Economia
By MARC FABER The world has gone from the greatest synchronized global economic boom in history to the first synchronized global bust since the Great Depression. How we got here is not a cautionary tale of free markets gone wild. Rather, it's the story of what can happen when governments ignore market signals and central bankers believe in endless booms. Following the March 2000 Nasdaq bust, the Federal Reserve began to slash the fed-funds rate from 6.5% in January 2001 to 1.75% by year-end and then to 1% in 2003. (This despite the fact that officially the U.S. economy had begun to recover in November 2001). Almost three years into the economic expansion, the Fed began to increase the fed-funds rate in baby steps beginning June 2004 from 1% to 5.25% in August 2006. But because interest rates during this time continuously lagged behind nominal GDP growth as well as cost of living increases, the Fed never truly implemented tight monetary policies. Indeed, total credit increased in the U.S. from an annual growth rate of 7% in the June 2004 quarter to over 16% in early 2007. It grew five-times faster than nominal GDP between 2001 and 2007. The complete mispricing of money, combined with a cornucopia of financial innovations, led to the housing boom and allowed buyers to purchase homes with no down payments and homeowners to refinance their existing mortgages. A consumption boom followed, which was not accompanied by equal industrial production and capital spending increases. Consequently the U.S. trade and current-account deficit expanded -- the latter from 2% of GDP in 1998 to 7% in 2006, thus feeding the world with approximately $800 billion in excess liquidity that year. When American consumption began to boom on the back of the housing bubble, the explosion of imports into the U.S. were largely provided by China and other Asian countries. Rising exports from China led to that country's strong domestic industrial production, income and consumption gains, as well as very high capital spending as capacities needed to be expanded in order to meet the export demand. An economic boom in China drove the demand for oil and other commodities up. Rapidly accumulating wealth allowed the resource producers in the Middle East, Latin America and elsewhere to go on a shopping binge for luxury goods and capital goods from Europe and Japan. As a consequence of this expansionary cycle, the world experienced between 2001 and 2007 the greatest synchronized economic boom in the history of capitalism... -- Lea mais: http://online.wsj.com/article/SB123491436689503909.html
- Us - Grande Revisão Do Pib
Dating back to 1929, the U.S. economy grew at a 3.3% annual pace, which is one-tenth of a percentage point higher than previously published estimates. From 2002 to 2012, the growth rate was 1.8%, up from a previously reported 1.6% pace. Intellectual...
- O Caminho Da Crise
Bailout economics – two decades of monetary excesses 1987 Stock market crash 1988-90 Savings and Loan crisis 1990 Stock market “mini-crash” 1990-91 Gulf War I 1990-91 US mini-recession 1994 Mexican peso crisis 1997 Asian financial crisis...
- Bancos E O Ciclo De Negócios
BOOM AND BUST BANKING The Causes and Cures of the Great Recession Edited by David Beckworth Congress created the Federal Reserve System in 1913 to tame the business cycle once and for all. Optimists believed central banking would moderate booms, soften...
- The Bailout Reader
Fannie Mae and Freddie Mac Freddie Mac: A Mercantilist Enterprise, by Paul Cleveland, March 14, 2005 Fannie Mae: Another New Deal Monstrosity, by Karen De Coster, July 2, 2007 How Fannie and Freddie Made Me a Grumpy Economist, by Christopher Westley,...
- O Papel Do Governo Em Criar A Crise Financeira
How Government Created the Financial Crisis Research shows the failure to rescue Lehman did not trigger the fall panic. By JOHN B. TAYLOR Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should...
Economia
A maior bolha da historia
By MARC FABER The world has gone from the greatest synchronized global economic boom in history to the first synchronized global bust since the Great Depression. How we got here is not a cautionary tale of free markets gone wild. Rather, it's the story of what can happen when governments ignore market signals and central bankers believe in endless booms. Following the March 2000 Nasdaq bust, the Federal Reserve began to slash the fed-funds rate from 6.5% in January 2001 to 1.75% by year-end and then to 1% in 2003. (This despite the fact that officially the U.S. economy had begun to recover in November 2001). Almost three years into the economic expansion, the Fed began to increase the fed-funds rate in baby steps beginning June 2004 from 1% to 5.25% in August 2006. But because interest rates during this time continuously lagged behind nominal GDP growth as well as cost of living increases, the Fed never truly implemented tight monetary policies. Indeed, total credit increased in the U.S. from an annual growth rate of 7% in the June 2004 quarter to over 16% in early 2007. It grew five-times faster than nominal GDP between 2001 and 2007. The complete mispricing of money, combined with a cornucopia of financial innovations, led to the housing boom and allowed buyers to purchase homes with no down payments and homeowners to refinance their existing mortgages. A consumption boom followed, which was not accompanied by equal industrial production and capital spending increases. Consequently the U.S. trade and current-account deficit expanded -- the latter from 2% of GDP in 1998 to 7% in 2006, thus feeding the world with approximately $800 billion in excess liquidity that year. When American consumption began to boom on the back of the housing bubble, the explosion of imports into the U.S. were largely provided by China and other Asian countries. Rising exports from China led to that country's strong domestic industrial production, income and consumption gains, as well as very high capital spending as capacities needed to be expanded in order to meet the export demand. An economic boom in China drove the demand for oil and other commodities up. Rapidly accumulating wealth allowed the resource producers in the Middle East, Latin America and elsewhere to go on a shopping binge for luxury goods and capital goods from Europe and Japan. As a consequence of this expansionary cycle, the world experienced between 2001 and 2007 the greatest synchronized economic boom in the history of capitalism... -- Lea mais: http://online.wsj.com/article/SB123491436689503909.html
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- Us - Grande Revisão Do Pib
Dating back to 1929, the U.S. economy grew at a 3.3% annual pace, which is one-tenth of a percentage point higher than previously published estimates. From 2002 to 2012, the growth rate was 1.8%, up from a previously reported 1.6% pace. Intellectual...
- O Caminho Da Crise
Bailout economics – two decades of monetary excesses 1987 Stock market crash 1988-90 Savings and Loan crisis 1990 Stock market “mini-crash” 1990-91 Gulf War I 1990-91 US mini-recession 1994 Mexican peso crisis 1997 Asian financial crisis...
- Bancos E O Ciclo De Negócios
BOOM AND BUST BANKING The Causes and Cures of the Great Recession Edited by David Beckworth Congress created the Federal Reserve System in 1913 to tame the business cycle once and for all. Optimists believed central banking would moderate booms, soften...
- The Bailout Reader
Fannie Mae and Freddie Mac Freddie Mac: A Mercantilist Enterprise, by Paul Cleveland, March 14, 2005 Fannie Mae: Another New Deal Monstrosity, by Karen De Coster, July 2, 2007 How Fannie and Freddie Made Me a Grumpy Economist, by Christopher Westley,...
- O Papel Do Governo Em Criar A Crise Financeira
How Government Created the Financial Crisis Research shows the failure to rescue Lehman did not trigger the fall panic. By JOHN B. TAYLOR Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should...