While we consider the PPI’s view of inflationary pressures as overstated by simple arithmetic and the math of commodities, there’s no denying that producer prices have risen by a substantial amount. The question, the whole issue, is why. If it is truly because price pressures are building and have grown close to breaking out in systemic fashion, then that would [...]
The Bureau of Labor Statistics (BLS) estimates that in the month of March 2021 somewhere around 916,000 payrolls were added back to the economy. I have to disclaim the figure simply because the statistics used to create it aren’t really all that precise; piecing together data from a survey of 145,000 business establishments, a fraction of the economy’s total, the [...]
At the very least, you have to recognize the correlation. If you aren’t willing to consider causation, in part, there’s troubling coincidence in every place around the world between huge government deficits and less growth (therefore the constant inflation "puzzle"). You can argue that the former causes the latter, and that’s absolutely a valid case; when things get rough, neo-Keynesians [...]
Eurodollar futures are derivative, cash-settled contracts linked to 3-month LIBOR (forget about SOFR and the official hatred of this offshore dollar rate regime). Though that rate acts independently especially at the worst times (thus, the hate), it is heavily influenced by the front-end monetary alternatives set by the Federal Reserve’s monetary policy (IOER, RRP). Because of this, LIBOR kind of [...]
There is, or at least can be, value in treating economic variables in the way econometrics does for the purposes of understanding generalized behavior. The problem for Economists, these statisticians, is that they’ve turned stylized lessons drawn from regression analysis into literal rules defining their worldview. By 1957, Milton Friedman had already been busy publicizing just those. Positive Economics was [...]
The Chinese were first to go down because they had been first to shut down, therefore one year further on they’ll be the first to skew all their economic results when being compared to it. These obvious base effects will, without further scrutiny, make analysis slightly more difficult. What we want to know is how the current data fits with [...]
It really is about abnormality. What I mean by that is, contrary to popular imagination fed by the Fed and other central banks, ever since 2008 the inflation paradigm has changed. The first global financial crisis (GFC1) has proven time and again how it wasn’t a one-off, and since it was a monetary breakdown (global dollar shortage) that’s been permanent [...]
According to newly revised BLS benchmarks, the labor market might have been a little bit worse than previously thought during the worst of last year’s contraction. Coming out of it, the initial rebound, at least, seems to have been substantially better – either due to government checks or, more likely, American businesses in the initial reopening phase eager to get [...]
The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve [...]
This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and [...]
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