Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Kellogg’s Just the Latest to Exit Venezuela

This article appeared online at TheNewAmerican.com on Wednesday, May 16, 2018: 

When workers at the Kellogg’s cereal plant in Maracay, Venezuela showed up for work on Tuesday, they discovered that the plant was closed. A note taped to the fence simply indicated that the company had ended operations: “The current economic and social deterioration in the country has now prompted the company to discontinue operations.”

That left an estimated 400 workers without work, or a paycheck. But that gave the Marxist dictator Nicolás Maduro an opportunity to point the finger at Kellogg’s: “Why are they doing it today? Because we are four days away from elections and they think it will spook the people.… Imperialists! Oligarchs! Nobody can scare our people!”

Kellogg Company had been making cereal in Venezuela since 1961, and at one point was the largest foreign presence in South America after Mexico. But on Tuesday,

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Just How Strong Is the U.S. Economy? $3 Gas Won’t Even Slow It Down.

This article was published by The McAlvany Intelligence Advisor on Wednesday, May 16, 2018:  

The mainstream media has spent an inordinate amount of time, ink, and airtime over the rising cost of gas, blaming most of it on the president’s termination of the “horrible” Iranian nuclear deal. They grieve over the impact that termination will have on everything from bombs in the Middle East to the price of gas in Tuscaloosa. (For the record, it’s $2.51 a gallon, according to GasBuddy – see Sources below.)

Some states are higher, including California ($3.68), Hawaii ($3.63), Washington ($3.35), and Oregon ($3.23). Some states are lower, including Mississippi ($2.56), Arkansas ($2.57), South Carolina ($2.58), and Louisiana ($2.58).

But none of them seem to be dampening the spirits of the American consumer, who is planning his Memorial Day holiday and his summer vacation. Mark Jenkins, a spokesman for AAA, doesn’t expect higher prices at the pump to change many Americans’ plans to travel this summer:

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More Than 40 Million Americans to Travel on Memorial Day Despite Higher Gas Prices

This article appeared online at TheNewAmerican.com on Tuesday, May 15, 2018: 

Mark Jenkins, a spokesman for AAA, doesn’t expect higher prices at the pump to change many Americans’ plans to travel this summer:

 Gas prices are [at] their highest in years, yet that doesn’t seem to be slowing motorists down. The latest round of figures from the EIA [U.S. Energy Information Administration] shows that gasoline demand is significantly higher than this time last year.

 

A strong economy is helping to fuel motorists along, as we approach the most traveled Memorial Day in more than a dozen years.

Jenkins estimates that more than 41.5 million Americans will travel at least 50 miles or more over the Memorial Day weekend — from Thursday, May 24 to Monday, May 28 — the highest number since 2005 when 44 million hit the road or the air. This is five-percent higher than last Memorial Day, and an increase for the fourth straight year, said Jenkins.

Gas prices, according to GasBuddy, which tracks prices at 135,000 gas stations across the country, are closing in on $3 a gallon,

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Merrill Lynch Sees “Risk” of $100 Oil in 2019, Thanks to Iran Sanctions

This article appeared online at TheNewAmerican.com on Friday, May 11, 2018: 

Francisco Blanch, a commodity expert at Bank of America’s Merrill Lynch, wrote Wednesday that his team of prognosticators “see a risk of $100 a barrel of oil next year,” adding that it could happen sooner: “We are concerned that these market dynamics could unfold over a shorter time-frame.”

Those “market dynamics” no doubt cause forecasters such as Blanch many sleepless nights, trying to sort them all out in time to write about them for his clients. First, of course, is President Trump’s cancelling of the Obama-era nuclear deal and promising not only to reapply the previous sanctions (which took one million barrels of oil off the world market every day) but to ramp them up.

Next is global economic growth, which is estimated to increase world demand for oil and its derivatives by at least 1.5 million bpd next year. Then there’s Venezuela, under the control of Marxist Nicolas Maduro, who has decimated his country’s oil production, with further reductions of 500,000 barrels a day likely next year.

Despite higher gas prices in the United States, the average increase in cost of a family’s summer vacation is estimated to be around $200, not likely to impact most Americans’ plans.

Next are the bottlenecks in the Permian Basin, where production has outstripped pipeline capacity, at least for the moment.

