Monday 2 Dec 2024
From 9 days ago: America CAN'T Compete with China's NEW High-Speed Future! - Youtube.
From 1 month ago: Why Economists Hate Trump's Tariff Plan | WSJ - Youtube.
When there are more savers and investors than entrepreneurs, you have too much money creating stock market bubbles. The deterrents to running a business should be removed, such as big government, big business, and outdated education.
When interest rates are too low, inflation runs away, which can be seen on this chart of US total debt growth as an ever increasing rate of growth. It happened up to 1985, 1999, 2007 and 2020. They were followed by stock market falls: 1987 (small -23% Black Monday fall), 2000 (dotcom bubble), and 2008 (Great Recession). There was a -24% correction in 2022, but the recovery in the stock market suggests that inflation is not yet under control.
If debt growth resulted in real economic growth it would not be inflationary. This requires (1) another industrial revolution with (2) participation by whole population. If there is any real growth it is marginal, due to low participation. Some people are wealthier than past generations, whilst others are poorer. On average the standard of living has increased little.
US consumers are impacted by (1) inflation, represented here by the annual increase in total debt (blue), and by (2) higher interest rates shown as the cost of interest on all debt (red). If interest rates (red) are too low, then inflation (blue) dominates. The lack of control over past inflation has resulted in the amounts increasing over time. Once debt (blue) is allowed to rise out of control, it does not decline (blue below zero for a long time).
Sunday 1 Dec 2024
Trump threatens a 100% tariff on BRICS countries if they abandon U.S. dollar - NBC News. If two parties trade through a third currency, they have to pay an additonal foreign exchange fee. It does not make sense. In 2021 US trade was only 11.5% of world trade (Wikipedia).
Saturday 30 Nov 2024
"According to a preliminary decision posted on the U.S. Commerce Department's website on Friday, the agency calculated dumping duties of between 21.31% and 271.2%, depending on the company, on solar cells from Cambodia, Malaysia, Thailand and Vietnam" - X was Twitter). The price of solar panels varies enormously. I looks like the US price starts at $0.5 per Watt, and goes beyond $1 per Watt. Outside the US it is advertised as low as $0.15/W. Americans are already paying a lot more.
Three beekeepers turned this job down! - Youtube.
Did France make a mistake in how Notre Dame has been restored? DW News - Youtube.
Friday 29 Nov 2024
Cutting US federal government spending will be a battle: 21% social security, 18% national defense, 15% health, 14% net interest, 13% medicare, 8% income security, 5% veterans, 4% education, 2% transporation, and 1% agriculture (Treasury). Items less than 1% won't make a difference. Spending in October was +24% higher than a year ago.
Federal spending has increased 8.4% per year since 2019. That is the present trajectory. Government spending usually goes up with rising costs. If that is the inflation rate experienced by government, then interest rates are too low.
Federal government spending per household (red) equals the average annual wage (blue). Households directly or indirectly (included in the price of goods) pay for all government spending. This means in a two income household, the income of one person is needed just to pay for the government.
Thursday 28 Nov 2024
"US stocks currently account for 73% of the MSCI World Index, the highest single-country weighting ever recorded in its history" - X was Twitter.
"Per the @FT: "Christine Lagarde has urged Europe’s political leaders to co-operate with Donald Trump over tariffs and buy more products made in the US, warning that an acrimonious trade war risks wiping out global economic growth." - X was Twitter.
US imports from the Euro Area (blue) is much higher than exports (red). The main reason could capital flow from the Euro Area due to the unattractive return in the Euro Area. For Europeans to buy more US goods won't do a thing.
Australia approves law banning social media for under 16s - Techcrunch. "The ban is expected to take affect in November 2025, per Reuters. At that point social media platforms in the market will need to be able to demonstrate they’re taking “reasonable steps” to ensure age verification is in place to stop minors accessing their services. Otherwise they could face fines of up to around $32 million". This why a constitution is required to protect minority groups from the majority. Australia's Constitution: "The Constitution has no Bill of Rights, such as that found in the United States Constitution, which prevents a legislature from passing laws that infringe basic human rights, such as freedom of speech".
The border between Mexico and Guatemala is 871km long, which is much shorter than the 3145km long US-Mexico border, but includes three rivers, which is difficult to control. "In 2014, Mexico's border with Guatemala and Belize had 11 formal crossings (10 with Guatemala and 1 with Belize) and more than 370 informal crossings", " Instead of building a wall and preventing people from crossing the border, Mexico relies on interior enforcement via layers of checkpoints" - Wikipedia.
US goods exports to Mexico (red) is 64% of imports (blue). There is probably an interdependence. Mexico uses the income and foreign exchange to buy from the US. If imports from Mexico decline, exports will likely too. Import duties like any other tax is inflationary, because the government takes money out of the economy, and hands it out as benefit without production, thus lowering economic output.
U.S. Imports of Goods from Mexico is 15.4% of all Imports of Goods:
Wednesday 27 Nov 2024
"Two unnamed Nissan executives said the company has "12 to 14 months to survive," per Motor1" - X was Twitter.
"Ford is sitting with 400,000 cars on dealer lots" - X was Twitter.
The 15 to 64 year employment rate for the UK at 74.8% (red), Poland at 72.4% (purple), France at 69.2% (turquoise), Greece 63.9% (green) and Italy at 62.07% (blue):
Tuesday 26 Nov 2024
"Donald Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada" - X was Twitter. He will have to pull out of the USMCA (United States Mexico Canada Agreement) which he himself introduced as president 1 July 2020. Generally governments are not allowed to prevent people leaving the country. It is up to the destination country to limit entry.
