-Ephesians 5:11-13
This article appeared online at TheNewAmerican.com on Friday, June 14, 2019:
When President Donald Trump learned of the dismal performance of the Chinese economy for all of last year, he tweeted in March: “China posts slowest economic numbers since 1990 due to U.S. trade tensions and new policies. Makes so much sense for China to finally do a Real Deal, and stop playing around.”
China’s No. 2 communist, Li Keqiang, admitted as much at the country’s annual news conference on March 15:
This article was published by the McAlvany Intelligence Advisor on Wednesday, June 12, 2019:
When President Trump tweeted “The United States has VERY LOW INFLATION, a beautiful thing!” on Tuesday morning, he was referring to the latest PPI numbers from the Labor Department. For May, its Producer Price Index came in at a benign and nearly invisible 0.1%. Year over year the PPI was just 1.8 percent, down from 3.1 percent last summer.
Trump should have been referring to the quiescent Fed, which is in a state of confusion. By this time, according to standard interventionist (Keynesian) theory, a 10-year-old economic expansion should be exhibiting signs of inflationary pressures. Instead, real price increases are approaching low levels not seen in years.
The Fed chair Jerome Powell has repeatedly stated that his “target” is 2.0 percent inflation. His reasoning?
This article appeared online at TheNewAmerican.com on Tuesday, June 11, 2019:
Upon reading the latest report from the Bureau of Labor Statistics (BLS) about its Producer Price Index (PPI), President Trump tweeted: “The United States has VERY LOW INFLATION, a beautiful thing.”
What’s beautiful is that, in the month of May, wholesale prices — the prices paid by firms buying products and services from other businesses — scarcely increased: just 0.1 percent. Even better the year-over-year PPI slowed from 3.1 percent last summer to just 1.8 percent today.
The New York Federal Reserve bank reported on Monday that the outlook for future inflation looks rosy as well. Consumers polled by the central bank see lower inflation over the next one to three years. This matches the inflation numbers coming from the Fed’s preferred inflation measure, the PCE (Personal Consumption Expenditures) index.
This puts the lie
This article appeared online at TheNewAmerican.com on Friday, June 7, 2019:
It’s far too early to be writing off the longest-running economic expansion in history, as some in the media appear to be doing. Following the release of May’s jobs report from the Bureau of Labor Statistics (BLS) on Friday, CNBC whined that it was “much worse” than expected, while Jeffry Bartash, writing for MarketWatch, called the report a “warning sign for the economy.”
The headline number was 75,000 new jobs in May contrasted with forecasters’ estimates of 185,000. The BLS also revised lower their estimates for March and April by 75,000. The BLS report comes on the heels of the ADP report on Wednesday showing just 27,000 new jobs were created in May.
Behind those headlines, and the premature handwringing, was much to be celebrated:
This article appeared online at TheNewAmerican.com on Thursday, June 6, 2019:
In January 2016, when the Dow was trading around 16,000, market forecaster Yves Lamoureux predicted that the index would top 25,000 within three or four years. He missed it: The Dow hit that mark on December 31, 2017, two years ahead of schedule.
Last October, with the Dow trading at 24,700, he saw “a large panic event taking shape” as the Fed appeared determined to stall the economy by continuing to raise interest rates. That “event” occurred, dropping the Dow to 22,445 on December 16, a loss of 2,255 points, or nine percent.
Now Lamoureux is forecasting that the Dow will hit 40,000 within the next two years, but with a caveat: There’s another “event” that will occur first. In an interview with MarketWatch on Wednesday, Lamoureux elaborated:
This article was published by The McAlvany Intelligence Advisor on Wednesday, May 22, 2019:
Ford’s announcement of its resurrected Bronco for 2020 shows pictures of steep technical trails heading off into the woods while calling it a “no-compromise midsize 4×4 utility for the thrill seekers who want freedom and off-road functionality, with the space and versatility of an SUV. It’s capable of conquering everything from your daily commute to gravel roads and boulders.” (See Sources below)
This is how capitalism works.
This article appeared online at TheNewAmerican.com on Tuesday, May 21, 2019:
Excessive angst over Ford’s announcement that it was cutting 10 percent of its workforce led CNBC to revise its initial coverage: “This article was updated [corrected] to reflect that Ford is cutting about 10% of its white-collar employees, not 10 percent of its total global workforce.”
CNBC didn’t complete its correction. Ford has 200,000 employees worldwide, with 70,000 of them being salaried, the rest hourly. The cuts apply only to the white-collar positions, and most of them are overseas. Only 2,300 of them apply to employees in the United States, and 1,500 of them accepted buyouts last year. That leaves just 800 to be laid off this year, each of them with severance packages. That’s four-tenths of one percent, CNBC, not 10 percent.