One market dynamic that might lead to less oil being used is

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Citigroup: U.S. Will Be World’s Largest Oil Exporter by Next Year

This article appeared online at TheNewAmerican.com on Wednesday, May 9, 2018: 

Citigroup announced last week that exports of crude and finished oil products from the United States would overtake Saudi Arabia’s by next year. Last week, the U.S. exported 8.3 million barrels per day (bpd) of crude and finished petroleum products. While Saudi Arabia exported 9.3 million bpd of crude and refined products in January, the kingdom plans to cut crude exports to under seven million bpd in May.

With the coming sanctions against Iran thanks to the president’s termination of the Iranian “nuclear deal” on Tuesday, up to another million bpd of crude could be removed from global supply, tilting further the advantage to U.S. producers.

Those sanctions set up the U.S. oil industry to continue to fill the vacuum just as quickly as it can find skilled roughnecks to put up idled rigs and complete wells that were drilled just waiting for an opportunity such as this. Those DUCs — drilled but uncompleted — wells number above 4,000 and are being brought online as quickly as possible. Labor and material bottlenecks are being resolved, and with oil in the high 60s and lifting costs in the low 30s, the boom in U.S. production will continue to set records. All at OPEC’s expense.

OPEC’s problems are largely self-inflicted.

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Despite Increasing Use of Robots, the U.S. Economy Boasts Highest Job Openings in History

This article was published by The McAlvany Intelligence Advisor on Wednesday, May 9, 2018: 

Old myths die slowly, including the one that goes: “Robots are taking over the world, leaving millions unemployed!” Doomsayers are likely to refer to an article (from three years ago) that implicitly warned of exactly that. From Intelligent Machines in July, 2015:

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Sell in May and Go Away? Not This Year.

This article was published by The McAlvany Intelligence Advisor on Friday, May 4, 2018: 

This is a hoary strategy derided by critics for years: Buy equities the first trading day after Halloween and sell the last trading day of April. But in 2012, three academics – Sandro Andrade, Vidhi Chhaoccharia, and Michael Fuerst – looked at the available data and concluded that it works: “On average, stock returns [using the “sell in May” strategy] are about 10 percentage points higher in November-May half-year periods than in May-October half-year periods.”

Some say this is a good strategy this year simply because of all the uncertainty. And they’re correct.

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Recession in Trump’s First Term?

This article appeared online at TheNewAmerican.com on Thursday, May 3, 2018:

A historical anomaly is making investors nervous: Since 1909 every single Republican president has experienced a recession during his first term in office. Ryan Vlastelica, writing for MarketWatch, calls it a “curious trend” that could serve as “yet another reason to be cautious” about holding stocks now.

There are certainly plenty of reasons to be cautious:

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U.S. Economy Adds Another 204,000 Jobs in April

This article appeared online at TheNewAmerican.com on Wednesday, May 2, 2018: 

The booming U.S. economy added another 204,000 jobs in April, down slightly from the (revised) 228,000 jobs it created in March, but still more than forecasters predicted. Those forecasters have consistently underestimated the health of the economy and their record remains unbroken. Economists polled by Econoday expected 190,000 new jobs in April.

This is the sixth straight month of job growth over 200,000 which continues to confound observers. “The labor market continues to maintain a steady pace of strong job growth with little sign of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

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Job Market Remains Strong; Unemployment Rate at 50-year Low

This article appeared online at TheNewAmerican.com on Thursday, April 26, 2018:  

Unemployment claims for the week ending April 21 fell to new lows, according to the Department of Labor. On Thursday it reported that new claims fell to 209,000, far below forecasters’ expectations of 230,000. It also was the 24th week of jobless claims fewer than 250,000 and the 164th straight week of claims below 300,000.

Even more remarkable is that the last time jobless claims were this low was during the first term of President Richard Nixon, nearly 50 years ago, when the country’s labor force was just 153 million, compared to today’s work force of 162 million. Translation:

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IEA Declares OPEC Has Accomplished Its Mission: Oil Is Now “Balanced”

This article appeared online at TheNewAmerican.com on Monday, April 23, 2018:

“It’s not for us to declare on behalf of the Vienna agreement [the OPEC production-cut agreement in force since January 2017] that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” said the International Energy Agency (IEA) last week. Those production cuts, aided by the rolling disaster in Venezuela that continues to take crude oil production off the world market, have, according to the IEA, brought down the world’s crude oil stocks within shouting distance of OPEC’s goal: the five-year average of those stocks.

