Archive: Econtrarian

October 10, 2018 | Econtrarian

The Flattening Yield Curve – Is It Different This Time?

Back in mid-December 2016, the Fed started raising the federal funds rate by 0.25 of a percentage point per quarter. So, the federal funds rate has risen a cumulative 1.50 percentage points since then. When the Fed began these quarterly federal funds hikes back in mid-December 2016, the difference, or spread, between the yield on […]

July 30, 2018 | Econtrarian

One Simple Policy to Simultaneously Strengthen Your Currency and Weaken Your Exports

If a policymaker wanted to simultaneously strengthen the foreign exchange value of a country’s currency and weaken the country’s exports, that policymaker would be advised to impose tariffs on the country’s imports. This is the policy prescription I gleaned from reading Dartmouth College Professor Douglas A. Irwin’s 30-page monograph, “Three Simple Principles of Trade Policy”. […]

May 25, 2018 | Econtrarian

Thin-Air Credit Growth Slowdown Augurs Poorly for 2018 Domestic Demand Growth

A majority of my readers have asked me to update the discussion about the behavior of thin-air credit or a variant thereof, namely the sum of commercial bank credit (loans and securities) and the monetary base (bank reserves at the Fed and currency). To paraphrase the motto of the former iconic Chicago department store, Marshall […]

April 30, 2018 | Econtrarian

As of this Past Fourth Quarter, the S&P 500 Remained Relatively Cheap

Now that the first quarter of 2018 has ended, what could be more fitting than to look back at the relative valuation of the S&P 500 stock index as of last year’s fourth quarter? After all, isn’t that what we economists do best, look back? This commentary is an update to my November 29, 2017 […]

April 04, 2018 | Econtrarian

March 2018 Econtrarian Commentary

With the recent U.S. congressional passing and presidential signing of the Tax Cuts and Jobs Act of 2017 and the Bipartisan Budget Act of 2018, the federal budget deficit is projected to increase in the next few years. According to projections by the nonpartisan Committee for a Responsible Federal Budget, the U.S. federal budget will […]