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This article was first published by me on Talkmarkets: https://talkmarkets.com/content/economics--politics/for-all-you-inflation-fearmongers-dr-lambert-has-an-answer?post=157380&uid=4798

We can see by the latest reading on the FRED chart that the velocity of money continues to decline. Even with Trump's reflation, we had a sliver of an uptick in the third quarter of 2017 from 1.425 to 1.427. But the chart still looks dismal:


Dr Edward Lambert of Effective Demand Research has an answer for those crying inflation in a response to a question on his article comments:

...If money supply times velocity matches growth in employment, there would be no inflation. But it seems that M*V not only matches growth in employed but doubles it.The only answer I can think of is that M*V is measured upon number of employed, and capacity building. Labor wages are stagnant. Supply-side is optimized and maximized. Inflation is muted to the point that it equals increases in employed people.Before 198…

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/education/tim-duy-stocks-wont-crash-look-for-these-indicators?post=146888&uid=4798

Tim Duy says stocks won't likely crash. He has a chart showing the behavior of our current stock cycle. And he has a set of leading indicators to look for down the road. Tim is very consistent in his pronouncements. He does not see stocks taking the economy down:

But if not market valuations, what should be the focus on investors? My view is that they should be watching for signs that, at a minimum, earnings growth will falter or, probably more importantly, that the economy is set to tip into recession. I tend to think it is more likely that the economy takes the equity market down with it than the opposite.  There is a rule by which stocks operate according to Professor Duy:

The general rule is that if the economy continues to grow, then it is more likely than not that stock prices rise, even if the Fed tighte…

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/stocks--equities/the-great-artificial-intelligence-bubble-and-scam?post=148063&uid=4798

The Great Artificial Intelligence bubble and Scam has made inroads into all facets of American life. The scam of the self checker at your local grocery store is a prime example, and certainly the same arguments can be made about self driving cars, and other artificial intelligence. These all seem to be an attempt to sell unproven and overhyped technology to business and individuals to make money, whether the general concept itself is valid or not! 
Before we look into the economic ramifications of this scam, turned bubble, we can review some weaknesses already made evident.
Because of Amazon's interest in artificial intelligence and Bezos's purchase of Whole Foods, we should check out the grocery scene more carefully. We know from personal experience that if you have produce, checking out become comp…

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/bonds/clever-fed-plan-may-destroy-demand?post=169182&uid=4798

The Federal Reserve Bank, the bank that is supposed to be watching out for the United States but that really only wants to watch out for big finance has created a clever plan. The simplicity of the plan is genius. But the plan guarantees the new normal and only has one major weakness. That weakness is discussed at the end of this article.

Fake reflation, as revealed by Jeffrey P. Snider, is just a small part of the plan. It is much more ambitious.

The plan even enlists the help of big corporations, dirty tricksters, as Ted Bauman calls them, not just big banks.

Let's look at how it all works:

1. The Fed keeps interest rates low or rising slowly on the short end. The Fed knows there is a conundrum at the long end. Even a little rise in longer interest rates is viewed with fear among Wall Street insiders. It must mean reflation. But …

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/financial/repo-watch-looking-for-the-next-economic-crisis?post=146100&uid=4798


Repo watching is an important economic indicator. If repos don't roll over, credit freezes up. It is sort of like looking at a giant glacier, waiting for the big collapse on the edges. You watch and watch and watch, until you are bleary eyed, but then the action happens in a split second.

There are a couple of websites that deal with repo watching, including here at Talkmarkets. Jeffrey Snider, contributor to this website, is a serious repo watcher. Looking into how the system works in simple terms can help understand the economic indicator effect of repo rollovers. There are comments below about how Steve Mnuchin fits into this process.



But briefly we can look at the history of repo watching, as Bear Stearns was the ultimate victim of not rolling over repos. From repo watchers Cechetti and Schoenholtz we can lea…

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/economics--politics-education/kashkari-reveals-dark-secret-fed-plan-for-wages?post=145383&uid=4798

Minneapolis Federal Reserve President Neel Kashkari just revealed a Federal Reserve secret. That secret is that the Fed raises interest rates and slows the economy primarily to clip wage growth. The Fed has other reasons as well, but Kashkari said this, and it reveals a chilling and systematic destruction of labor's share of GDP:
“I think they are making different decisions because they are very worried about accelerating inflation,” specifically an acceleration in wages, Kashkari replied.
“I call this, and I mean this with no disrespect, a ghost story,”  I leave it to others to determine if worry about an acceleration in wages is a ghost story at this particular time. However, it doesn't appear from the following chart that there should be much of a worry about wage growth, though data is d…

This article was first published by me on Talkmarkets: https://talkmarkets.com/content/education/tim-duys-fascinating-take-on-the-state-of-the-economy?post=142523&uid=4798

Tim Duy has a fascinating take on the state of the US economy. I will hopefully try to make sense of his viewpoint and offer another point of view. First, notice his charts above showing the tech economy in what appears to be a slight contraction.

The professor makes this interesting conclusion:

High asset prices alone do not imply that a fall in those prices will bring the economy down. Those asset prices need to be linked in a very tangible way to a fairly significant and widespread imbalance in the economy for their decline to bring about a broader economy collapse. Duy makes the case that a tight Fed brought down the economy in the early 1990's, not a fall in asset prices. One wonders why the Fed is interested in clipping asset prices if they won't impact the economy if the economy is balanced! You m…