Compliance among members of the OPEC cartel and its friends (including Russia) has been extraordinarily high, with Saudi Arabia helping things along by cutting its own production far more deeply than the agreement called for.

U.S. production, estimated to approach 11 million barrels a day by the end of the year (twice what it was just seven years ago), has been unable to match the production cuts and worldwide demand, which has greatly surprised to the upside.

Add in concerns that on May 12 the president of the United States will decide

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Dick’s Sporting Goods Will Destroy All Its “Assault-style” Rifle Inventory

This article appeared online at TheNewAmerican.com on Monday, April 23, 2018: 

When Ed Stack, president of Dick’s Sporting Goods, announced in February (following the Parkland, Florida massacre) that his company would no longer be selling “semi-automatic” rifles in his stores, he stated:

We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens.

 

But we have to help solve the problem that’s in front of us. Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America — our kids.

What he failed to mention at the time was that the decision affected only 35 stores (those in its Field & Stream division), because back in 2012 he pulled all semi-automatic rifles from the shelves of his signature stores — all 800 of them.

Second Amendment supporters, including The New American, saw this clearly as “posturing” — taking an opportunity to promote his anti-gun views on ABC News when he told the liberal network: “We’re taking these guns out of all our stores permanently.”

Adding to the obvious hypocrisy, Stack continues to allow his stores to sell semi-automatic handguns as well as the well-known and popular Ruger Mini-14, a semi-automatic rifle.

Pro-gun supporters noted that Stack was focusing on the wrong target.

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Would Ed Stack Burn His Company to the Ground Just to Make a Point?

This article was published by The McAlvany Intelligence Advisor on Monday, April 23, 2018: 

Dick Stack opened his first store – a “bait and tackle” fishing supplies store – in Binghamton, New York in 1948. By the time his son Eddie was born in 1955, Dick had grown the business to include general sports merchandise, and by the early 1960s he built his first store, calling it “Dick’s Sporting Goods.” When son Eddie entered the business in 1977 they had two stores. Eddie had a knack, and the business grew. Dick let Eddie take over the business entirely in 1984 (Eddie was 29) and the two-store business became a chain operation by the early 1990s.

Today the business has 800 stores mostly in the Eastern United States, and owns and operates a golf specialty retailer, Golf Galaxy, True Runner and Field & Stream (no relation to the publication). Its Sports Authority and Golfsmith operations went bankrupt in 2016 and 2017, respectively. The business turned Eddie into a billionaire.

And, apparently, a liberal. When the Parkland, Florida massacre took place in February, Eddie issued a press release saying that one of his stores had sold a shotgun to the perp although he didn’t use it in the massacre. But Eddie used the incident as a reason to stop selling so-called “assault” rifles – semi-automatic (one squeeze, one shot) rifles at his primary outlets, numbering about 650 at the time. He said:

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Conference Board Predicts Robust Economy for Rest of Year

This article appeared online at TheNewAmerican.com on Friday, April 20, 2018:

The report from the independent Conference Board released on Thursday confirmed what most already know: The U.S. economy is on a tear, and there appears to be nothing on the horizon to slow it down, at least for the next six to nine months. Said its Director Ataman Ozyildirim:

The U.S. LEI [Leading Economic Index] increased in March, and while the monthly gain [was] slower than in previous months, its six-month growth rate increased further and points to solid growth in the U.S. economy for the rest of the year.

 

The strengths among the components of the leading index have been very [robust] over the last six months.

The LEI, which bottomed out during the Great Recession in the middle of 2009, has rocketed from 73 to

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Empire State Survey: Manufacturing Optimism “Tumbles”

This article appeared online at TheNewAmerican.com on Wednesday, April 18, 2018: 

It wasn’t the headline from the Empire State Manufacturing Survey released on Monday that rattled investors, although it was bad enough: “The general business conditions [the current conditions] index, at 15.8, remained firmly in positive territory [anything above zero is a positive], although its seven-point decline from its March level pointed to a somewhat slower pace of growth.” (Emphasis added.) In March that current conditions index was at 22.5, having come off a previous high in October of almost 30.

