Share
I have been taking a bit of a break as my trip to the Ontario’s Lake Country winds down.  It’s a beautiful place.  But, as Marshall Auerback and I were lamenting, it has become the Hamptons of Canada as everyone from Toronto is up here for the summer holidays.
But, it has been relaxing. Since I [...]

Share
This entry from Gary Shilling comes via John Mauldin’s site InvestorInsight.com where he highlights commentary from some of the best economic thinkers. Shilling, who correctly predicted problems in residential real estate in the US, is in the deflation camp.  He thinks the US will be a slow growing economy prone to recession and high unemployment [...]

Share
The Department of Commerce released the Personal Income and Outlays data for June 2009.  What the data showed was a very unbalanced month in which personal income and savings dropped but personal consumption expenditures rose.  In my view, this is the type of dynamic we should look to avoid as it only increases the disequilibria [...]

Share
This post is going to be a bit wonkish.  I apologize for those of you who are not economics geeks.  Hopefully, you will find it interesting nonetheless.
At the urging of my good friend Marshall Auerback, I have been looking into the Minskyian twist to the neoclassical view of the world.  Economists who follow Hyman Minsky [...]

Share
I happened upon an article about shops being closed in France that highlighted a larger issue about cultural attitudes in the U.S. and Europe regarding work, leisure and material wealth.  I would like to share some thoughts with you on these issues because I think they are significant in regards to savings, debt and other [...]

Share
PIMCO, the world’s largest bond fund, has a new investment outlook by Founder Bill Gross. In it he says that we are in a long-term lower growth pattern as the asset-based economy of yore has melted away.  He warns that this means risky assets should not be one’s investments of choice.
Here are a few choice [...]

Share
The data for personal consumption came out yesterday.  However, I have not had a chance to look at the data and write a post until now.  What I see right now is not good for a sustainable recovery.  Let me tell you why and how this could impact the chances for getting a longer cyclical [...]

Predictions that the savings rate would increase as the Depression in America took hold are coming true. The Bureau of Economic Analysis reported that the savings rate in the U.S. hit 5%.

There seems to be a blame game making the rounds in policy circles these days in which Asia is at fault for the credit crisis and economic downturn. The meme goes like this: Everything was fine until the Asians started manipulating their currencies and creating excess savings to export to the West. This mercantalist policy of low domestic demand, high savings, and an export-oriented economy set up huge macro imbalances that created the debt bubble and recession we see today. Asians need to save less and buy more — and stop manipulating their currency. Do you buy this line of argument? I don’t.

Recently, I posted a video of Peter Schiff making the argument for small government and resisting stimulus. As I see much to like in Peter Schiff’s views, I sympathisize with the broad themes of his message. However, I do not feel he is realistic about what is politically feasible or understands the negative consequences of a ‘let them eat cake’ approach to governance.

Nevertheless, I would have to admit I sounded a lot like Schiff a few months ago and that I have ‘evolved’ away from his viewpoint. Reader Stephen rightly asks “Does ‘Depression Economics’ Change the Rules?” So, the questions I ask myself in this evolution are the following: