Wolf Richter

Tough Day For Our Calamity Economy

The ugly numbers speak volumes on how the Fed’s policies hurt the real economy. But those policies enable Congress and the White House to run up ruinous budget deficits that make those of the Eurozone look benign.

That’s inflation—not jobs, wages, or GDP.

German-French Fight Breaks Out Over Frigates

Germany and France kissed and made up before the G-20 powwow in Paris last weekend. A contrived show of unity to boost the markets. And it worked. But already, Germany is sniping at France again. Over money. Because German taxpayers might have to subsidize a French company. Via Greece.

Fighting over taxpayer money.

Tokyo Tidbit: High Radiation, False Alarm, Real Danger

All heck re-broke loose online when the Associated Press reported that a local resident, equipped with a dosimeter, had discovered a highly radioactive hotspot in a residential area of Tokyo, 145 miles from the crippled Fukushima nuclear power plant. Foreign media jumped on the story and speculated. But this time, it was different. And what else is hidden under floorboards?

Greece’s Extortion Game

“Tax fraud is a national plague,” said Greece’s finance minister after he found that Greeks owed $50 billion in back taxes. But it’s complicated. And not much will happen to collect them though Greece might go bankrupt in weeks. Meanwhile, civil servants paralyze the country with strikes because salaries and bonuses are on the chopping block—the most curious bonuses….

The Brutal Trade Deficit

At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.

France’s Fishy Denials as Mega-Banks Teeter

“We don’t have any doubt about the solidity of French banks,” said the French government—a week after the collapse of Dexia. All eyes are now on Société Générale and BNP Paribas. BNP is the world’s largest bank with assets of $2.8 trillion, dwarfing France’s $2.1 trillion economy. And they’re desperately trying to sell assets to stay afloat.

Where the Heck is Ron Paul? A Media Boycott Heats Up

NPR’s report on tonight’s GOP debate covered about everything you can cover in a few minutes: Palin’s and Christie’s exit from the race; Cain’s from-the-outside strategy; Romney’s 25% ceiling; and Perry’s effort to make up ground he lost in the last three debates. But where the heck is Ron Paul? And it’s not just NPR.

The China Bubble Makes Contact with A Cactus

Bubbles go on much longer than a rational mind can fathom, especially bubbles that are supported by governments and central banks. Everyone benefits, so everyone (except for a few hapless shorts) pushes to keep them going. But when they burst, they wreak havoc. And in China, there are new ominous signs.

When False Premises Become Economic Policy

“A shame that we can’t see Japan because of the marine layer” is an old joke in San Francisco. The premise that the fog over the Pacific keeps you from seeing Japan is just as false as the premise that running up huge deficits and printing trillions of dollars can create a healthy economy. Yet, that’s the line propagated by the status-quo media and its economists.