Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list asks how to define a bubble and if we are in one now........ and the last article says the GDP gap is much bigger than most think it is.
- How Do You Define a Bubble? (And Are We in One Now?) (Barry Ritholtz, Bloomberg)
- Federal Reserve Interest Rates Should Be Near Zero Forever (Warren Mosler, Debate Club, U.S. News & World Report) Warren Mosler contributes to Global Economic Intersection.
A low-rate policy encourages long-term investments for businesses to expand and become more efficient, and for households to invest in new homes, improvements and appliances that can also add to efficiency, all of which increases long-term productivity and our real wealth. Low rates also keep the cost of holding business inventory down, and lower interest costs mean businesses sell at lower prices and also keep the shelves stocked, helping to prevent sudden shortages from disrupting output and employment.
- What is Homo Sapiens going to DO with itself? Rates of Exploring Local-vs-Aggregate Options ... and the Fate of Nations. (Roger Erickson, Open Operations Forum) Roger Erickson is a Global Economic Intersection contributor. See his latest (yesterday) in GEI Opinion: Democracy Defined in Statistical Concord.
- Euro Displays Uncommon Strength (Barry Ritholtz, The Big Picture) Graphics from The Wall Street Journal.
- Australia 'to be an energy superpower’ by mid 2017 (Ambrose Evans-Pritchard, The Telegraph) The U.S. will be far outstripped because of deficient infrastructure.
- Does QE cause Deflation? (Noah Smith, Noahpinion) Very good assemblage of discussion comments within the article. See also GEI Analysis by Lee Adler today: ZIRP and QE are Deflationary.
- Another easily solved problem: our massive government liabilities (Fabius Maximus) Fabius Maximus contributes to Global Economic Intersection. The author says future cost liabilities are easily resolved without cutting spending now. One example is launching a program that brings U.S. health care costs in line with other wealthy countries.
- Here's What 14 Top Wall Street Strategists Are Saying About The Stock Market In 2014 (Steven Perlberg, Business Insider) The net: Average prediction 1949 and median 1950 (up 10%); lowest 1850 (+4%) and highest 2075 (+17%). Read the article to get each analyst's reasoning.
- Claiming Social Security at 70 Can Cost You: T. Rowe Study (Gil Weinreich, ThinkAdvisor)
- Oh my, Paul Krugman edition (Steve Keen, Business Spectator) Steve Keen contributes to Global Economic Intersection, most recently yesterday in GEI Analysis: When Economic Theory Fails the Math Exam. In the "Oh my" article today Keen points out that the GDP gap is bigger than most recognize, at about 12%.
Figure 3. Change in Private debt as percentage of GDP and real GDP growth since 1990.