It was what followed that rattled more than a few investors seeking cracks in the façade of the Goldilocks economy:

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Runaway Inflation in the United States? Impossible.

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 18, 2018: 

Sinclair Lewis’s It Can’t Happen Here has recently been pounced upon by liberal pundits as a novel that remains relevant today with the election of President Donald Trump. Said left-liberal Salon magazine in its review of the 1935 novel, this is “the novel that foreshadowed Donald Trump’s authoritarian appeal.”

What this author intends is to draw a parallel between the inflation and destruction of the German currency in the early 1920s that led to the rise of Hitler and the slow, steady inflation of the American currency that could lead to the same end: a totalitarian police state here.

Here is what libertarian author, economist, and professor Murray Rothbard wrote about the runaway German inflation:

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Starvation, Suicides Increasing Under Venezuela’s Hyperinflation

This article appeared online at TheNewAmerican.com on Tuesday, April 17, 2018: 

When Venezuela’s legitimate but outlawed National Assembly reported on the country’s runaway inflation numbers last week, the statistics were so astronomical that few could relate to them. Prices increased by 67 percent in March, 453 percent in the first quarter, and 8,878 percent over the last year.

Marxist Nicolás Maduro’s socialist government stopped reporting on those price increases two years ago, and he has sharply criticized any efforts by the National Assembly or websites such as Dolartoday.com since then to tell the truth. A spokesman for the National Assembly, Congressman Rafael Guzman, told a press conference that the runaway prices are beyond the control of the government:

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Tax Foundation: Average American Works 109 Days to Pay All of His Taxes

This article appeared online at TheNewAmerican.com on Monday, April 16, 2018:

Tax Freedom Day, which “represents how long Americans as a whole have to work in order to pay the nation’s tax burden,” falls this year on April 19 according to the Tax Foundation.

With Americans focused on paying their income taxes by April 17, this year’s deadline, the release from the Tax Foundation last week likely gives them little comfort. The average American worker will have to work until April 19 — 109 days — to pay all of his taxes: federal, state, local and municipal. That’s just three days fewer than last year, thanks to Trump’s tax reform law. Put another way, the total tax bill of $5.2 trillion soaks up more than a quarter of the economy’s total gross annual output.

According to the foundation,

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The Economy is Booming. Why Should Anyone be Surprised?

This article was published by The McAlvany Intelligence Advisor on Friday, April 13, 2018:

For a small fee, anyone can download the Harvard Business School’s case study on Apple, Inc. In a nutshell, Apple began in April, 1976 with three employees, no customers, and no revenues. Today it has 123,000 employees, millions of customers, and revenues approaching a quarter of a trillion dollars.

This confounds Keynesians who believe, steadfastly and in the face of overwhelming evidence to the contrary, that it is consumers who drive the economy. On just about every business news show on evening television, one can hear something like “consumers, which are responsible for 70 percent of the economy,…” etc., etc. How do they explain the growth of Apple?

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New Weekly Unemployment Claims Remain Below 300,000, Longest Streak Since 1967

This article appeared online at TheNewAmerican.com on Thursday, April 12, 2018:

Unemployment claims fell last week to just 233,000, far below the historical average, cementing into place the longest streak below 300,000 jobless claims since 1967. A proxy for layoffs, those claims reflect not only an increasing reluctance on the part of employers to let their workers go, but an increasing need for them to bring more workers on in the face of an economic tsunami that’s just now starting to roll into the American economy.

This is just one of many indicators reflecting a growing economy, including an unemployment rate at 4.1 percent, the lowest level since 2000 (and expected to move much lower in the coming months) and employers adding to their payrolls for 90 straight months — the longest economic expansion in history.

Keynesian economists consider that consumers drive the economy, using their pay raises to drive spending on consumer goods and services. Common sense economics — aka Austrian School economics — claims that is putting the cart before the horse: It is capital investment that drives the economy, providing goods and services that consumers discover that they need and want and are willing to pay for.

The classic example is Apple’s iPhone, which

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.