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The Stock Market: Two Scenarios, One Outcome

I just finished updating The Demographic Cliff — my most recent bestselling book on Amazon — for the paperback edition set to come out in August. In it I predict two likely scenarios for the rest of this year and next: In scenario one, the market takes a near 20% correction. I sent an exclusive update out to my Boom & Bust subscribers earlier today, explaining that while we’re in uncharted territory with this endless quantitative easing nonsense, I still consider this a likely outcome. If it happens, the Fed would not only put off raising interest rates indefinitely… but […]

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16 Signs That The Economy Has Stalled Out And The Next Economic Downturn Is Here

If U.S. economic growth falls any lower, we are officially going to be in recession territory.  On Wednesday, we learned that U.S. GDP grew at a 0.2 percent annual rate in the first quarter of 2015.  That was much lower than all of the “experts” were projecting.  And of course there are all sorts of questions whether the GDP numbers the government feeds us are legitimate anyway.  According to John Williams of shadowstats.com, if honest numbers were used they would show that U.S. GDP growth has been continuously negative since 2005.  But even if we consider the number that the […]

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12 Unanswered Questions About The Baltimore Riots That They Don’t Want Us To Ask

Why did the Baltimore riots seem like they were perfectly staged to be a television event?  Images of police vehicles burning made for great television all over the planet, but why were there abandoned police vehicles sitting right in the middle of the riot zones without any police officers around them in the first place?  Why was the decision made ahead of time to set a curfew for Tuesday night and not for Monday night?  And why are Baltimore police officers claiming that they were ordered to “stand down” and not intervene as dozens of shops, businesses and homes went […]

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The Curse of The “Mini” Bubble: China’s Period of Worsening News

On April 16, the Shanghai Composite stock index rose 4.4% and Hong Kong’s market went up 7.9%. The next day, China’s exports got reported down 15% year-over-year… while the stock index rose another 2.9%, crossing 4,300. The news hasn’t changed, but now it’s over 4,500! Is that whacky or what? Exports count for anywhere between 35% to 50% of China’s GDP. Just think of all the made-in-China gizmos and gadgets you might have in your own household! For them, a 15% drop is a big deal. They’re the largest manufacturing and export operation in the world today. That means you […]

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In Every City In America There Are People Ready To Riot, Loot And Set Things On Fire

The city of Baltimore has been transformed into an “absolute war zone“, and the governor of Maryland has declared a state of emergency as the rioting in “Charm City” continues to escalate.  The funeral for Freddie Gray has unleashed a firestorm of violence, and none of it is going to do anyone any good.  To their credit, some of the leaders of the African-American community are standing up and loudly condemning the violence.  They know that smashing cars, throwing rocks at police and looting stores is not going to solve anything.  But just like we saw in Ferguson, there are […]

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Scandinavian models and Russian cash

We used to talk about the “Scandinavian model” when talking about the mixed economy and welfare state. But I’m interested in the other Scandinavian model. In the UK we love a good episode of The Killing or The Bridge. I’m a big fan. (Wallander not so much.) One thing I kept thinking when watching The Bridge recently was how the mobile phone had been integrated into the crime drama. The mobile phone changed crime drama for good. Now you have to have complicated plot devices around why someone doesn’t have a phone, or a signal, or has two phones, or […]

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Civil Unrest Has Begun In Baltimore And This Is Only Just The Start Of Something MUCH Bigger

On Saturday night, the city of Baltimore resembled a warzone as protests over the death of Freddie Gray turned wildly violent.  One eyewitness reported watching the streets around him and his friend “turn into madness” as they left a baseball game between the Boston Red Sox and the Baltimore Orioles.  Car windows were smashed, stores were robbed, chairs were thrown and large numbers of random bystanders were attacked.  One prominent Democrat claims that those committing the violence were “mainly from out of town“, but how would he know that?  Today, there are approximately 2.7 million people living in the Baltimore […]

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Green QE and the Juncker Plan: a response to Richard Murphy

Richard Murphy proposes what he calls “green quantitative easing” to support the Scottish government’s plans for fiscal expansion. I’ve criticised the “green QE” proposal before. But this is a particular framing of it that raises some interesting issues about the nature of currency unions and the purpose of monetary policy. Here’s the heart of Richard’s proposal: It is worth explaining what I think the SNP is referring to when it mentions ‘innovative finance mechanisms’. It is my belief that they are referring to green infrastructure quantitative easing,which was the subject of a speech I made at the Convention of Scottish Local Authorities […]

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The problem of currency union, UK edition

In my last post, I discussed Richard Murphy’s “green QE” proposal in the context of a functioning currency union in which the decision to monetise debt would be made by the UK government. But the context of Richard’s piece opens the door to a disturbing idea. Some Scottish Nationalists interpreted his proposal as meaning that a fully fiscally autonomous Scottish government could demand that the Bank of England buy Scottish government bonds (whether or not issued by a Scottish Development Bank) in order to prevent Scotland’s debt/GDP rising as a consequence of infrastructure investment. The Scottish Nationalists who raised this […]

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Latest on Deflation in the News

Southeast Asia’s borrowers wince as deflation looms | Bangkok Post: business Because of deflation, borrowers are at risk of shouldering heavier debt burdens. In Thailand, loan growth is far below the rates seen after the 2008 global crisis when the authorities unleashed liquidity to revive the economy. In Singapore, bank loans … Read more on Bangkok Post Don’t worry about deflation, just enjoy the fall in prices while it lasts Fear of deflation has two pillars. The first is that if prices fall, or if they look like they are heading in that direction, people will put off making purchases […]

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