Category: Economics

Fed beige book highlights widespread concerns over tariffs.

Will The Rising 10 Year Yield Crash the Stock Market?

23/04/2018

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 Read More »

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

15/11/2017

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 Read More »

Death By China: How America Lost Its Manufacturing Base

11/02/2017

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 Read More »

Trump Administration and Tariffs Versus Quotas

14/11/2016

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 Read More »

Here Comes Supply-Side Economics and the Laffer Curve

10/11/2016

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 Read More »

Pharmaceutical Drug Pricing

3/11/2016

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 Read More »

Macroeconomics of Rising Interest Rates

30/10/2016

The prospect of a Federal Reserve rate hike is driving up the US dollar. The rising US dollar has a significant impact on the US economy and thus stock market. It’s important that traders understand the implications of a rising US dollar from a macroeconomic perspective. Rising US interest rates mean that a lot of Read More »

Macroeconomics Of Rent Control

26/10/2016

California, New Jersey, and New York have the most cities with rent control. Sanctuary cities in California like San Francisco and Los Angeles have some of the toughest rent controls. Rent controls hurt the local economy and make rental unit availability worse. Aggregate deadweight loss from rent controls across the country negatively impacts the US Read More »

Inflation Expectations On The Rise Shifts Aggregate Demand Outward

26/10/2016

Inflationary expectations are the expectations that consumers have concerning future inflation. If buyers expect higher prices in the future, they increase their demand in the present. This shifts the aggregate demand curve outward (to the right) which is good for the economy. For example, if the price of a house is expected to be higher Read More »

Microeconomics and Taxation

23/10/2016

Most government revenue comes from the taxation of transactions and labor. Taxes impact both the supply and demand curves. Taxes cause a buyer to pay more for something and suppliers to receive less. The loss of value for both buyers and sellers is called the deadweight loss of taxation. Taxation has an enormous impact on Read More »

A supply and demand chart showing equilibrium at the center axis of where supply and demand cross.

The Aggregate Supply-Aggregate Demand Model

17/10/2016

Looking at the aggregate supply (AS), aggregate demand (AD) model, we can see where the US economy is currently at in the economic cycle. It is critical that traders and investors understand where we are at in the business cycle so as to be in on the right side of the trade. Timing Bull/Bear cycles Read More »

A Macroeconomic Analysis of ObamaCare

16/10/2016

ObamaCare has created massive shortages within the healthcare sector. In cities, it is common to wait many hours before being seen as hospitals have a shortage of beds. Doctors have stopped taking new patients as they are overwhelmed by the numbers of people coming to see them. Let’s examine what happened from a macroeconomics perspective. Read More »