Japan's 15 to 64 year employment rate at 79.6% (green) beats Germany at 77.4% (red) and the US at 71.7% (blue):
Monday 25 Nov 2024
Looking at US economic output or gross domestic product (blue) and total debt (red), in how much trouble is the US really? As Dr Johnny Fever said in WKRP on Cincinnati: "Give it to me straight doctor, I can take it". Increasing the debt increases money supply which appears to do wondrous things for the economy, but mostly just creates inflation.
The ratio of debt to GDP (blue) was flat from 1960 to about 1980 when interest rates rose, and after 2008 when interest rates reached a bottom. Every extra dollar of debt has resulted in a proportionate increase in economic output, which seems good on the face of it. If it only created inflation then the physical output of the economy has not actually increased, and real debt remained the same. The velocity of money flow stayed the same. The same products could be traded at the same rate, only at a higher price. It would be the most logical reason why GDP en debt stay together.
In between, from 1980 and 2008 there was a massive unproductive increase in debt, as interest rates came down. Before 1980 the ratio was near 1.5x, and now it is near 3.5x. It has resulted in a wealth gap between the owners of assets and the rest. Obviously the ratio can only come down if economic output grows faster than debt (money supply), which would be real economic growth (not the type reported by government statisticians), like a more efficient factory that manufactures more goods with the same capital. There is no clear sign of real economic growth, as a decline on this chart, except after the big jump in debt in 2009 and 2020.
Japan's government debt to GDP (red) and total debt to GDP (green) are still rising. They can no longer afford high interest rate. Bond holders lose the value of their money compared to the actual inflation rate. The same thing happens in all countries with big debt.
US total debt to total wages is at 2.8x compared to around 0.65x before 1982. Workers have to generate the economic output to pay back the debt. Their share of GDP has declined, but most taxes are passed on as higher prices, and paid by the low income group.
What Is a Debt Trap? - Experian: "A debt trap can occur when you are forced to take out new loans to repay your existing debt obligations, creating a cycle of compounding debt".
The annual increase in US government debt (blue) exceeds the interest payment on that debt (red). The US government is in a debt trap. It should go for debt counselling. Since 2008 the debt increase far exceeded the interest payments.
Friday 22 Nov 2024
Rivian CEO On Dealer Laws: 'As Close As You Can Get To Corruption' - InsideEVs. "RJ Scaringe says that dealers essentially paid for laws that protect their business".
"JUST IN - Judge delays Trump's hush money case indefinitely" - X was Twitter.
Global semiconductor sales increased 3.1x since 2004 (SIA), but relative to US total debt as nominal inflation it is only up 1.2x or 0.8% per year. People are deceived by inflation.
"Windows 11's latest update stumbles: Users face installation hurdles and post-update glitches." - X was Twitter. How does a software company upgrade to a product with more problems? An upgrade is supposed to be an improvement.
Thursday 21 Nov 2024
"The world refined #copper market was in a surplus of 359,000 tonnes in Jan-Sep, based on Chinese apparent usage (excluding changes in bonded/unreported stocks), ICSG says. Adjusted for estimated changes in Chinese bonded stocks, the surplus grows to 402,000 tonnes." - X was Twitter. Other metals already point to a weaker world economy.
"JUST IN - Brazilian authorities have indicted Jair Bolsonaro over alleged knowledge of a coup plot to kill his leftist successor, Lula da Silva" - X was Twitter.
Some-one should have testified to the US senate UFO subcommittee made up like an alien.
"JUST IN - ICC issues arrest warrants for Israel's Netanyahu and Gallant" - X was Twitter. "There are 124 member countries, but dozens of governments are not ICC parties, including China, India, Israel, Russia, and the United States" - Council of Foreign Affairs. South Africa refused to arrest Sudanese President Omar al-Bashir in 2015, as if an ex-terrorist organization such as the ANC has any respect for the law or human rights. (ISS).
India's population has grown to 1.43B, up 3.2x since 1960 (blue). Economic output in US$ relative to US total debt as nominal inflation rate (red) increased since 2000, but is stil down relative to the period before 1980. Output per capita is far worse.
India's debt in US$ (red) has shot up since 2011. Economic output in US$ (red) has increased with the debt, but not proportionally. The ratio of economic output to debt is declining, because it is unproductive debt. It contributes to economic output once.
Wednesday 20 Nov 2024
"Milton Friedman was the best" - Elon Musk, X was Twitter.
"JUST IN - United States vetoed a UNSC resolution for a ceasefire in Gaza, which received 14 votes in favor and one against" - X was Twitter. Countries ruled by dictators should not be allowed to vote at the UN. The vote cast represents the opinion of one dictator, and not the population.
US import duties would only affect categories of Personal Consumption Expenditure which can be imported (Major Type of Product). The imports of goods (red) compared to goods and services (blue):
The ratio of US imports to Personal Consumption Expenditure (PCE) on goods appears to be 55% (below), but not al imports are part of PCE.
.... Walmart says: "... two-thirds of merchandise sold in Walmart U.S. and 93% of merchandise sold in Walmart Mexico .... are made, grown or assembled domestically" - Walmart.
Tuesday 19 Nov 2024
"BREAKING: DOJ antitrust officials have decided to ask a judge to force Google, $GOOGL, to sell off its Chrome browser" - X was Twitter.
