Paris Over Amherst: Food, Energy, and Credit The latest issue of Gregor.us Monthly, Food, Energy, The Spatial Dimension, and Credit uses the present macroeconomic juncture to pose questions about the coming fate of our Labor, Agriculture, and Credit Systems. Obviously, issues surrounding commodities are much in the news of late. Food, and food inflation, are also starting to bear down again but in an interesting way: despite being on the front page, soaring coffee and grain prices appear not to have pierced the psyche of the financial community, just yet. This may be a testament to the ongoing drama with monetary policy in the United States, as the FED faces down debt-deflation. As readers understand, fossil fuels have played an enormous role in the long-cycle upgrading of agricultural yields. During 1997-2002, per capita energy use in the United States declined 1.8 percent, while per capita food-related energy use in the United States increased by 16.4 percent. -Gregor
» An Answer to the Question from Julie Blog for Trading Success: Ray Barros BarroMetrics Views: An Answer to the Question from Julie Julie asked: I would be glad if you could answer me a question, when will your nr. 3 happen? Julie, my best guess is third quarter, especially if China gets serious about containing inflation. Turning to your assumption that inflating the money supply will restore health to an economy. I can’t come at that argument. Deflation in these circumstances is merely the process by which the malinvestment is corrected. The problem with printing money as a means of staving off the reckoning day is the fact that more and more money is needed to produce the same effect. The US FED/Treasury could get the banks to lend simply by not paying interest on the deposits they hold. Is deflation around the corner for the US? Refer this blog post to a friend or colleague…
Economist's View: Stiglitz: Needed: a New Economic Paradigm Joseph Stiglitz says adding bells and whistles to the current vintage of macroeconomic models will not fix what is wrong with them, "Nothing less than a paradigm shift will do": Needed: a new economic paradigm, by By Joseph Stiglitz, Comentary, Financial Times: The blame game continues over who is responsible for the worst recession since the Great Depression – the financiers who did such a bad job of managing risk or the regulators who failed to stop them. But the economics profession bears more than a little culpability. It provided the models that gave comfort to regulators that markets could be self-regulated; that they were efficient and self-correcting. The efficient markets hypothesis ... ruled the day. It is hard for non-economists to understand how peculiar the predominant macroeconomic models were. Fortunately, while much of the mainstream focused on these flawed models, numerous researchers were engaged in developing alternative approaches. ...
The Week in Charts – Buckle the Heck Up! No, I’m not being over-dramatic. It is time to buckle the heck up. The resonant disconnect between reality and the pumping that is going on in the media and among supposed “experts” is at an all time historic, never been here before, Economic Mass Psychosis, HIGH. To Quote John Kenneth Galbraith, “The majority is always wrong.” To prove my point, I’m going to show you the week in charts courtesy of the St. The fallout will affect everyone. The pundits of green shoots will say that the economy is getting better and that the leading indicators are pointing to a dramatic recovery. Since I am talking about inflation and deflation, I think it’s important to reiterate that most people think of inflation as an increase in PRICES and Deflation as a decrease in PRICES. All of the charts below are current and have been updated THIS WEEK or are annotated otherwise. Consumer Sentiment was released Friday and came in well below estimates at 63.2. And how are PRICES behaving? So, those are PRICES.
Scary Drop in Velocity of Money: Is Deflation Knocking? - Last week the government released their first revision to 2Q 2009 Gross Domestic Product (GDP). It was surprising that there was no revision to the initial negative 1.0% numbers. At economic turning points, a lot of wacky things affect the initial sampling and estimates; these are presumably corrected when the actual data is revised. I have an issue over the way GDP is used to measure our economy. Nothing is wrong with the concept of GDP – but it just does not measure enough economic activity. GDP only measures what economists think is the “good” or productive part of our economy. America is a mature economy. This point is brought into sharp focus if you visit Holland or England. And just because things are not produced (the “P” in GDP) does not mean that it does not benefit the economy. With this first revision to 2Q 2009 GDP, enough data was available to the NIPA tables to take a more complete look at economic activity. Yet, even the NIPA tables are imperfect. Follow Steven Hansen
Escape from Global Deflation, A Commentary By Kenneth Rogoff, Economic Counsellor and Director, Research Department, IMF Escape from Global Deflation A Commentary By Kenneth Rogoff Economic Counsellor and Director, Research Department International Monetary FundNihon Keizai Shimbun July 17, 2003 The International Monetary Fund has recently issued a much-discussed research paper on global deflation. Although we view the risk of deflation in the United States as low, our indicators suggest that the prospect cannot be entirely dismissed, and the same would be true for the euro area as a whole, although there are higher risks for Germany. Given apparently tepid growth now in the United States, and with Europe virtually stalled, growing excess capacity is putting downward pressure on prices. Despite the recent rise in long-term rates in Japan, interest rates and inflation rates will remain near or at fifty year lows throughout the globe, and a sufficiently strong negative demand shock could tilt the balance towards worldwide deflation. It is not essential to support monetary easing with current fiscal easing.
