Category: Economics

China Increasing Its Gold Reserves


Gold usually starts to do better at the end of the market cycle when the Federal Reserve starts lowering rates. The main reason that markets are at all-time highs is the hope that the Federal Reserve will cut rates at the end of July when they meet. I’m not sure I’m entirely comfortable with that […]

Trader Warning – Collapse of Capex


The collapse of capex is troubling to say the least. Capital spending growth is non-existent. What’s crazy is that the cost of borrowing is already so low so any additional lowering of short-term interest rates is unlikely to spur additional capital investment. Inventories have been built to unsustainable levels in preparation for an escalating trade […]

Peter Navarro Presentation

China’s Secret Economic Warfare Against the US Revealed In Shocking Detail


[glossary_parse]White House National Trade Council and Office of Trade and Manufacturing Policy Director Peter Navarro spoke about the U.S.-China trade relationship. He released a report from the Office of Trade and Manufacturing Policy outlining the secret war that China has been waging against the United States. Ricardian Model Definition The United States sends about $550 […]

Unions did not create the 5 day work week or 8 hour work day, Henry Ford did.

Supreme Court Rules Against Unions


It was a touch day for public sector unions today after the Supreme Court ruled in a 5-4 decision for Janus v. AFSCME that nonunion employees cannot be forced to pay fees to public sector unions. These fees, deemed as “fair share fees”, were collected as the unions believed that those who benefited from their […]

Fed beige book highlights widespread concerns over tariffs.

Will The Rising 10 Year Yield Crash the Stock Market?


Why are interest rates and the U.S. dollar rising? Sure you have traders who are front running the Fed. They are going long interest rate sensitive vehicles in anticipation of the Fed hiking rates. But that’s not the full story. Protectionism and tariffs are inflationary. That is to say they push prices up. The faster […]

Supply and demand chart showing that Google's oligopoly on advertising reduces the quantity of advertising available from different firms causing advertising prices to rise.

Oligopolies and Monopolies


The Trump Administration is following the playbook of Reaganomics. As part of its Reaganomics program, the Reagan Administration cut back sharply on the regulation of everything from monopoly and oligopoly to pollution and product safety, important elements that likewise effect the aggregate supply curve. Let’s review the microeconomics of monopolies and oligopolies. Adam Smith’s Perfect […]

Death By China: How America Lost Its Manufacturing Base


It’s really important that stock traders watch the Death By China movie below as the Trump Administration gears up for a trade war with China. If you want to support quality movies like Death By China, consider purchasing the HD version on Amazon. If your HD TV can get Amazon, you can watch it with […]

Trump Administration and Tariffs Versus Quotas


Protectionist policies in the form of tariffs and quotas are coming from a Trump Administration. It seems appropriate then that we examine tariffs and quotas from a macroeconomics perspective. The two most common ways of restricting trade are with tariffs and quotas. From a political point of view and to prevent a trade war, a […]

Here Comes Supply-Side Economics and the Laffer Curve


Increases in government regulation, taxes, environmental regulations, and ObamaCare on businesses, shifted the aggregate supply (AS) curve inward and thus reduced aggregate demand (AD). With the explosion higher in the cost of doing business, businesses hired fewer workers. In fact, many small businesses reduced the size of their workforce in response to ObamaCare. Less hiring […]

Pharmaceutical Drug Pricing


Pharmaceutical drug pricing is all over the mainstream financial media right now. Let’s examine the macroeconomics of what is happening. The demand for pharmaceutical drugs is inelastic. People that need a pharmaceutical drug prescribed by their doctor will demand that drug regardless of price. As the price of the drug goes up, demand mostly stays […]