Monday 18 Nov 2024
"A global decline in wine consumption is creating problems for vineyards: there are too many grapes, and there’s too much wine," per Axios - X was Twitter.
The big companies with big profit margins have limited competition: Most Profitable Companies in the World for Nov 2024 - Finance Charts.
Why are US medicine so expensive? One breakdown of medicine pricing from June 2017: Production cost 17%, other manufacturing costs 41%, wholesale 2%, pharmacies 18%, PBM 7%, insurers 22% – The Flow of Money Through the Pharmaceutical Distribution System - USC Schaeffer.
....The revenue of pharmaceutical companies like Merck $60B, Pfizer R59B, AstraZeneca $46B is similar to all health coverage insurers like United Health $94B, CVS Health $89B, The Cigna Group $49B. People are paying a lot for extra admin. When patients do not pay for medicine directly, but just claim from insurance there is less pressure on pricing. Members like to get benefits comparable to the cost of insurance. They do not try to save on medical expenses.
....From 3 June 2024: International Prescription Drug Price Comparisons: Estimates Using 2022 Data - NIH. "... prices in other countries were 36 percent—or a little more than one-third—of those in the United States".
.... From 17 Jan 2024: Six Reasons Drug Prices Are So High in the U.S - New York Times.
.... US drug sales make up 56% of the top 10 pharmaceutical markets together: US Pharmaceutical Pricing: An Overview - Axene Health Partners.
Sunday 17 Nov 2024
"There has been a nearly unprecedented rush into stocks since the U.S. presidential election" - X was Twitter. For every buyer there is a seller withdrawing from the stock market. Money can only flow into the stock market if new shares are issued.
Trump, Musk and new cabinet nominees celebrate at UFC - BBC. Why don't they go to the ballet?
Saturday 16 Nov 2024
Donald Trump and Megan Mullally singing the "Green Acres" theme song at the 2005 Emmy Awards - Youtube.
100 Year Old Self-Playing Violin - "The Eighth Wonder Of the World" - Youtube.
Friday 15 Nov 2024
"A recent clinical study shows that collagen supplementation can significantly improve skin health" - X was Twitter.
During his first presidential term Trump demanded that China buy more from the US. The gap has narrowed. From Jan 2017 to Jan 2021, US exports of goods to China (blue) improved slightly in the first year, then dropped, before recovering during the last year of his term, due to the money created during Covid isolation. US imports of goods from China (red) improved during his first two year, then fell sharply towards a 2020 recession, before recovering.
The European Union (EU) has been a disaster in terms of creating more bureaucracy, growing government debt with uncontrolled spending (cepr.org), and lack of border controls.
Greece joined the EU in Jan 1981 when government debt to GDP was 23%. Government debt to GDP was 169% in 2023 (blue). The apparent interest on the debt rose to 5.5% of GDP in 2023 (red).
Thursday 14 Nov 2024
"I’m really struck by how big the presence from China is here at APEC" - X was Twitter. "Asia-Pacific Economic Cooperation (APEC) is an inter-governmental forum for 21 member economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific region" - Wikipedia. The US and China in a free trade forum. The conference is not far from the famous Lake Titicaca.
US student loan debt is $1.6 trillion. Crypto currency Bitcoin has a market cap of $1.8 trillion. Students should have bought Bitcoin. The computer science students could have created their own crypto currency scam.
"El Salvador is now sitting on Bitcoin $BTC profits of more than $140 million! Remember when the IMF warned them about the risks in 2023? 😂 😂 😂" - X was Twitter.
The Dogecoin that Elon Musk promoted has shot up to $0.4 from about $0.1 a few months ago. Elon Musk who heads the new Department of Government Efficiency (DOGE) is also Tesla CEO, a potential conflict of interests. Electric vehicles cost twice as much, and the higher cost must be recouped over years by the saving in fuel, which involves a lot of driving.
Japan's employed population (green) at 54% is surprisingly high for low population growth. It is not like they have a large retired population being supported by a small workforce. Fewer children would increase the percentage of workers. US employees (blue) was 30% of the population in 1962, and now 47%. Germany (red) went from 46% to 51%.
Wednesday 13 Nov 2024
Eva Longoria Reveals She Moved Her Family Out of “Dystopian” United States: “I’m Privileged” - The Hollywood. Property in Valencia, Spain must be cheap now.
"Department of Government Efficiency" - Donald Trump, X was Twitter.
"So … what would you say you do here? Department of Government Efficiency" - Elon Musk, X was Twitter. (1) Every citizen should get a monthly itemised bill of government expenses, so that they can see what each service costs them. Initially the bill will not be payable until a new party is created, because the present career politicians will not change the system. (2) Government should not be the sole provider for any service. Government services could be contracted out to two or more private suppliers operating in competition.
US customs duties did shoot up in 2018 from 1.3% to 2.8% of imports of goods and services during the reign of President Trump, but was still only 2.0% of imports of goods and services in Q3 (chart below). If president elect Trump wants to replace income tax with 76% duties on all imports, he will first have to deal with the World Tade Organization, all treaties the US has with other countries, and retaliation by other countries. Then importers will try to avoid the duties, source more expensive products without paying import duties, and people will still have to pay income tax.
Tuesday 12 Nov 2024
"LG's new display stretches from 12 to 18 inches" - X was Twitter.
