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Although the Recent Weakness in Bank Credit Growth May Not Be a Concern to Others, It Is to Me

Starting around this past December, growth in commercial bank credit (loans and securities) slowed precipitously. Annualized 13-week growth in bank credit of late is the slowest since the summer of 2013. Growth in bank credit excluding commercial and industrial (C&I) loans also has slowed precipitously since this past December. This weakening in bank credit growth […]

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Do You Want to Restore Manufacturing Employment? Smash the Robots!

There has been much public discussion about the demise of U.S. manufacturing jobs and policies to restore manufacturing employment. U.S. manufacturing employment relative to total U.S. nonfarm employment has been trending lower throughout almost the entire post-WWII era. Although foreign trade is being advanced by some as the reason for the secular decline in U.S. […]

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2017–Shades of 1937

As a result of some Fed actions taken in 1936 and 1937, the U.S. economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938. Based on the recent slowdown in thin-air credit growth, I believe that a significant slowdown in the growth […]

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If You Think the Pace of Economic Activity is Weak in 2016, Just Wait Until 2017

Based on published data so far for Q4:2016, the Atlanta Fed is forecasting real GDP annualized growth in this current quarter of 2.4%, down from the previous quarter’s 3.2% annualized growth. With current growth in thin-air credit already very weak and likely to get even weaker after the Fed contracts the monetary base more in […]

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Do Larger Federal Budget Deficits Stimulate Spending?

The U.S. equity markets have rallied in the wake of Donald Trump’s presidential election victory. A possible explanation for the post-election stock market rally is that U.S. economic growth will be stimulated by the almost certain business and personal tax-rate cuts that will occur in the next year, along with the somewhat less certain increase […]

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The Fed Began Tightening Policy in October and No One Knew It, Maybe Not Even the Fed

I believe that the Fed commenced a stealth tightening of monetary policy in October. But one possible difference between this current tightening and the tightenings of yesteryear is that it is not clear that even the Fed realizes that a tightening has occurred of late. Paul Kasriel Commentary November 2016

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The Imposition of Import Restrictions Is a Recipe for a Declining Standard of Living

Both 2016 U.S. presidential candidates of the two major political parties are, to greater and lesser degrees, advocating the imposition of restrictions on U.S. imports if foreign exporters engage in “unfair” trade practices. Regardless of whether foreign exporters engage in perceived unfair trade practices, I believe that the imposition of restrictions on U.S. imports would […]

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Who Are You Going to Believe…

…the Commerce Department, or the Institute for Supply Management, Autodata and the Bureau of Labor Statistics? With the Commerce Department’s advance estimate that second quarter real GDP annualized growth was a paltry 1.2%, the Fed certainly would not entertain raising its policy interest rates at its upcoming September 20-21 meeting, would it? Yes, it might. Here’s […]

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