Watch for Interest Rates to Rise Soon

The Fed’s attempt to rescue the economy using monetary policy alone has been a fool’s errand. Now they face a Sophie’s choice: (1) Do nothing and watch inflation increase, or (2) drain the excess reserves from the system and watch interest rates rise. Actually, interest rates will rise either way.

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Don’t Blame Households for First Quarter GDP

The U.S. economy is still sick. It will not be cured until (if and when) the current regulatory onslaught emanating from Washington, D.C. is not just slowed, but rolled back. The U.S. needs business climate change.

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Tariffs for the Long Haul[1]

To get around the 25 percent tariff, Ford installs rear windows, rear seats, and seat belts prior to shipping the vehicles to the United States. These vehicles are no longer classified as commercial trucks but as passenger vehicles, which are subject to the much lower 2.5 percent tariff. Upon arrival in Baltimore, Maryland, the rear seats are promptly removed and the rear windows replaced with metal panels—before delivery to the Ford dealers.

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Bay Area Air Quality District Proposes Violation of Constitution

A quick scan of BAAQMD’s massive report shows a lot of concern for concentrations of various pollutants in different locations, but zero consideration of sources. Frankly, that’s stupid. BAAQMD cannot determine the effectiveness of their regulations until they know the percentage of current pollution emitted by exempt structures. Until then they are simply whistling in the dark.

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Tax Policy and Economic Growth

The point I’d like to add is that the U.S. has already done this once. In the 1970s, led by Cornell Professor Alfred E. Kahn, several important industries were deregulated: airlines, trucking, transportation generally, energy, communications (remember the old AT&T monopoly?), and finance (including banking). Each of these industries lowered prices, increased quantity offered and increased the variety of products available to consumers. Arguably, deregulation helped dampen the sluggish growth during those two decades.

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Global Interest Rates Update

What, then, is the meaning of the expected change in the exchange rate, the term on the right side of the = sign? The Greek euro cannot depreciate against the German euro. In this case, we are measuring the default risk premium of the various countries.

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Spam Ultimate Fail

The subject line was “My First Client.” “Swell,” I thought, “real estate, hookers, who knows.” I was about to delete it when I saw the highlighted sentence below.

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Monetary Policy is Like Pushing on a String

Average annual growth rates of M1 and M2 are in the 6% – 8% range. Reserves have averaged 215.25% per year. Reserves are not being loaned. And until lending picks up the Fed might as well close up shop.

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U.S. Government Debt Revisited

Honestly, this material is not difficult and the data is readily available. I always have trouble understanding why people don’t simply look at the facts instead of trusting the media. Nearly everyone in the media, including most of those who report on economics, are illiterate about even the most basic economic concepts. Remember, their college degrees are in journalism or communications. Somewhere along the way an editor decided they knew some economics. They don’t.

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Operation Choke Point: A Win For the Good Guys

The good guys win one! Let’s all be happy for a few days.

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