If president elect Donald Trump follows through with his campaign promise of lower taxes, government debt will likely increase. US presidential candidate George H. W. Bush famously said: "Read my lips: no new taxes". During his term from 20 Jan 1989 to 20 Jan 1993 tax receipts (blue) increase 17% and government debt (red) increased 54%:
"Voters worldwide are FED UP with the elites. Every major incumbent party has been CRUSHED at the polls. This is a global revolt against the ruling elites." - X was Twitter.
When a population is young and ambitious the demand for credit could exceed the savings, and interest rates can be raises to control the supply and demand for credit. If an aging population wants to save more than borrow, you have a problem. Interest rates fall, causing asset appreciation, and young people without assets are impoverished. Most investments are held by the wealthiest 10%, who don't need to spend it. The demand for credit could be low because the poor majority have insufficient income for a home loan, and the dominance of big businesses limit the demand for credit by small businesses.
To avoid inflation, debt should grow the economy. Business debt is the best. Government debt is the worst. US nonfinancial corporate and business debt, as ratio of total debt peaked at 57% in 1974, and is now 35%.
Monday 11 Nov 2024
"Nvidia's total value, $3.65 trillion, is within a trillion dollars of the total value of Japan's Nikkei 225 Index, which itself is valued at $4.65tn. This is no small feat, as Japan is the second-largest stock market in the MSCI All Country World Index (ACWI)." - X was Twitter.
It takes about 20 years to see a change in the top 20 S&P 500 companies – Finhacker.cz. Top ten 20 years ago: Microsoft (now 2), Exxon Mobil (now 15), Pfizer, Citigroup, General Electric, Walmart (now 14), Intel, Cisco Systems, Johnson & Johnson (now 17), IBM.
.... People have been waiting for a better computer operating system (OS) for decades. Artificial Intelligence (AI) should be able to write an OS in the future. AI could make an end to big corporations by creating alternative services.
Japan's stock market in dollars (blue) outperformed US corporate equities (red) from 1971 to 2000. It took 32 years for Japan's stock market to return to the previous peak, ignoring the loss of dollar value.
The US corporate equity (red) is either an enormous bubble, or workers (blue) will become permanently impoverished. From 1951 to 1991 the two stayed together. What happened after 1991? The first stock market rise was the 2000 dotcom bubble. Then there was the stock market and housing bubble of 2008. The government failed to address the underlying problem in these bubbles, so now they have a third even bigger bubble.
Workers will be impoverished by a weaker dollar. We don't have an absolute reference for inflation. Other countries devalue their currencies faster than the US dollar, so they provide no reference. Relative to total US debt as a measure of the money in circulation and thus nominal inflation, wages (red) have declined from 38% in 1951 to 12.5% now, a decline of -1.5% per year. If the corporate equities to total debt (blue) was a horizontal line, it would mean corporate equities represent nominal inflation. The last 72 years it increased by 2.0x or 0.95% per year.
The decline in wages (red) is slow when corporate equities (blue) rise. Then the corporate equities fall, and wages decline faster. If this pattern repeats, corporate equities and wages could see another decline.
Sunday 10 Nov 2024
Exclusive: US ordered TSMC to halt shipments to China of chips used in AI applications - Reuters. Under what authority is the US ordering a business domiciled in Taiwan? This must be highly irritating to China, who sees Taiwan as a province. China is being pushed to take over the world's semiconductor manufacture.
"Housing prices in the EU rose by 48% on average in less than 10 years, creating difficulties for many Europeans" - X was Twitter.
"Any Republican Senator seeking the coveted LEADERSHIP position in the United States Senate must agree to Recess Appointments (in the Senate!), without which we will not be able to get people confirmed in a timely manner. Sometimes the votes can take two years, or more. This is what they did four years ago, and we cannot let it happen again. We need positions filled IMMEDIATELY! Additionally, no Judges should be approved during this period of time because the Democrats are looking to ram through their Judges as the Republicans fight over Leadership. THIS IS NOT ACCEPTABLE. THANK YOU!" - X was Twitter.
Saturday 9 Nov 2024
Semiconductors market cap weightings - X was Twitter.
Record Number of EVs Sold in September - Rhomotion.
The price of lithium carbonate shot up to CNY 600,000 per ton in 2022, and then tanked to level off at CNY 71,500 now (Trading Economics).
RNA therapy an effective alternative to lifelong, painful eye injections - New Atlas.
Friday 8 Nov 2024
Speech-captioning glasses show deaf wearers what other people are saying - New Atlas.
Full List of Celebrities Moving Abroad After Donald Trump's Win - Newsweek.
Microsoft added AI to software it has barely touched since 1985. The results are astonishing - CNN. "The latest Windows (11) update will give Paint new features like generative fill, a tool that will enable users to add AI-generated graphics to their artwork by typing what they want to see"
The long delay between the election of the US president, and him taking over, leaves the encumbent time to wreak havoc. 7 Major Events That Happened During Lame Duck Sessions - History. Grounding the Lame Duck: The President, the Final Three Months, and Emergency Powers - The Georgetown Law Journal: "Sometime after the sitting President loses the election and as the President elect prepares to take power, the Department of Justice, under the outgoing President, launches a criminal probe of the incoming President". Biden did a preemptive strike.
