One way to view a currency, we read somewhere recently, is as a national obligation secured by national assets. Those “assets” are loosely defined as economic growth (GDP) or the tax revenues a government can generate. A growing economy generates royalties and income taxes and demonstrates to international bond investors Australia’s ability to service interest and principal on debt.
October 9th, 2009 | Dan Denning | 18 comments | ContinuedAll Posts Tagged With: "gdp"
Obama Considers New Job Tax Credit
Hey, why not! They had such great success with the Clunker tax credit…and with the first time house buyer tax credit.
October 8th, 2009 | Bill Bonner | 4 comments | Continued
Aren’t You the Least Bit Suspicious that Goldman is Talking Up the Banks?
Goldman Sachs has raised its rating on large banks to “attractive.” In related news, Neal Barofsky, the special inspector general for the Troubled Asset Relief Program has said that the Feds may have, er, not quite told the truth about the health of the banks receiving TARP funds. He didn’t use the word, lie though. How are these two items related? We’ll explain below.
October 6th, 2009 | Dan Denning | 4 comments | Continued
When it Comes to Economic Health, Nothing Beats a Depression
According to a pair of researchers from the University of Michigan, a depression does more for longevity than diet or exercise.
October 5th, 2009 | Bill Bonner | 0 comments | Continued
The Dead Weight Cost of the Stimulus
On 21 September I provided testimony to the Senate Economics References Committee on the damage done by the government’s “stimulus” package. The submission was broken into five separate sections.
October 2nd, 2009 | Dr. Steven Kates | 35 comments | Continued
A Bull Market That’s Missing Parts
For example, corporate earnings are missing. P/E ratios are rising far above the corporate earnings that support them. This puts the market 35% overvalued, on a cyclically adjusted P/E basis, says Smithers & Co.
October 2nd, 2009 | Bill Bonner | 3 comments | Continued
Inflation is Our Future
On one hand, the deflationists are claiming that given the extremely high debt levels in the West, further inflation is impossible.
September 30th, 2009 | Puru Saxena | 4 comments | Continued
We Expect No Recovery from the Economy
..how does it all work? We’re doing some serious thinking this week. What is it that actually causes a depression? A stock market collapse? Or too much debt?
September 29th, 2009 | Bill Bonner | 0 comments | Continued
Jim Grant Declares Boom is Nigh
What is remarkable about the Grant conversion is that his vision gives off so little heat and light. His WSJ article shillyshallies around; rehearses the history of previous recessions…
September 28th, 2009 | Bill Bonner | 0 comments | Continued
HSBC Reveals Days of the Dollar are Numbered
“Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles.
September 23rd, 2009 | Bill Bonner | 10 comments | Continued
Financial Markets Have Clearly Rallied
If it’s true that markets lead economies, markets are telling us that things are going to get much better. The FTSE index of emerging markets is up 99% from its March lows. The S&P 500 is up nearly 60%. And gold itself is up 25%, with much of that move coming in the last few weeks.
September 21st, 2009 | Dan Denning | 10 comments | Continued
When the Stimulus Money Stops Flowing Will the Recession Get Worse?
CNN’s bailout tracker reports that US government stimulus has totaled $2.8 trillion so far this year, with another $8.2 trillion in commitments. Most of this money has gone to the financial sector.
September 11th, 2009 | Chris Mayer | 0 comments | Continued
Feds Want to Increase the Money Supply and Induce People to Spend Money
The question is when. Our view is that they’ll get more than they expect, but later than they want it. We’re looking for another crack in stocks…followed by more fear and loathing in the economy. This will have two major effects…
September 11th, 2009 | Bill Bonner | 0 comments | Continued
The More Money in a Financial System the Less Each Unit is Worth
For the last 10 years, the money supply in the United States has expanded at roughly twice the rate of GDP growth. And the Fed doubled its balance sheet in just the last 18 months.
September 8th, 2009 | Bill Bonner | 1 comment | Continued
The New Normal: Where the Government Plays a Significant Role in Controlling the Economy
In the “old normal” view – preached by politicians left and right and amplified by a compliant media and a smarting financial industry – you should go back to doing what you were doing before. Have a short memory. Buy stocks automatically because they always go up. Get a mortgage and buy a house, perhaps even a second one. Spend money. The government will make more.
September 4th, 2009 | Dan Denning | 17 comments | Continued
