Booms and Busts

Not only are stock markets near all time highs, the amount of margin debt is also at all time highs. Margin debt is money borrowed to leverage the purchasing power of portfolios.

The Fed and Washington politicians tell us how well the economy is doing, but the problems of the last financial crisis remain, and if we look closer, we find stagnant wages, ageing equipment, and lenders looking to scrape the bottom of the barrel.

Why is it that only former Fed officials are willing to say the truth about the economy and monetary policy. I know they don't know the whole truth and they are blinded by power, but why do they always wait till they are "former" to tell the truth.

March’s economic report from the National Association of Credit Management dropped to the lowest it’s been this year. The combined index fell from 53.2 in February to 51.2 this month.

Once a recession sets in, markets can only repair themselves if prices — including wages — are allowed to fall where necessary. The resulting increases in real interest rates are the key to spurring new economic activity.

"In other words, you cannot accurately forecast a recession or financial panic by looking at either the announcement or the completion of the world’s tallest building"

So The Economist apparently does not think too "highly" of my skyscraper theory

Europeans have long been fearful of the prospects of price deflation, but now that it has arrived they have embraced it.

The Fed has been messing with interest rates for a century and suddenly they have forgotten how to raise interest rates?

Data from Japan, Spain, Greece, and the Netherlands all suggest that deflation is not the disaster many economists suggest it is. In fact, there's good reason to believe that economies really start to take off when prices fall the most.