The US stock market is at an appropriate level for the present profit and growth, but as we know from history nothing lasts forever. The way the stock market keeps climbing gives the impression of excess savings that has to be invested somewhere. Unless new shares are issued, money can only enter the stock market if existing shareholders sell. If existing shareholders don't want to sell due to the upward momentum, it can lead to bubbles. There is also nothing preventing stocks from opening down -50% tomorrow. Unlike the housing market, where construction costs set a lower limit, company valuations are mainly determined by profits. They do have a book value, which theoretically is the shareholder equity value (assets – liability), but when companies go broke, they usually end up worthless.
The wealthiest 10% holds 87% of corporate equities and mutual fund shares (blue), whilst the bottom 50% holds 1% (red).
France's economic output to money in circulation as nominal inflation rate (blue) has declined -58% since 1985, as interest rates (green) came down. The Euro money in circulation is for the whole Euro zone. Lower interest rates lead to higher assets prices, creating wealth without production. People without assets are impoverished.
Thursday 7 Nov 2024
"California is ready to fight. I just called an emergency special session to help bolster our legal resources and protect our state against any unlawful actions by the incoming Trump Administration." - X was Twitter.
Television and main stream media appear to be full of liberals. The one good thing about Trump winning is that it shuts up these people. It is shame Kamala Harris conceded so easily. A riot would have been more entertaining.
The main reason for the Great Depression could be the multiplier effect going into reverse, rather than product prices declining. When asset prices rise, sellers make more money, banks receive more deposits, which they lend out to increase debt. When asset prices fall, you can have a chain of debt defaults, like dominos falling.
Household owners' equity in real estate (blue) is far from negative. It is about half of the estimated value of all housing (red).
The neverending inflation consumers have to deal with raises the question: Can you have zero inflation? In a cash economy without any debt, if the government doesn't print money, inflation should in principle be zero. In most of these underdeveloped countries the government prints money rather than collect taxes, which is why they have high inflation, and weak currencies. An economy in which people save for the future, and borrow from the future to enjoy the money now, savings and (unproductive) debt need to remain at a constant level for inflation to be zero. Inflation and interest rates tend to move together. If inflation is zero, then depositors would get close to zero interest.
.... It so happens that US just had a period with the Federal Funds Effective Rate (blue) at zero from Dec 2008 to Nov 2015. Total US debt (red) grew between -1% and 4% per year, the nominal inflation rate. During this period the government printed money in the form of Federal Reserve Bank loans (QE) which added 7% to total debt (green).
FRED has a chart of UK M4 money supply from 1881 to 2017. There was period up to 1913 were nominal inflation stayed between 0 and 5% per year. Since then inflation has run amok.
Wednesday 6 Nov 2024
Microchip 3QCY24: The CEO's quote sums it up. ''This down cycle we're in has been the most prolonged and challenging down cycle, I can recall during my 43 years in the industry.'' - X was Twitter.
"This is fascinating. Any hot takes on why Gen X decided the election?'' - X was Twitter. This might be the Republican Party's last opportunity to change the direction of the country. Younger voters mostly support the Democratic Party. Last train to Clarksville (The Monkees).
"Last-minute surge in people googling “Who is Trump” and “Who is Kamala” today. Undecided voters who have been living in a cave for the last decade." - X was Twitter. Government should be so small that it is irrelevant. US federal government receipts was 3.0% of economic output in 1900 (Tax Foundation). US government spending was 11.4% of GDP in 1924 (Trading Economics).
How expensive is the US stock market, being a combination of a high price/earning ratio, and higher profit margins after 2000. The ratio of corporate equities market value to US gross domestic product is now 2.95x, compared to around 0.5x at it lowest level. It is now 6x more expensive. A fall of -80% is required to return to the 1980 profit margins and valuations, when interest rates were at their highest.
The high profit margins is a sign of limited competition. Government has allowed businesses to growth until they dominated their sector. The high price/earnings is a result of low interest rates. Interest rates are low because of a low demand for credit. It could be due to an aging population, a shift of manufacturing to other countries, or bigger government.
From 1952 to 1973, 1985 to 1994, and 2009 to 2012 the price/earnings of the US corporate equities was around 13. The chart below shows profits x 13 (red) compared to market value (blue). In the lastest Q2 the price/earnings was 25.
The stock market is positive about a Trump presidency. If he implements the campaign promise, of replacing income tax with import tax, it will be disastrous for the economy. It is unlikely to happen. During his term in office, from the start of 2017 to the start of 2020, taxes (blue) did remain flat, whilst expenses (red) grew slowly. Then Covid isolation hit, and for the last year of his term taxes went up, whilst spending (red) almost doubled in one quarter. The next president Biden increased spending (red) and taxes (blue) further.
Tuesday 5 Nov 2024
Berkshire Hathaway (BRK.A, BRK.B) had cash of $32,287M on 30 Sep, which is 2.8% of total assets, compared to $25,573M a year ago. Investments in equity securities declined from $318,621M to $271,650M. Short-term investments in U.S. Treasury Bills increased from $126,401 to $288,031M. The investments in U.S. Treasury Bills now exceed equity securities.
Nintendo cuts its operating profit forecast as sales plunge - Nkkei. Toys have done badly for decades, perhaps because children are more interested in watching a screen.
Most of the time the estimated total value of US housing (blue) was worth much more than all corporate equities (red). Today corporate equities (red) is worth more than housing (blue). But does it make any sense (as Dr Falken said in Wargames 1983)?
If houses were rented out at the mortgage interest rate (blue) the income would have been much higher than corporate profits (red) until the Great Recession of 2009, and at present after it shot up in 2022. It usually takes a while for home rent to increase after interest rates have increased. If there were no fixed mortgage rates, like in some countries, home owners would be forced to increase the rent in order to cover the higher mortgage cost.