The sky is not falling, but it is shrinking Scientists have discovered yet another enigma about our planet: the thermosphere has undergone serious shrinkage. The thermosphere is the largest portion of the Earth's atmosphere and is the next-to-last region before you reach the vacuum of outer space. The fact that it has contracted is not surprising; the thermosphere absorbs extreme ultraviolet (EUV) photons from the sun and warms and cools—expanding and contracting—in a pattern that follows the 11-year solar cycle. While we are coming out of one of the longer periods of low solar activity in a century, scientists have found that the thermosphere has shrunk some 28 percent. That's the largest drop in recorded history, and they cannot explain why. Solar cycle 23 (the previous one) was unusually long—12.4 years—and the minimum between it and cycle 24 had the most days without sunspots since 1933, both of which will result in a cooled thermosphere. What could drive such a large change? The authors suggest a few possibilities.
A summary of Dr. Bruce Cordell's 21stCenturyWaves.com Maslow Window Model for readers of Next Big Future by Joseph Friedlander Hi, This is Joseph Friedlander on a guest post for Next Big Future. Here we discuss long wave theory (56 year cycles involving booms, busts, wars, exuberance expeditions and scientific and engineering adventurism). I have spent a few days on and off looking at the 21stCenturyWaves.com site and wanted to give a digest for Next Big Future readers-- but also, to give an idea on a slight modification to the theory. What is long wave theory? Often called Kondratieff cycles, they are lifetime length sinusoidal waves charted against hundred year calendars. IF you believe in them you can see many correlations that otherwise are remarkable but unexplained—others dismiss them entirely. Dr. Dr. Wikipedia on long waves--- Kondratiev waves (also called supercycles, great surges, long waves, K-waves or the long economic cycle) ...Unlike the short-term business cycle, the long wave of this theory is not accepted by current orthodox economics. Karl Denninger writes in Seeking Alpha Hi, Dr. Dr. Dr. Dr. Dr.
An Interview With the Kress Stock Market Cycle Master :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website Stock-Markets / Cycles AnalysisAug 10, 2008 - 12:38 AM GMT By: Clif_Droke I have long been an admirer of the stock market cycle analysis of one Samuel J. During my 10 year acquaintance with Mr. Using his cycle system, Mr. Q: How did you get your start in the business and what brokerage firms did you work for? Kress: I started in the business right after graduating from college in the mid 1960s. Q: In the introduction to your latest publication, you make reference to the superiority of market analysis compared to fundamental analysis. Kress: My gut told me that fundamental analysis was a reactionary, loss prone approach to value whereas sound market analysis is anticipatory and can provide a value added for the investor or trader. Q: What about p/e ratios? A: Earnings are a lagging indicator. Q: What is the philosophy behind your cycle method and how do you apply it to the stock market? Kress: I believe that natural forces overpower those created by man and that everything goes in cycles.
The brain drain: New evidence Some argue that the global competition for talented workers leads to a “brain drain” robbing poor countries of their brightest sparks and stifling development. Others suggest that the local economy can benefit through trade, investment, and knowledge transfer. This column argues that for developing countries with the largest high-skilled migration, neither is spot on – by far the biggest impact is on the migrants themselves. If you were born in the Pacific Islands or the Caribbean and have a university education, the chances are that you have moved abroad – well over half do so (Beineet al. 2008). High-skilled migration is also commonplace in a number of larger developing countries, especially in sub-Saharan Africa. In Ghana, 47% of those with a tertiary education live outside of the country (Docquier and Marfouk 2005). Given such large numbers of high-skilled migrants abroad, it is perhaps no surprise that policymakers (and economists, e.g. Figure 1. Figure 2.
Value of Storytelling - when terminology gets in the way Story FinderUltimate guide to Anecdote CirclesZahmoo Story BankThe Story Test Sticky strategy?Story-workAnti-storiesInsight and StoryStrategic storiesStorytellingNarrative and ChangeCollaborationStory-listeningAbout KMConnecting peopleTacit and Communities Subscribeto RSS Powered by FeedBlitz Good Strategy / Bad Strategy The Power of Habit: Why We Do What We Do in Life and Business The Progress Principle By Years Value of Storytelling – when terminology gets in the way Posted by Mark Schenk - August 26, 2009Filed in Business storytelling inShare0 Email this to a friend Send to printer 1 Comment » One Response to “Value of Storytelling – when terminology gets in the way” Ron Lubensky Says: August 26th, 2009 at 12:31 pm Agreed! If stories are important wouldn't you want to look after them?