inflation

Consumer Prices Rise Highest Since 2007

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Reading Time: 5 minutes One of the major trends of 2018 is likely to be the acceleration of inflation growth, as we have discussed previously in the following articles: Why Inflation Will Increase In 2018 Long-Term Inflation Pressures The Fed has longed for inflation for years because it consistently has been below its goal…CONTINUE READING

Price Inflation Distribution Is Not Uniform In US

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Reading Time: 5 minutes Price inflation is one of the most important economic metrics as it affects the purchasing power of the consumer, monetary policy, and asset valuations. Those who quibble with which metric is the most important try to determine which one is the catalyst for others. That’s like asking whether the chicken…CONTINUE READING

Is Gold A Good Investment?

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Reading Time: 6 minutes While some investors are intellectually brave to even ponder whether gold is a good investment, sadly most investors malign it for even being considered a plausible investment option. Gold is probably the most interesting and at the same time misunderstood asset in the world. Some investors believe that because gold doesn’t…CONTINUE READING

Output Gap: A Recession Timing Indicator

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Reading Time: 5 minutes Output Gap Explained The output gap is the difference between actual and potential economic output and is used by economists to understand the health of the economy. There will never be a metric which tells us how the economy will perform with absolute certainty. Not only is it difficult to…CONTINUE READING

What Comes Next For Housing Prices/Rent?

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Reading Time: 5 minutes Home Equity Is Recovering We’ve previously examined housing related debt in the Q3 report on consumer debt. As we discussed, the housing market took a few years to recover yet the total housing debt consumers have is still below the previous peak. The home ownership rate is only now starting…CONTINUE READING

Why Inflation Will Increase In 2018

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Reading Time: 5 minutes The Perfect Scenario For Stocks With the economy regaining steam in 2017, the number one risk to equities and economic expansion is inflation. The current economic expansion hasn’t produced inflation, as measured by core CPI, because the growth in inflation as a result of QE has been subdued to mainly financial…CONTINUE READING

The Next Recession

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Reading Time: 5 minutes The previous financial crisis was a disaster for many, with housing prices and equities falling precipitously. Since then, there’s been a new crop of ‘forecasters’ who have made a living explaining when the next crisis will be. That’s backwards looking analysis which feeds off people being scared and uninformed. Even…CONTINUE READING

Consequences For Europe During ECB QE Reduction

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Reading Time: 5 minutes In this article we’ll look at the ECB’s monetary policy and the macroeconomic metrics in Europe. The biggest decision in the queue is what the ECB does with its bond buying program. The decision on the size and duration of Quantitative Easing in 2018 will be announced on October 26th.…CONTINUE READING

How The Federal Reserve Decides Policy

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Reading Time: 4 minutes The Federal Reserve has a dual mandate to form an economic environment which keeps prices stable and has maximum stable employment. The Dual Mandate Bullseye chart does a great job of showing the policy objective the Fed has. As you can see, the x axis has an unemployment gauge and the…CONTINUE READING

The Federal Reserve Bank Is Following, Not Leading

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Reading Time: 5 minutes There is a prevailing belief that the Federal Reserve forecasts the economy accurately, which is why every word from Federal Reserve officials moves markets and is very critically examined. Previously we mentioned how some of the Federal Reserve assumptions about inflation and unemployment are inaccurate. It’s important to correct the inaccuracies…CONTINUE READING

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