As 2017’s first FOMC meeting approaches this Tuesday and Wednesday, we will once again wait on the edge of our seats for the insight of the “Experts.” Last year’s fourth quarter GDP blew a massive hole into the recovery narrative, but with Donald Trump promising a major infrastructure spending package and large tax cuts, there seems to be a renewed push toward raising the Fed Funds rate target to counter rising prices.
Just one week in office, President Trump is already following through on his pledge to address illegal immigration. His January 25th executive order called for the construction of a wall along the entire length of the US-Mexico border. While he is right to focus on the issue, there are several reasons why his proposed solution will unfortunately not lead us anywhere closer to solving the problem.
The legislature of the State of Colorado is considering ending its longtime ban on switchblades. You read that right. In a state where pretty much anyone without a criminal record can purchase a hand gun — and where homicide rates are quite low, mind you — switchblades are verboten.
The National Institute for Health and the National Institute on Drug Abuse recently released a disturbing report on drug overdose deaths. The number of drug overdoses from both legal and illegal drugs increased from approximately 22,000 in 2002 to over 52,000 in 2016, making it a leading cause of accidental death.
As Jeffrey Lacker leads the pack on the Fed’s “concern of overheating” front, last Friday’s 2016 fourth quarter GDP numbers completely contradict the narrative. Coming in at a paltry 1.85% growth rate, the Fed was handed yet another excuse to push off the so-called “normalization of interest rates” further into the future. The Fed’s FOMC again confirmed as much at its February meeting.
At the World Economic Forum in Davos Switzerland, Joseph Stiglitz the Nobel Prize-winning economist argued in favor of phasing out currency and moving toward a digital economy.
The view expressed by Stiglitz is similar to that of former IMF chief economist Kenneth Rogoff who has been arguing for many years that there is an urgent need to remove cash from the economy. It is held that cash provides support to the shadow economy and permits tax evasion. Some estimates suggest this could be up to $700 billion in the US.
With Super Bowl Sunday nearly upon us, we’re once again hearing about all the high-priced television ads scheduled for the event that will amuse and influence us while convincing us to buy the advertisers’ products. For many people, football has even become secondary to the advertisements.
Many viewers may indeed by amused by the advertisements. There is a problem for the advertisers, though. It’s unclear that the ads will actually do much to convince viewers to buy the featured products.
As expected, the first week of the Trump administration has brought a mix of good and bad. The good: Trump has already begun to reverse course on government managed trade agreements, started cutting away at special interests, and seems to be generally offending the Washington bureaucracy.
