Tag Archives: Economics

Inflation Fuels Crises in Two Latin Nations

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“Mrs. Kirchner’s cabinet reiterated threats to fine or shut down businesses that raise prices.  In Venezuela, soldiers forced retailers to sell electronics goods at bargain-basement prices; one general guaranteed plasma televisions to all Venezuelans on national TV.  A new agency Mr. Maduro created, the National Superintendence for the Defense of Socio-economic Rights, began deploying 480 inspectors this week to check prices and level sanctions against those who set them too high.  The agency aims to enforce a new law that can lead to a 14-year prison term for those convicted of hoarding products or waging ‘economic warfare’ against the government.”

http://online.wsj.com/news/articles/SB10001424052702304851104579362530567845104

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Dad Can’t Buy Daughter Shoes as Argentine Currency Falls

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“Argentines see their standard of living falling as the fastest pace of inflation in a decade erodes their purchasing power and confidence in President Cristina Fernandez de Kirchner’s economic policies. Last month’s 19 percent devaluation of the peso, which drove up prices on products from cars to refrigerators, highlights Fernandez’s dilemma.  In a series of Twitter posts from a summit in Havana last month, Fernandez said banks, importers and exporters were behind ‘speculative’ movements in the markets, without giving more details.  Sales of imported luxury cars rose, as Argentines sold dollars on the black market and then bought the cars at the official exchange rate, saving 40 percent.”

http://www.businessweek.com/news/2014-02-03/dad-can-t-buy-girl-new-shoes-as-argentina-devaluation-ruins-gift

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Bill Bonner: The US Economy Is Growing Much Slower Than You Think

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“The Journal quotes Bill Simon, Wal-Mart’s USA CEO: ‘I never cease to be amazed at the American consumers. They figure out a way to make it work…’  We are not so much amazed as appalled.  We are not so much reassured at this recovery, however weak, as we are alarmed by it.  Where did consumers get the money?  They didn’t earn it. So, they had to run down their balance sheets, either by spending their savings… or taking on debt.  That makes this a new kind of growth: The more you grow the poorer you get.  The economy used to grow by making people wealthier. Now, consumers go further into debt, while their incomes are stagnant or falling.”

http://www.bonnerandpartners.com/the-us-economy-is-growing-much-slower-than-you-think/

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Reuters Explains the Prevalence of Central Bank Money Printing

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“This Reuters article (somewhat surprisingly) makes a good point about central banking policy … that lying is part of necessary bank policy. It also makes a point we’ve been making for months now: While a good deal of discussion will focus on ‘tapering’ and other kinds of tightening, that’s probably not what is going to be happening in the near future.  We are living in a kind of parallel universe where officials create a narrative and the mainstream media covers it – but none of it is true. We will continue to read about money tightening but if you look closely there will always be contradictory indicators as there are currently. Little is real about this ‘recovery’ except the constant stimulation.”

http://www.thedailybell.com/news-analysis/34991/Reuters-Explains-the-Prevalence-of-Central-Bank-Money-Printing/

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Tough Lessons for the Next Generation

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“I wish Dad were here today to tell us what he thinks about events that have come to pass since then — the tech wreck of 2000, the housing bust of 2006, the debt crisis of 2008 and the massive Fed money printing ever since.  The fact remains that no one can predict the future with precision. The best we can do is prepare prudently, and that’s what you should do too.  Never forget the key factor that has always sustained prudent investors through thick and thin — SAFETY. Always favor lower risk investments, taking bigger risks strictly with money you can afford to lose.”

http://www.moneyandmarkets.com/tough-lessons-for-the-next-generation-2-57974

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Bill Bonner: Why the Fed’s ‘Taper’ Won’t Work

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“The Fed had little choice. It has to pretend to go straight at least for a month or two more. Otherwise, it won’t have a shred of credibility left. And so far, so good. It looks like stocks will close the month of January down only 3%. Not catastrophic.  The Fed will continue attending its Counterfeiters Anonymous meetings – until the market really cracks. Then it will roll up its sleeves and get out the paper and ink. Janet Yellen will not want to preside over a crashing market any more than Ben Bernanke did.  Yes, the Fed has broken the US economy and its markets. Now, it owns them.  It can no longer permit the stock and bond markets to do what comes naturally to them – correct their mistakes.”

http://www.bonnerandpartners.com/why-the-feds-taper-wont-work/

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Free Market Healthcare in the Former Eastern Bloc

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“To be honest, most Eastern European countries still have a very centrally planned health system, but if you look at Western Europe, most countries—except the Netherlands and Switzerland—have heavily centrally planned health systems themselves. Some more, some less.  There are a couple of very interesting examples in Eastern Europe, of what privatisation and deregulation of healthcare has achieved. I would like to highlight those, because they are also interesting for people from Western countries to get really good ammunition for arguments in why we need more markets and healthcare. Why do people benefit from more markets in healthcare?”

http://isil.org/giant-or-dwarf-free-market-healthcare-in-the-former-east-block/

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Is your money safe at the bank? Economist says ‘no’, withdraws $1m

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“Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.  Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.  Let me explain: Currently, I receive zero dollars in interest on my $1,000,000. The reason I had the money in Bank of America was to keep it safe. However, the potential cost to keeping my money in Bank of America is that the bank may be unwilling or unable to return my money.”

http://www.pbs.org/newshour/making-sense/is-your-money-safe-at-the-bank-an-economist-says-no-and-withdraws-his/

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Bitcoins in Argentina: A New Safe Haven?

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“It is estimated that between 5,000 and 6,000 Argentines use bitcoins, making it the largest community in Latin America. According to the Fundación Bitcoin Argentina, around 50 to 60 local businesses accept the currency, and there are several hundred bitcoin miners.  Rodolfo Andragnes, vice-president of Fundación Bitcoin Argentina, says that the popularity of Bitcoin can be explained in part by the country’s economic past and present. ‘Argentina is very attentive to all these kinds of things. As a country we, all Argentines, have suffered financial crises many times… They see in Bitcoin an opportunity to avoid the problems that we suffer here,’ says Andragnes.”

http://www.argentinaindependent.com/currentaffairs/bitcoins-in-argentina-a-new-safe-haven/

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Drug Dealers Unfazed By Legal Pot: “Nobody Wants To Be On A List”

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“Sitting in a vegetarian café near his Denver apartment that has a bathroom covered in graffiti like ‘Urban Farming Is The Future!,’ Mario said he feared being on a medical registry while still in school.  ‘I’m afraid that information could get somehow compromised,’ he said about his fears of his loans being affected by being on a medical registry. ‘The last thing I’d want is to get my federal funding cut off.’  Owners have had to pay for an endless list of essentials, from applying for new licenses, packaging the many pounds of green stuff they grow, and instituting the state’s mandatory radio frequency identification system that tracks every single marijuana plant ‘from seed to sale.'”

http://www.buzzfeed.com/rachelzarrell/drug-dealers-unfazed-by-legal-pot-in-colorado

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