Monday, January 30, 2012

Interest Rates and Fed Chairmen

Personal Consumption Expenditures

PCE decreased less than 0.1% in December, and real PCE decreased 0.1%. Note: The PCE price index, excluding food and energy, increased 0.2 percent.The personal saving rate was at 4.0% in December.

Friday, January 27, 2012

Home Sales

2011 was the worst year for new home sales since the Census Bureau started tracking sales in 1963. The three worst years were 2011, 2010, and 2009 - and 2008 is also on the worst ten list.

4th Quarter 2011: 2.8% Growth

This is the first of three estimates for the period and marks the best growth rate in a year-and-a-half following a reading of 1.8 percent in the third quarter. But, don’t be surprised if the most recent data is revised lower since downward revisions have been the norm in recent quarters, the third quarter data starting out at a similar level – a 2.5 percent rate – when it was initially reported.


Tuesday, January 24, 2012

Federal Share of State Spending

State officials have become addicted to federal subsidies because they allow them to spend money taken from taxpayers across the country instead of having to ask their voters to pony up the funds. As the following charts shows, total state spending continued to increase during the economic downturn because the federal government picked up the slack. Note that the federal share of total state spending went from 25.7 percent in 2001 to 34.1 percent in 2011.

Thursday, January 19, 2012

Gold: Bull or Bear?

Gold set a record on September 5 at $1,895 an ounce (London PM Fix) and to date has fallen as low as $1,531 (December 29), a decline of 19.2%. In order to determine how long it might take to breach $1,895 again, I measured how long it took new highs to be mounted after big corrections in the past....

Once gold breaches its old high, you'll probably never be able to buy it at current prices again.
That's a rather obvious statement, but let it sink in. Buying now at $1,600 and then watching the price fall to, say, $1,500, wouldn't be fun – but it'll probably hit $2,000 or higher before the year's over, never to visit the $1,600s again this cycle. If that turns out to be correct, the next four months will be the very last time you can buy at these levels. You'll have to pay a higher price from then on.

Tuesday, January 17, 2012

Debt to GDP Ratio

Often pundits will say that our current debt to GDP ratio is not unreasonable because it is not too high relative to the period following the WWII and the Great Depression.

It is true that during the post WWII era, government spending exceeded GDP. Nevermind that FDR’s New Deal actually prolonged the Great Depression. And ignore the fact that despite conventional wisdom, World War II did nothing to create prosperity. As Bob Higgs has argued extensively, no amount of money pumped into a depressed economy can bring about genuine economic recovery unless investors and business leaders feel secure in their property rights.


Thursday, January 12, 2012

How to Measure Defense Spending?

“Defense spending at lowest levels in 60 years”:

In fact, Pentagon spending in real, inflation-adjusted dollars has roughly doubled since 2000 and is up about 50 percent since 1970, at the height of the Vietnam War.

Retail Sales: Increased 0.1% in December

Wednesday, January 11, 2012

North Dakota Oil Production

North Dakota's oil production has now surpassed OPEC-member Ecuador's daily production of 485,000 barrels.

As a result of the ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest state unemployment rate at 3.4% for November, more than 5 full percentage points below the nation's average 8.7% rate for November. There are nine North Dakota counties with jobless rates at or below 2% for November, and Williams County, which is at the center of the Bakken oil boom, boasts the lowest county jobless rate in the country at 0.9%.


Note: The US consumes about 19,000,000 barrels a day.

Monday, January 9, 2012

Federal Budget as Household Budget

Youtube video here:

Friday, January 6, 2012

December 2011 Unemployment: 8.5%

After holding steady at about 9 percent during most of 2011, the jobless rate has now declined by 0.6 percentage points in just the last three months as the number of unemployed persons has fallen from 13.9 million to 13.1 million. During that same time, the size of the labor force has decreased from 154.0 million to 153.9 million, reducing the participation rate from 64.1 percent to 64.0 percent.

A broader measure of job distress – U6 underemployment that includes discouraged workers and those settling for part-time work – fell from 15.6 percent to 15.2 percent, down from a high of nearly 17 percent earlier in the year.

Defense Spending

My thoughts: Is cutting $500 billion over 10 years really that tough?

Tuesday, January 3, 2012

Walter Williams on Greed

Walter Williams writes:

What human motivation gets the most wonderful things done? It's really a silly question, because the answer is so simple. It turns out that it's human greed that gets the most wonderful things done. When I say greed, I am not talking about fraud, theft, dishonesty, lobbying for special privileges from government or other forms of despicable behavior. I'm talking about people trying to get as much as they can for themselves...

Free market capitalism is relatively new in human history. Prior to the rise of capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. Capitalism made it possible to become wealthy by serving one's fellow man. Capitalists seek to discover what people want and then produce it as efficiently as possible. Free market capitalism is ruthless in its profit and loss discipline. This explains much of the hostility toward free market capitalism; some of it is held by businessmen...

Free market capitalism has other enemies — mostly among the intellectual elite and political tyrants. These are people who believe that they have superior wisdom to the masses and that God has ordained them to forcibly impose that wisdom on the rest of us. Of course, they have what they consider to be good reasons for restricting liberty, but every tyrant who has ever lived has had what he considered good reason for restricting liberty. A tyrant's agenda calls for the attenuation or the elimination of the market and what is implied by it — voluntary exchange. Tyrants do not trust that people acting voluntarily will do what the tyrant thinks they should do. They want to replace the market with economic planning and regulation.

read the entire essay