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The attempt by households and governments to reduce debt is showing that it is difficult to do. Today, U.S. consumers have more mortgage and credit-card debt than they did five years ago, and the U.S. budget deficit is worsening. Continue reading Attempt to Reduce Debt is Difficult and Impacts Global Economy The U.S. government can choose one of two economic paths: Austerity or irrelevance. Our debt burden and money-happy efforts to avoid the difficult parts of an economic crisis have left an economy virtually immune to stimulus yet devoid of actual growth in jobs or GDP. Continue reading Our Economy: No-Growth and Immune to Stimulus New York University professor Nouriel Roubini said two days ago that in the U.S., a failure to address the budget deficit risks a bond market “revolt.” President Barack Obama’s administration has been negotiating with Republicans, who control the House of Representatives, over cutting the federal government’s long-term shortfall and raising the debt ceiling. Continue reading Debt a Threat to Global Economy – Roubini Even if Fed Chairman Ben S. Bernanke decides to not implement QE3 to provide more quantitative easing, it’s now clear that rates everywhere will stay unusually low for longer than many investors expected. And with the most developed economies barely growing, Asia will be getting an even bigger share of the loose cash careening around the Continue reading Asian Perspectives on U.S. Quantitative Easing The focus of families, statehouses and the White House is “balance sheets”. Reducing liabilities is what everyone is doing. Continue reading Balance Sheets are the Focus in Age of Deleveraging Quantitative easing in the form of QEII has very likely lowered long-term interest rates, at least somewhat, promoting some investment and economic growth. But absent further fiscal stimulus, it’s unlikely to be a cure-all for a slow growing economy with anemic demand. And it is possible, though unlikely, that the Fed could find itself in Continue reading Quantitative Easing – Interest, Inflation Rate Tradeoff Households continue to reduce debt. Continue reading Corporate and Household Debt Declining – Now it’s Government’s Turn What if lack of debt and property ownership information caused the financial crisis? It isn’t enough to have property rights – you need information to accompany those rights. Economist Hernando de Soto believes that the financial crisis wasn’t just about finance—it was about a destruction of knowledge of property ownership. Hernando de Soto: Continue reading Debt and Property Ownership – Destruction of Information Caused Crisis “Investors are diversifying out of U.S. Treasuries and going into global markets,” according to Templeton Asset Management’s Mark Mobius. “That’s been a big change, which has been beneficial for emerging markets generally.” Continue reading Emerging Markets Continue to Grow – Mark Mobius You may think emerging markets are no longer cheap. Even so, there are good reasons to consider emerging markets for a portion of your investments. Continue reading Emerging Markets Still a Compelling Investment |
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