Most experts would agree that the biggest threat to the Chinese economy is a real estate bubble. Arguably, China has a massive housing and overbuilding bubble as can be seen on the chart below, showing the cement consumption per capita vs. GDP per capita. Of course, having a housing bubble does not mean China is [...]
A Modern Day Fairy Tale
November 13, 2012 By 1 Comment
Once upon a time (today), in a land not so far away (the USA), there lived a trio of economic wizards (aka economists), whose names shall remain anonymous (Paul Krugman, Greg Mankiw and Ben Bernanke). A fourth wizard, Murry Rothbard, is no longer among the living but resides in the netherworld. The above wizards seldom [...]
When Leverage Fails
July 9, 2012 By Leave a Comment
While it is playing out in slow motion, the demise of Ponzi finance continues. I never imagined that the extend and pretend, delay and “prey”, smoke and mirrors efforts of central banks around the world would have worked into mid-2012. I have learned a lesson. I do not know when the true financial collapse will [...]
Why the Middle Class Is Doomed
April 18, 2012 By 1 Comment
The dwindling middle class, squeezed by higher taxes and lower wages, is losing its political voice. The middle class is doomed by some very basic dynamics. Economic historian David Hackett Fischer laid out the fundamental dynamic in his book The Great Wave: Price Revolutions and the Rhythm of History. By assembling price and wage data [...]
Economic Collapse – A Cautionary Tale
December 12, 2011 By Leave a Comment
A Fundamental Disconnect There is a disconnect between the two enablers of the Washington D.C. oligarchy. One of these enablers is the Federal Reserve Bank, which recently published their latest Beige Book. The “Summary of Commentary on Current Economic Conditions by Federal Reserve District” is published eight times a year. One would assume that the [...]
