Screwing the American Economy by Screwing Its Young

Written by Steven Hansen The inordinate growth of student loans – and its effect on the economy – is killing consumption (autos) and the housing sector.  This is no short term dynamic, but will effect the economy for decades. [click on image to enlarge]

What Would It Take to Ignite Inflation?

Written by Gene Balas We see a few signs of budding inflation.  But will it bloom? Survey data point to businesses’ higher costs in recent months.  The key question is whether those cost increases are temporary or persistent, and whether they will be passed on to their customers in higher prices.  That, in turn, depends …

Who is Confused: Consumers or Consumer Observers?

Written by Gene Balas Most of the time, consumers of economic data look at broad indicators to determine a basic question: “is economy activity growing or contracting?” Based on the answer to this question, investors may alter their asset allocation or businesses may adjust their investments in the basic ingredients of capital and labor. Too …

Cliffs, Nightmares, and Hidden Consumer Taxes

Written by Steven Hansen While watching Chairman Bernanke weave and bob in front of Congress this past week, I started to ponder what he said: The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year. After rising at an annual rate of 2-1/2 …

Are Price Increases Killing Consumption?

Written by Steven Hansen Based on comments on my last post, that there are misconceptions about consumer spending patterns and the effects of price increases.  Consider several potential effects caused by price increases: A consumer can do without.  No vacation, no private school, no newspaper, or no medical insurance.