Now that interest rates have normalized, the stock market is expensive. If corporate profits are mostly made on wealthy customers, and home rentals are dependent on poor people then it makes sense.
Comparing the apparent monthly rent of pimary residence in US cities (blue) with the monthly mortage payment on a 100 % loan on the average house price (red).
Monday 4 Nov 2024
"In a study of more than 8,000 adults in China, researchers found that the DASH diet - originally developed to reduce high blood pressure - was the most effective at slowing biological aging" - X was Twitter.
Over 60 years, the estimated value of all US housing (blue) has performed similarly to corporate profits (red), which would be the value of the stock market at constant price/earnings ratio. The value of housing for the whole population, not the average house, is compared with all corporate profits. If the number of shareholders increase over time with population growth, the return of each shareholder is diluted one way or another.
There was a period between 1980 and 2005 when housing (blue) outperformed the stock market (red). Lower interest rates increased asset prices without increased economic production. Since then the stock market has done better. A number of technology monopolies developed after the 2000 dotcom bubble.
The comparison is complex: (1) A house can require constant maintenance, including damage done by tenants. It must be a low maintenance house. (2) House prices are usually much more stable than the stock market. A stock market investor is painfully aware of every change in value due to speculators pushing prices up and down, whilst a home owner lives in blissful ignorance. (3) In the US, the first $250,000 of profit on a primary residence is excluded from capital gains tax, or $500,000 for couples filing jointly. (4) A house can be bought with a small down payment, if the purchaser has enough income to qualify for a loan. Shares can also be leveraged with CFDs (Contract for Difference) outside the US, or single stock futures, or leveraged ETF (Exchange Traded Funds) which trade at multiples of the underlying asset, which are all extremely risky. (5) Real estate investment is highly dependent on location.
Sunday 3 Nov 2024
"Banks To Report All Transactions Over $600 to IRS Under Biden Plan" - X was Twitter. What happened to basic human rights, like the right to privacy. The same reason your house cannot be searched without a search warrant must apply to a bank account.
Saturday 2 Nov 2024
Animal tests show promise for restoring heart to more youthful condition, even after heart attack - Futurism.
For how long can the US be the biggest oil producer? With gold and other mining we have seen a frenzy of activity, until the easily extractable minerals are exhausted.
.... "The U.S. Energy Information Administration (EIA) estimates that in 2023, about 3.04 billion barrels (or about 8.32 million barrels per day) of crude oil were produced directly from tight-oil resources in the United States." - EIA. "Crude oil production in the United States, including condensate, averaged 12.9 million barrels per day (b/d) in 2023" - EIA. Thus most of the oil came from difficult to extract shale oil.
.... From 1 Oct: Shale project economics still reign supreme as cost of new oil production rises further - RystadEnergy: "Conversely, oil sands production breakevens average $57 per barrel, but can go as high as about $75."
.... From 9 Mar 2023: The average cost per barrel of oil produced by Exxon is questionable, unacceptable - Kaieteur News. "The Bank of Guyana 2021 Annual Report (page 21) confirms that the average price (P) for a barrel of oil is $40.00 in 2020; and the price increased in 2021 to an average of $70.48 per barrel (Table 1)".
Friday 1 Nov 2024
"The (S&P 500) blended revenue growth rate for the third quarter is 5.2% today" .... "The blended earnings growth rate for the third quarter is 5.1% today" - Factset.
"Trump announces he is considering raising taxes on imported goods to “400 percent”: “I don’t give a damn” " - Twitter. Big US companies like Apple and Amazon are dependent on cheap imports for their high profit margins.
.... "June 17, 1930 - Hoover signs the Smoot-Hawley tariff bill into law, decisively throwing the U.S. economy into the Great Depression." - Twitter.
.... chart of US tariff rates (1821 - 2016) - Wikipedia. In 1930 the tariff rates on total imports (blue) only went up to 20%.
Spain floods: Before and after images show devastation - BBC.
- The Guardian. "In Chiva, Valencia, over 400 litres of rainfall per sq metre fell in just eight hours".
Innovation is often initiated by military demand. The humanoid robots could be employed in the Ukraine war.
By "soft landing" in the US economy what people actually mean is that nominal inflation as indicated by total debt (red) continue to grow at what was 5.7% in Q2, and that nominal GDP approaches it for zero real economic economic growth relative to 2019, before Covid. Wages (green) are recovering as well. Seemingly a smooth recovery back to the 2019 economy. What could possibly go wrong? One problem is that government 10 year bonds (benchmark) pay interest of 3.72% whilst debt is growing at 5.7%. The money of the lenders are still being diluted by 2% per year.
Also government debt (red) has increased relative to GDP (blue), which postpones the problem for the future.
Thursday 31 Oct 2024
Trump’s former pick to join the Federal Reserve has proposed a radical solution to solve inflation - CNN. The fear of deflation started due the Great Depression when money supply shrank -30% from 1930 to 1933. It assumes that consumers are buying stuff they don't need now, but are just buying because the price is going up.
The cocoa price spiked in April, and has fallen back by September.
Australia's house prices (blue) are up 26x since 1976, which is 7.0% per year. It does more or less match average wage divided by the benchmark government bond interest rate (red), being proportional to the amount a worker can afford, expect for the 2011-2022 period when interest rates were very low.
