 1994, an expansion gave way to a recession. A great tech expansion turned sour in 2001. A housing bubble deflated violently in 2008, not just in the US but around the world. And that is where we are now. This expansion has been driven relentlessly upward for some five-plus years. Another year or two and this latest ‘Wall Street Party’ will be finished. We anticipate a downturn that will be as violent or even more so than 2008.”

http://www.thedailybell.com/news-analysis/35332/Hawks-Take-Flight-Why-the-Feds-Hypocritical-Dialectic-Continues/

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David Galland: Lessons from Economic Crises in Argentina

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“You would think they would want more US dollars to flow into the country, but the government policy is so balled up they have put up some barriers to bringing money into the country. That said, there are simple mechanisms you can use to get around the restrictions that are completely legal. One of which involves buying Argentine bonds on the international market and selling them back in Argentina. Unlike in the US, where everything is straightforward and the rules generally make sense, in Argentina it’s a very fluid situation. I love the fact that I feel like I’m getting a degree in economic crises and how to operate in one.”

http://www.internationalman.com/articles/lessons-from-economic-crises-in-argentina,-with-david-galland

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Why Are Bond Yields Falling as Stocks Rally?

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“One of the most striking features of 2014 has been falling Treasury yields in the wake of the Fed’s tapering of QE.  The standard theory goes that, as the Fed withdraws support for longer-dated bonds, bond prices will drop (as demand falls) and yields (which move inversely to prices) will rise.  So much for standard theory…  In addition to the divergence between large caps and small caps (which we wrote about here and here), the divergence between falling bond yields and rising large-cap stock prices is another sign that the rally in the S&P 500 and the Dow may not be as strong as some believe.”

http://www.bonnerandpartners.com/oligarchs-and-poligarchs/

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Where the World’s Unsold Cars Go To Die

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“Houston…We have a problem!…Nobody is buying brand new cars anymore!  Well they are, but not on the scale they once were.  Millions of brand new unsold cars are just sitting redundant on runways and car parks around the world.  There, they stay, slowly deteriorating without being maintained.  Below is an image of a massive car park at Swindon, United Kingdom, with thousands upon thousands of unsold cars just sitting there with not a buyer in sight. The car manufacturers have to buy more and more land just to park their cars as they perpetually roll off the production line.  There is proof that the worlds recession is still biting and wont let go.”

http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

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