Posts Tagged ‘inflation’

Escaping the economic crisis

Thursday, September 29th, 2011

Economists can be an interesting group of people. Although they don’t like to be wrong, occasionally they will fess up when they’ve been way off the mark in the past. To an extent, that’s what happened at this year’s Capital Economics Annual Conference in Chicago. The conference kicked off with an admission from Capital Economics Managing Director Roger Bootle that they had been wrong in their forecast last year. Although they had said world economies would continue to be bad, reality was that economies were even worse than they had expected. (more…)

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Dollar trouble

Wednesday, May 13th, 2009

The justification by many experts for the strong dollar recovery that began last summer was based on an assumption that the U.S. Central Bank was making all the right moves and being more proactive than Europe and Asia. The thinking went, the U.S. economy is bad, but it is worse everywhere else and we will recover first.

 

Now we are seeing signs that Asian and European economies appear closer to turning things around than the U.S. economy. This has bad implications for the dollar.

 

The Financial Times reported on its front page yesterday that there are signs of recovery in China and Europe but “U.S. slowdown continues.”

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Competing forces: USD recovery and U.S. jobs

Friday, September 5th, 2008

Remember last month when the unemployment rate shot up to 5.7% from 5.1%? Well, in August, things continued to deteriorate in the jobs scene. Unemployment increased to 6.1% and nonfarm payrolls decreased by 84,000, with concentrated losses in manufacturing and employment services, interestingly enough. In the past 12 months, according to the Labor Department, the number of unemployed has increased by 2.2 million and the unemployment rate has risen by 1.4% in the past year.

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On the other hand

Wednesday, August 27th, 2008

Reading the minutes from a Federal Reserve Open Markets Committee (FOMC) meeting can be frustrating and downright painful. The committee literally has dozens of hands and keeps on looking at another.

A newswire story citing a minor shift towards concern over slow economic growth from inflation caused me to look at the release closely.

I guess it was there somewhere but darned if I could find it. It is odd that they would abandon their shift from inflation after only just discovering it despite it being apparent for quite some time. But as Economist John Williams noted in the July issue of Futures, “The Fed is not concerned with inflation. It is not concerned about the economy…its primary function is keeping the banking system solvent.”

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Inflation concerns

Thursday, June 26th, 2008

Several headlines yesterday highlighted the Federal Reserve’s emphasis on inflation after announcing no policy change in the Fed Funds rate following its June FOMC meeting. But reports of the Fed’s inflation concerns appear overblown as there was no action attached to it.

Evidence of a significant elevation in inflation was right there for the Fed to see back in September when it chose to embark on an historically aggressive easing campaign. Just because it chose to ignore inflation or at least place it on the back burner to worry about on another day and deal with the more immediate concerns of a recession doesn’t mean it wasn’t there.

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Energy costs drop in April: Really?

Wednesday, May 14th, 2008

There has been growing angst in the Country. People are worried about falling housing values and are having to deal with dramatically higher food and fuel costs. That the government measures inflation without perhaps the two most vital elements—food and energy— is not only non-sensical but given the current state of affairs, dangerous.

People are getting mad. Perhaps there are times when citizens accept, even like, being lied to by government; now is not one of them. So when during a time when gas prices have surpassed the $4 level for a great deal of Americans, the Bureau of Labor’s Consumer Price Index report for April showing that the cost of energy has dropped based on seasonal adjustments could be the last straw. That is right lower energy cost this April according to the CPI.

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