Wednesday 30 Oct 2024
When will houses prices in the US (blue) rise again, and in all the other countries where it has shot up? The problem is finding the primary driver. Apparently it is not wages (green) because that has lagged. House prices have increased with the inverse of interest rates (red) since 1980, except higher interest rates (red down) have not stopped the increase in house prices (blue up). Apparently home owners do not want to sell at a loss, so prices do not go down much. Mortgage debt service payments as a percent of disposable personal income was only 6.0% in Q2. Mortgage debt is not a big factor.
Is this another self-perpertuating bubble? As existing home owners experience an increase in price, they can afford to pay more for their next house. Newcomers are outside the loop, the first time house buyers.
If a couple spends a third of their average wages on the mortgage interest (red) they can afford the average house price (blue). House prices could be a combination of the average wage and interest rates. Then house prices could have been much higher between 2007 to 2022.
Tuesday 29 Oct 2024
"Indian Home Affairs Minister Amit Shah authorized a wave of violence across Canada that included extortion and homicides, said a senior Canadian government official" - X was Twitter.
US presidents Obama, Trump and Biden imposed import duties on China solar panels, which has resulted in less than 1% now being imported from China. Manufacturing simply shifted to southeast Asia from where almost all the panels come (CSIS).
.... China and other countries are so much cheaper that the idea by politicians to manufacture in the US is just ridiculous: "In the late 1990s, the United States was the world’s leading producer of solar panels. However, the U.S. solar industry was overtaken by Japan’s, which was then surpassed by Germany’s, which was finally edged out by China in 2008. By that time, the average solar panel cost $4.40 per watt. Today, China dominates global solar manufacturing with over 80 percent market share, producing panels that cost as little as $0.10 per watt" (CSIS).
.... Meanwhile over 100 US solar installers went bankcrupt due to "higher interest rates, tighter financing, and adverse policy shifts in key states" - SolarInsure.
US personal consumption expenditure on food has declined from 20.2% of all expenditure in Jan 1959 to 7.4% in Aug this year.
The price of US gasoline (blue) has returned to the average wage (green) after being expensive. A fall can also mean a recession (grey band). Based on electricity tariffs (red) electric vehicles are cheap to charge relative to 1997.
Monday 28 Oct 2024
Hydrogen Stocks Crash as Hype Faces Reality Check - Oilprice.
"JUST IN - Washington Post owner Jeff Bezos has reportedly given the newspaper a mandate to add more conservative opinion writers at the paper — NY Post" - Disclose TV, X was Twitter. It might be too late to be conservative.
The US stock market is primarily driven by inflation, which has two components: wages (blue) and the increase in net worth (red). Based on the past, one could expect for the net worth increase (red) to stop momentarily, that is go to zero on the chart. The S&P 500 (green) matches the change in net worth (red) on this arbitary scale, except the stock market is now indicating a big increase in net worth. Interest rates will have to rise to stop the inflation.
Not only do workers have to pay for government debt, they are further being impoverished by the inflation caused by the increase in net worth. When will the poor peasants revolt against the wealthy landlords? Will it be before or after AI (Artificial Intelligence) take over their jobs? The net worth of the wealthiest 10% (blue) is now double the average wage (red) compared to what it was in 1992. If the poor invested in a house (green) the asset would have grown 1.3x wages since 1992, or 2x since 1975. It is worth owning a house with a mortgage to leverage the inflation.
Federal government total expenditure as a ratio of total wages. Looks like the US is becoming a socialist country. Government spending declined during the reign of Bill Clinton (Jan 1993 to Jan 2001) and Barack Obama (Jan 2009 to Jan 2017), both Democrats.
Saturday 26 Oct 2024
The Slimjet browser has started to crash on most website, but not all. "I suspect a new version of the very widely used Google Web Tools has rolled out to websites across the net, and there's something in the scripts that Slimjet doesn't like." - Slimjet Web Browser Online Forum. Google is too powerful, also the owner of Youtube. Yahoo! was the big search engine before Google. Time for a new search engine.
.... Slimjet released a new version to fix the crash after a Windows 11 update. The problem also existed in Windows 10.
"Trump says he would replace income tax with tariffs on Joe Rogan podcast" - X was Twitter. Tax receipts (red) is 76% of imports (blue). A 76% import duty on imports will make a lot of the imports unviable, and would increase prices for consumers. It does not matter who pays the taxes, the fundamental problem is when the government spends money, some people receive a benefit for which they do not have to work, which shrinks the economy. Taxpayers are also discouraged by not knowing what they pay for.
Friday 25 Oct 2024
S&P 500 earmings update - Factset: "The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the third quarter is 3.6% today". Together with S&P 500 maximum dividend + share buybacks yield of 3.4% at a p/e ratio of 29.7, the total return is 7.1%. The government 10y bond yield is 3.72%, but offers no growth.
"Waymo, Alphabet’s autonomous driving unit, raised $5.6 billion from investors, its largest-ever funding round." - X was Twitter. Apparently the best autonomous car, already driving passengers without a driver, and about to expand.
"Astronauts return to Earth after delay due to Boeing capsule snags" - X was Twitter.
"Airlines are using technology to crack down on people who cut the line" - X was Twitter. Get rid of the queues and delays.
"Australia’s central bank Governor Michele Bullock said it will take “another year or two” before inflation is sustainably back within the 2-3% target, in a signal policy is likely to remain restrictive for some time yet" - X was Twitter. She is talking bollocks.
