deleveraging

Economic growth is good. But what we want to see is job and wage growth to complement the asset-price growth. Without this catch up on the job and income front, the economy is on an unsustainable course.

This is just a quick follow-up to the last post on debt deflationary dynamics in Europe and the contrast to policy in Japan. I think Yanis Varoufakis has it right that Europe is on the same path as Japan but just not as far along the path.…

Some recent data out of Canada points to a slowdown in growth of consumer indebtedness. According to RBC, the non-mortgage consumer debt has grown at the slowest rate in 20 years. This is clearly a positive development, but when taking…

In the short term, though, a continuation of the currently lax monetary policy is likely to lead to higher assets prices. The investor mindset is very much in risk-on mode at the moment, as documented by the surprisingly calm reaction to…

Yesterday I said that, given the housing rebound, it seemed ever more likely that the US economy would be able to power through the budget cuts from the sequester and the fiscal cliff. This is the asset-based economy at work. There is…

Today I thought I would try a little experiment by beginning to write a daily commentary. I have been thinking about doing this for a while and decided I needed to give it a go here because I don't have an in-depth article I am working on.…

The US trade figures for Q4 2012 came out this morning and they surprised analysts by showing a trade deficit that shrank 21% to $38.5 billion in December. According to Bloomberg News this was a lower deficit than any of 73 economists…

Raghuram Rajan has an interesting post now up on Project Syndicate. The overall tone of it has an Austrian feel as it stresses the failure of stimulus to allow developed economies to attain higher GDP growth a full five years after a…

Let's talk about deficits for a second. The term deficit has some pretty serious negative connotations. So when we use that word, usually the implication is that the deficit is bad. Here's the thing though; as I have written here a number…

This is a brief follow-on to the last post on whether we should be optimistic, in particular now that the US housing market is improving. If you think about it, the problem now is that all debtors - public and private - are taking the…