Federal Reserve

The Brutal Trade Deficit

by Wolf Richter •  • Comments Off on 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.

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

by Wolf Richter •  • Comments Off on 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.

When False Premises Become Economic Policy

by Wolf Richter •  • Comments Off on 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.

Geithner: The Truth Could Cause Significant Damage

by Wolf Richter •  • Comments Off on Geithner: The Truth Could Cause Significant Damage

During his congressional testimony, Geithner fretted that the crisis in Europe could undermine confidence. Alas, bank stress tests were supposed to inspire confidence—yet one of the “safest” banks just collapsed. If inspiring confidence isn’t based on facts and transparency, it’s a con game.

Deflation In Japan and its Chances in the US

by Wolf Richter •  • Comments Off on Deflation In Japan and its Chances in the US

Deflation phobia broke out again. Fed governor Bullard grumbled about inflation expectations being too low and threatened to print more money, while deflationistas paint the Japanese “deflation spiral” as sheer horror. So here is my experience with that horror.

Alas, in one category, deflation has hounded us for 10 years.

Inflation As Solution: Hosing The Middle Class

by Wolf Richter •  • Comments Off on Inflation As Solution: Hosing The Middle Class

The FOMC’s often and clearly stated policy of creating sufficient inflation has been effective: up 36% from January 2000. But there are victims: the middle class and ultimately the economy.

Cutting The Deficit: A Bipartisan Joke

by Wolf Richter •  • 6 Comments

President Obama’s proposal to cut the deficit by x trillion dollars is another punch line in the serial joke that our political machinery has been telling us for too long: that deficits will be “cut” in ten years, while the opposite (the jobs bill, for example) is needed immediately.

The scary graph of our gross national debt will look even scarier.

Snapshot Of Our Calamity Economy

by Wolf Richter •  • Comments Off on Snapshot Of Our Calamity Economy

The economy is going back to hell, but stock markets are surging. Nothing new. It always ends in tears. But this time, the Fed’s money-printing strategy will make things only worse. Today’s horrid numbers show us why.

Dear Ben, Please Make Us Trillionaires

by Wolf Richter •  • Comments Off on Dear Ben, Please Make Us Trillionaires

Trillionaire. Just the sound of it! It’s beautiful, Ben. But without your help, we’ll never get there. So, at your meeting next week, think about us. Because the way you make trillionaires is by printing money.

In the Bowels the Jobs Report: 15.4 Million Missing Jobs

by Wolf Richter •  • Comments Off on In the Bowels the Jobs Report: 15.4 Million Missing Jobs

The long-term problem in the horrendous jobs report is the strangely inconspicuous “Employment-Population Ratio” that has been nosediving for over a decade. It’s the definition of a comatose economy.