To put Ford’s announcement in perspective, let’s remember
This article appeared online at TheNewAmerican.com on Monday, May 20, 2019:
The millennial generation, also known as Generation Y (GenY), the “Me Me Me Generation” (Time magazine), and the “soccer trophy generation,” is suffering financially, and as a result many are listening to the siren song of socialism to solve their problems.
This is the generational cohort born between 1981 and 1996 (Pew Research’s definition) with more people in it (75 million) than the Baby Boomer generation. They also have less accumulated wealth, own less real property, are marrying later, and having fewer children than any other generational cohort (Silent Generation, Baby Boomers, GenXers, or Generation Z). As a result they are more frustrated and unhappy about their future economic prospects.
All of which have long-term political and economic implications stretching out decades into the future.
Millennials are helping drive down the number of births to their lowest levels in 32 years. Translation:
This article was published by The McAlvany Intelligence Advisor on Wednesday, May 15, 2019:
In 1779, Ned Ludd, an apprentice hand weaver, smashed two stocking frames because of his fear that the improved machinery would put him out of a job. The resistance to automation began in Nottingham, England, and became widespread in the early 1800s. Over time, its attractiveness waned thanks both to government intervention and the awareness that lowering the cost of textiles through automation benefited everyone wearing clothes.
Ned would be astonished at the automation taking place in the U.S. today. Amazon is quietly installing machines called CartonWraps and SmartPacs in its never-ending quest to serve its customers more quickly at lower cost. In busy warehouses serving Seattle, Frankfurt, Milan, Amsterdam, and Manchester, the company is taking the tiring work employees were doing – each spending up to 10 hours a day taking products and building shipping boxes to fit them for shipping – and giving it to robots.
The robots work four times faster than humans
This article appeared online at TheNewAmerican.com on Tuesday, May 14, 2019:
Amazon is quietly installing machines called CartonWraps and SmartPacs in its never-ending quest to serve its customers more quickly at lower cost. In busy warehouses serving Seattle, Frankfurt, Milan, Amsterdam, and Manchester, the company is taking the tiring work employees were doing — each spending up to 10 hours a day taking products and building shipping boxes to fit them for shipping — and giving it to robots.
The robots work four times faster than humans
This article appeared online at TheNewAmerican.com on Thursday, May 9, 2019:
After lying fallow for nearly four years, the Export-Import Bank is being revived by one of its most vociferous critics: President Donald Trump. On Thursday the Senate, at the urging of the president and with the assistance of Senate Majority Leader Mitch McConnell, confirmed three people to fill vacancies at the bank, bringing it back to full strength.
That means that the bank, once limited to guaranteeing loans of $10 million or less, will now be able to go full throttle, helping big U.S. companies (who don’t need the help but are always willing to accept it) such as Boeing, Caterpillar, and General Electric with billions in loan guarantees.
The bank’s charter expires on September 30. If, as appears likely, Congress extends it (as it has ever since the bank’s inception in 1934), then not only will the biggest companies in America be able to obtain financing for their exports by putting the American taxpayer at risk instead of themselves, but their export partners will also benefit.
One of those export “partners” is communist China, Trump’s adversary in the escalating trade wars. Trump’s mouthpieces Larry Kudlow and Peter Navarro, who have been pushing for the bank’s resuscitation, claim that since China has its own Ex-Im bank, the United States needs one too — to “level the playing field,” of course.
As senior research fellow at George Mason University Veronique de Rugy warned last fall in an article republished at The New American,
This article was published by The McAlvany Intelligence Advisor on Wednesday, May 8, 2019:
At last count, the federal government’s deficit is growing at $100 billion a month. Barring a miracle, the national debt will hit $30 trillion in less than 10 years.
That’s what makes the latest report from the Federal Reserve, its semi-annual Financial Stability Report, so laughable. It’s worried about a paltry $1.1 trillion that has been lent to companies with less than stellar credit ratings, while ignoring entirely the $22 trillion investors are lending to the U.S government – which sports even worse ratings.
No one remembers the last time that any of the three major credit rating agencies attempted to tell the truth about the government’s shaky financial foundation: it cost the CEO his job.
It was Standard & Poor’s that had the temerity to even suggest that U.S. government debt wasn’t quite as secure as people wanted to believe. It downgraded its assessment of U.S. government debt from AAA by one notch, to AA+, four days after the 112th Congress voted to raise the debt ceiling in 2013 above the $14 trillion level.
The outrage that followed, from left and right, Democrat and Republican, led 18 days later to the head of Standard & Poor’s, Deven Sharma,
This article appeared online at TheNewAmerican.com on Tuesday, May 7, 2019:
For the second time in six months the Federal Reserve has issued a warning about excessive corporate debt. Its Financial Stability Report, released on Monday and issued twice a year, repeated its concerns over rising corporate debt burdens, particularly those being incurred by companies already carrying the most debt.
