When Real Interest Rates Are Lower Than Growth Rates Help Reduce Public Debt

After the end of World War II, short-term interest rates in the US were less than 1%, while T-Bond bonds with 10-year maturity yielded about 2% (https://www.govinfo.gov/content/pkg/ERP-2012/pdf/ERP-2012-table73.pdf) with the US Federal Reserve, the Fed directly purchases Federal Government bonds from the US Treasury Department. At that time (1946) the US national debt reached 119% of …

Commodity Prices Have Exceeded Pre-Pandemic Covid-19 Levels

All commodity prices are now above pre-Covid-19 levels. This is mainly due to pre-pandemic oversupply demand, further declining industrial productivity, supply chain problems, rising shipping costs and incessant demand from China. In the chart below we see the prices on a quarterly basis for WTI Crude Oil, corn, and Lean hogs with the sample starting …

Eight Consecutive Months of Profits for the Stock Exchanges of the Planet

Corrections ended in European markets after the end of the summer, due to restrictions on investor expectations from the news of inflation in the Eurozone, which broke a record of a decade (please read the analysis entitled «ECB – Inflation Brings Changes to Monetary Policy»). However, despite any corrective moves, the main European stock indices …

ECB – Inflation Brings Changes to Monetary Policy

The ten-year record for euro area inflation – 3% in August from 2.2% in July and structural inflation (excluding energy and food) rose 1.6%, the highest since 2012 – is now key area of ​​controversy and strong arguments for proponents of restrictive monetary policy. Their arguments are reinforced by the recently announced inflation in Germany …

The Ingredients for Economic Prosperity: Energy & Growth

One of the most important costs for the operation of a business and the entire market is the cost of energy, which together with other factors e.g., such as labor costs, etc., largely shape the final prices of the product and service produced respectively. The increased energy costs today, the global trend is to increase …

Why China Has a Difficulty Getting Rid of Coal

2020 was a milestone in increasing energy production in China. China has commissioned new lignite plants that produce a total of about 38.4GW of electricity. China is the country that builds factories to increase the use of lignite for electricity generation while at the same time as a country invests most of the capital in …

Teleworking and Cyber Security Gaps in Business

A large percentage of CEOs believe that their current cybersecurity budget should increase to 40% of their total annual business budget. Recent global research of the EY Global Information Security Survey 2021 (https://www.ey.com/en_gl/ cybersecurity/cybersecurity-how-do-you-rise-above-the-waves-of-a-perfect-storm by Kris Lovejoy) showed that the forced shift of companies to teleworking in order not to reduce or interrupt their productivity …

Evergrande Group: Will Destroy China?

Evergrande Real Estate Group or Evergrande Group, a real estate giant with 200,000 employees and 3.8m jobs indirectly dependent on its operations and with debts more than $300 billion, forced Fitch to downgrade the company to the CC investment grade it shows high probability default. Moody’s did the same the day before. The company is …

Why Demand for Investment in European Bonds Is Growing

The fact that the ECB, through its programmes of the type of quantum easing (QE) and Pandemic Emergency Purchases Program (PEPP) respectively, provides the market with money, making it the main buyer of European government bonds, forces investors to create an informal queue to buy the remaining and smaller volume of European bonds offerings left …

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