capital investment

Alan Holmes wrote in 1969 that "in the real world, banks extend credit, creating deposits in the process, and look for the reserves later." Holmes would turn in his grave at Krugman’s naïve assertion, half a century later, that banks need…

In an interview with Louis James, the inimitable Doug Casey throws cold water on those celebrating the economic recovery.

In this issue of the newsletter I want to sketch out a scenario in which rather than analyze policy announcements or make predictions I try to lay out what are the various possible paths open to China. The scenario concerns trade. China’s…

Michael Pettis predicts a hard landing in China. How much will growth slow? The World Bank report apparently doesn’t say, but the consensus has been slowly moving down towards 5-6% annual growth over the next few years. That’s better than…

I caught this comment by Scott Fulwiler on a blog post a 3spoken: the notion that firms can spend and reduce net saving in order to increase net saving of the household sector--while theoretically true and true in an accounting…

This is an interesting one from Bill Gross on financial repression. It goes back to the policies I have called rate easing and permanent zero, where the Fed is practically guaranteeing yields out to three years. Bill Gross sees this and…

In 2008 and 2009 I argued that the crisis we were undergoing would affect every major economy in the world, but not necessarily at the same pace. I said that China would be the last major economy to emerge from the crisis. Why? Because the…

One conclusion from the Fed's actions is that it doesn't care as much about its inflation target as it does about improving the unemployment rate. Thus, it will err on the side of letting inflation rise, if it would improve unemployment.…

I am glad to say that the overinvestment thesis is much more widely acknowledged today than it was even two or three years ago, but one myth, I think, is that most of the overinvestment excesses in China are concentrated in the real estate…

Shanghai’s channel surfing Panda bears are speaking with a little higher pitch this weekend after getting their ‘hood caught in a vicious squeeze and reversal. The stock index has bounced 8.7 percent off its January 6th lows after falling…