It said that “leveraged lending” — lending to companies whose debt already exceeds four times their earnings — jumped more than 20 percent last year. And since the first of the year, nearly 40 percent of those loans went to the most highly indebted companies — those with debt levels that exceeded six times their earnings.
Said the report:
This article appeared online at TheNewAmerican.com on Friday, May 3, 2019:
The jobs report released by the Labor Department on Friday confirmed what ADP reported on Wednesday: The U.S. economy generated more than a quarter of a million new jobs in April. As we noted on Wednesday in reporting on the ADP numbers, there’s no reason, outside of Federal Reserve interference, that the Trump economy cannot continue to grow and notch new employment records on a regular basis.
Friday’s report from the Labor Department’s Bureau of Labor Statistics noted at least one new record: “The unemployment rate declined by 0.2 percentage points to 3.6 percent in April, the lowest rate since December 1969.” It also reported that the number of unemployed persons in the economy dropped below six million for the first time in decades.
There were other important takeaways:
This article appeared online at TheNewAmerican.com on Wednesday, May 1, 2019:
Economists polled by MarketWatch expected just 177,000 new jobs to have been created by the U.S. economy in April, once again applying rear-view-mirror thinking to their forecasts. Instead, not only did the economy generate 275,000 new jobs (according to payroll giant ADP with some help from Moody’s), but the gains were across every sector and size of business.
Service-providing jobs, such as professional and business services and education and health services, leapt by 223,000 in April, while goods-producing jobs (construction, manufacturing, and mining) added 52,000. ADP also revised upwards its March report by 22,000 jobs.
Mark Zandi, Moody’s chief economist and resident pessimist, was forced to admit that
This article appeared online at TheNewAmerican.com on Friday, April 26, 2019:
Economic forecasters really ought to get out more. As recently as March, many were saying that the U.S. economy for all intents and purposes had stalled in the first quarter of 2019. They blamed the government shutdown, something called the “wearing off” of the economic stimulus provided by Trump’s Tax Cuts and Jobs Act, and of course, the weather. The consensus of Blue Chip economists yesterday was first quarter growth of 1.5 percent while economists polled by MarketWatch were slightly more optimistic, at 2.3 percent.
Instead, the U.S. economy astonished them all.
This article appeared online at TheNewAmerican.com on Wednesday, April 17, 2019:
The International Red Cross (IRC) delivered 24 tons of medical supplies and 14 generators to Caracas’ airport bound for Venezuela’s hospitals on Tuesday. This was a de facto admission by Maduro’s socialist regime that it couldn’t provide even basic life-sustaining necessities for its people, the initial crack in Maduro’s facade of denial that his government is failing and a very public admission that, once again, socialism has failed to keep its promises of lifting people out of poverty.
Indeed, socialism has reduced what was once one of South America’s most prosperous countries to one filled with
This article was published by The McAlvany Intelligence Advisor on Wednesday, April 17, 2019:
Of course the Tax Foundation doesn’t call it serfdom or slavery. They’re far too kind. Instead they simply report what they found: “Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year.” This year, ironically, TFD happened on Tuesday, the day after every worker’s income tax return was due. That’s five days sooner than in 2017, before Trump’s Tax Cuts and Jobs Act kicked in.
That total tax bill is enormous:
This article appeared online at TheNewAmerican.com on Tuesday, April 16, 2019:
For the second year in a row, Tax Freedom Day for the average American taxpayer comes the day after he is required to file his income tax return. The year before Trump’s Tax Cuts and Jobs Act became law, Tax Freedom Day was five days later: April 21.
In 1900, Tax Freedom Day arrived on January 22.
Although slightly lower the last two years, thanks to Trump’s tax cut law, the average American worker still spends almost a third of the year (105 days) earning enough to pay all of his taxes.
And if deficit spending (future tax liability) is figured in, Tax Freedom Day wouldn’t be April 16 but May 22.
Altogether, American workers pay $5.2 trillion in taxes, more than they do for food, clothing, and housing put together.
Owing to different state income tax rates, etc., Tax Freedom Day (TFD) depends on which state one lives in. A taxpayer in Alaska, for instance,
This article appeared online at TheNewAmerican.com on Friday, April 12, 2019:
Following its monthly poll of economists, the Wall Street Journal reported on Thursday that many respondents believed “even a small boost to [the] federal minimum wage [currently $7.25 an hour] would cause some job loss.” And if the mandated wage was increased to $15 an hour, as some are demanding, job losses would be greater.
The results of the survey were published a day before the Department of Labor released its report on initial unemployment claims for the prior week: Those claims were “196,000, a decrease of 8,000 from the previous week … [and] the lowest level for initial claims since October 4, 1969 when [they were] 193,000.”
In addition, the four-week moving average of initial jobless claims fell to 207,000, “the lowest level for this average since December 6, 1969.”
Translation:
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