This thing, this massive supply disruption is a perfect example of a positive feedback loop. It began with government (over)reaction to COVID, as noted here impacting both supply and demand. Those two curves have behaved in classic fashion, inelastic supply unable to efficiently respond to an artificial outward shift in demand. The resulting impact price-wise as pure economics (small “e”).A [...]
Technically speaking, the rebound from the 2020 recession wasn’t strictly a supply shock. That was a huge part of it, no doubt, but a near-concurrent demand shock, if you will, also materialized. The combination of the two left the public bewildered, believing it an actual inflationary impasse which could only be further passed on into this year.Consumer prices did rise, [...]
Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it isn’t inflation, they’re thinking, it soon will be. Maybe not 1970’s bad, not yet, at the very least something like then.The bond market doesn’t just disagree, it keeps doing so vehemently. Nothing new, bond [...]
Maybe the problem is the slogans, though I seriously doubt it. There are, admittedly, way too many and perhaps there is something lost in the translation. Going from Chinese to English can be notoriously tricky, and by sheer number of official catchphrases odds are a few are going to be miscast at the very least. Rebalancing. Rejuvenation. Dual Circulation. No [...]
Today is the 50th anniversary of the "Nixon shock", the day President Richard Nixon closed the gold window and ended the post-WWII Bretton Woods currency agreement. That agreement, largely a product of John Maynard Keynes, pegged the dollar to gold and most other currencies to the dollar. It wasn't a true gold standard as only other countries that were party [...]
You know things have really changed when Economists start revising their statements more than the data. What’s going on in the global economy has quickly reached a critical stage. This represents a big shift in expectations, a really big one, especially in the mainstream where the words “strong” and “boom” couldn’t have been used any more than they were. If [...]
I am no fan of John Maynard Keynes. But this isn’t to say that there is nothing worthwhile about Keynes’ work. Indeed, it is a logical fallacy that one can’t object to his conclusions while at the same time admiring some of the ways with which he arrived at them. There is a lot about what Keynes thought, and wrote, [...]
There are more than 300 PhD Economists working on staff for the Federal Reserve. The central bank tells us that they “represent an exceptionally diverse range of interests and specific areas of expertise.” Perhaps, but they are all PhD Economists, aren’t they? These highly educated people cover a broad range of topics, for sure, and all from the same starting [...]
It’s been a few years since Japan’s top central banker has been invited to Jackson Hole. The Kansas City branch of the Federal Reserve is today hosting the opening of its annual symposium. Typically, the introduction is given by the President of the KC Fed and then opening remarks from whomever is Chairman of the FOMC. Outside of those, the [...]
Even the apocalypse is a process that takes time. Like a financial crash that isn’t really a condensed all-at-once occurrence, the retail industry’s long-described reset has for another year reached even greater proportions in 2018. It’s not clear when the term first showed up, but by now it is a mainstream staple. No article on the state of retailers is [...]
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