How and why are bubbles created in the financial system? Is it a random error in the path or a structural element of the circumvention of the rules of the functioning of the market? The capitalist economic system has an inherent tendency to develop instability that results in a severe economic crisis. The main mechanism …
Category: Developed Economies
analysis for Developed economies
The FED serves Wall Street (and capital gains taxes), not the Real Economy
Nobody likes tough macro events, especially during the holiday season, but some things need to be said, according to Trust Economics. As you know, US Federal Reserve Chairman Jerome Powell has promised that 2024 will be the year of interest rate cuts. In this regard, it should be pointed out that Powell is neither a …
The FED Won’t Help ‘Bidenomics’ – Interest Rates and the 2024 Elections
In recent years, Jerome Powell stood firm on the monetary principles he espoused: The Fed was prepared to do whatever it took until inflation returned to its 2% target. On Tuesday, December 12, 2023, Powell showed signs of a change in attitude. The reasons are obvious and it is certainly beyond any economic logic. At …
The ECB’s aggressive interest rate hike is causing problems for the EU
The ECB’s aggressive interest rate hike is causing problems for everyone in Europe. To citizens who are asked to pay a higher installment on their mortgage or consumer loan, to businesses that are raising the cost of servicing their loans, to states that see their existing bonds collapse, and even to public debt that, instead …
Why the EU’s Proposal to Impose a Cap Only on Russian Natural Gas is Wrong?
In the past two weeks the structural pathologies responsible for the EU’s energy gridlock have combined with a series of extreme weather events – such as unprecedented drought – to record unimaginable energy prices. The day-ahead electricity prices in France, the EU’s traditional electricity exporting power, reached on September 2 even above 1,000€/MWh, while natural …
Big Problems for the European Economy
The development of the war in Ukraine leaves no room for optimism for the European economy. It is clear that the longer the war lasts, the greater its economic impact. At the moment we have the terrible accuracy that comes from inflation, which in turn is due in large part to the energy crisis intensifying …
New Challenges for EU Member-Countries Economies
The war in Ukraine has entered a new phase and according to the estimates of the Americans, who have shown that they correctly record and interpret the movements of the Russians, it is going to be quite long. The Russian war machine proves to be inferior to its reputation. A month of hostilities has been …
Using Inflation as a Tool to Improve the Competitiveness of an Economy
An Εurozone/EU member-country’s economic policy can use inflation as an opportunity to achieve two goals: First, to increase the competitiveness of the economy and therefore its employment and growth rate. Second, to reduce the Public Debt-to-GDP ratio. Combining the above, with the imposed need to relieve as much as possible the citizens, especially the weaker …
Boosting Inflation in the EU is Accelerating the Implementation of New Fiscal and Monetary Policies
Both the ECB and especially the governments of the EU member states must deal with two serious issues after the further strengthening of inflation in the Eurozone. The pressure that is already being exerted and will continue to be exerted most strongly on the actual disposable income of households. In weakening the competitiveness of companies …
Eurozone Economy Returns to Strong Growth Trajectory but Still Has Obstacles to Overcome
The increased spending of European consumers by the increased liquidity that had accumulated due to the continuous economic shutdowns and lockdowns, gave a dynamic impetus to the field of retail, catering, and steadily increased factory production which has not yet reached pre-pandemic levels. As a result of these factors, Eurostat released data on Eurozone GDP, …