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Economy

Economic Indicators

  • The Yield Curve
    Negative yield curves have proved reliable predictors of economic recession. However, recent experience in the United Kingdom and Australia raises questions...
  • Debt Growth
    Debt growth is important because it reveals the level of inflationary pressure in the economy; and inflationary pressure indicates future interest rate policy.

Banks & Interest

  • Interest Rates and the Economy
    Interest rates have a big influence on stock markets because of three factors.
  • Central Banks
    Central banks and interest rates: There is an intrinsic interest rate in any market that matches demand for credit with savings.
  • How Banks Create Money
    How Banks Create Money out of Thin Air: Most money in the economy is held in the form of deposits with banks rather than in the form ...
  • Future Banking Panics
    To protect ourselves from future banking panics we need to understand the underlying causes. Panics are normally precipitated by an insolvency crisis, which then escalates into a liquidity crisis as depositors rush to withdraw their funds.
  • The Fed's Failed Monetary Policy
    Ben Bernanke and I have little in common, but we share the view that any form of recovery is dependent on confidence. Where we differ is in how to restore confidence.
  • Big Picture 2011
    An excellent CNBC interview with Jeremy Grantham where he explains the game the Fed is playing: over-pricing bonds so that investors are forced back into stocks, even when dangerously over-valued.
  • Wright's Model
    Negative yield curves have proved to be reliable predictors of economic recession over the past 50 years. Research by Jonathan Wright, a research economist at the Federal Reserve, questioned whether this relationship still held. But his questions were answered by the GFC in 2007/2008.

Managed Funds

  • Fund Managers
    Investing in Mutual Funds: If you do not have the time or expertise to manage your own investments then mutual funds may be your only option...

Economic Threats

  • Balance Sheet Recession
    Richard Koo, Chief Economist %u2013 Nomura Research, explains why quantitative easing (QE) will not work in the GFC. Japan experienced this over the last two decades; the current crisis is merely a re-run.
  • Debt to GDP
    The real danger posed by debt is once debt becomes a significant fraction of GDP, and its growth rate substantially exceeds that of GDP, the economy will suffer a recession even if the debt to GDP ratio merely stabilizes. By Associate Professor Steve Keen, University of Western Sydney.
  • Cause for Concern
    Serious imbalances in the US economy: Paul Volcker, former chairman of the Federal Reserve (1979 - 1987), in his February 2005 address to the Stanford Institute for ...
  • The Impact of Inflation
    Inflation is the most commonly used economic term in the popular media. A Nexis search in 1996 found 872,000 news stories over the past twenty years that used the word inflation.
  • What's Behind the Interest Rate Conundrum
    INTEREST RATES, RECESSION OR DEPRESSION? Reproduced with kind permission from Aubie Baltin. Before we can even begin to discuss interest rates intelligently, we must first define what it is that we are actually talking about ...
  • How Socialism Works
    A simple illustration of how socialism reduces incentives to work.

Gold

  • Gold-Oil Ratio
    The Link Between Gold and Oil. Gold and crude oil prices tend to rise and fall in sympathy with one another. There are two reasons for this ...
  • Gold and the Dollar
    Gold is generally quoted in US dollars per ounce of gold; so any fluctuations in the strength of the dollar are likely to be reflected in the dollar priceof gold.




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