.... Australia's M3 money supply (blue) grew 6.3% per year over the last ten years, and total debt (red) 6.0% per year up to 2022. The average house price in Sydney increased from A$962,965 in March 2014 to A$1,924,710 by June (Property Update), which is an increase of 7.2% per year.
Euro zone durable consumer goods (blue) have made a bubble, and looks set to fall into a recession. In the past it rose with M3 money supply (red), but M3 growth has already stopped.
US heavy weight truck sales (blue) fall long before a recession (grey bands). There is no decline in sales up to September. Rail freight carloads (red) declined permanently during recessions.
Thursday 24 Oct 2024
"Electric aircraft startup Lilium has run out of money" - X was Twitter.
"To beat EV tariffs, China looks to double production to staggering amounts" - X was Twitter. Limiting imports pushes up the currency of the import country, making their exports more expensive, and lowers the currency of the export country, making their exports even cheaper. To make imports more expensive, imports must be increased, not decreased.
The mortgage interest rate by itself is not useful information. The interest rate is high because inflation is high. Over the long term US house prices (red) should grow at a similar rate to interest rates (blue). House prices have jump already, so buyers need to wait for the next bubble.
The interest only cost of the average house with a new 100% loan was $2925 per month in Q2 (blue). The interest cost of federal government debt per working couple was $1629 per month in Q2. Before 2022 the mortgage cost (blue) was mostly lower than the present federal debt cost (red). In other words, with the interest people now have to pay on government debt, they could have bought a house with an interest only loan before 2022. Rent increases with inflation, but loan payments remain the same for the same interest rate.
Wednesday 23 Oct 2024
Texas sues US over noncitizen voting allegations - Reuters. "Texas's Republican Attorney General Ken Paxton sued Democratic U.S. President Joe Biden's administration on Tuesday, saying the federal government was not providing the help it needed in assessing the citizenship status of some of its registered voters".
Nvidia CEO Jensen Huang: AI “is going to be the largest of industrial revolutions we've ever seen.” - X was Twitter. He will also be replaced by Artificial Intelligence.
On social media there are short term charts showing how unusually high US federal government interest payments (blue) are compared to defense spending (red). They have coincided before around 1998.
The US Delinquency Rate on Single-Family Residential Mortgages at Commercial Banks shows no increase up to Q2. Mortgages held by commercial banks are a minority according to: "As of 2023, Fannie Mae and Freddie Mac support around 70 percent of the mortgage market" - Bankrate.
Total Mortgages Held by Fannie Mae (blue) compared to Households and Nonprofit Organizations; One-to-Four-Family Residential Mortgages:
Tuesday 22 Oct 2024
'Standard Chartered on August crude oil demand: We assess demand at an all-time high of 103.79 million barrels per day (mb/d), an upwards surprise of about 450 thousand barrels per day (kb/d) above our (pre-JODI data release) forecast. "August is the third successive month in which a new all-time demand high has been set" ' - X was Twitter. Probably backup power for green energy.
The crux of the economic problem in the US is total wages (blue) compared to federal government debt (red), because it is workers who will have to pay for it in the future. What happens to the economy? There are always two parties involved. The standard of living of workers will decline, whilst the lenders will have money returned. Spending will shift further from the workers to the wealthy. Lenders by nature are savers and not spenders, thus the economy declines.
In the case of Japan, government debt also climbed (red), and after the 1995 the economy (blue) stopped growing. Since 2012 government debt and the economy have declined.
Monday 21 Oct 2024
Rossi Now Claim Zero Point Energy Can Power an Electric Car - Next Big Future.
"Hollywood filmmaker Alcon Entertainment is suing Elon Musk, saying Tesla used imagery inspired by the 2017 movie “Blade Runner 2049” at a recent event even after permission was denied" - X was Twitter. The compensation will be based on the money lost by this Blade Runner because people who would rather watch the Tesla event = $0. Tesla should claim compensation for promoting Blade Runner.
New Diabetes Treatment Eliminates Need for Insulin in Most Patients - ExtremeTech.
UK economic output relative to US total debt as nominal inflation rate is 40.6% of 1971. Until 1992 the economic output remained more or less the same.
UK economic output relative to UK total debt as nominal inflation rate was 36.9% of 1987:
UK total debt (blue) exceeded M3 money supply (red) for a long time:
Saturday 20 Oct 2024
"The Most Reliable Car Brands, According to Consumer Reports" - X was Twitter. It does make sense for Chevrolet (General Motors) and Ford to be down on the list, but Volkswagen and Mercedes are even lower.
"U.S. Banks now facing $515 billion in unrealized losses" - X was Twitter. FRED discontinued the chart, so this must be bad:
Friday 18 Oct 2024
Gold (yellow) is pushed up by speculators, although the gold mining exchange traded fund GDX is not particularly high (Bigcharts) suggesting that mining costs are also rising, unless it is a switch to lower grade ore. The price of nickel (grey) and oil (brown) still heads towards a recession.
Thursday 17 Oct 2024
Wife of Tory councillor jailed for stirring racial hatred after Southport attack - The Guardian. "The post was later deleted but police established it was available for at least three and a half hours". Some-one with a time machine should go back and explain to the forefathers what a bad idea is for an island to colonize populations with explosive growth, and force them to learn your language.
US average annual wage (blue) compared to the average annual increase in wealth for the wealhiest 10% (red). In April the average wage was $53,694, and by Q2 the increase of wealth was $183,000 per person.
Wednesday 16 Oct 2024
How much can a rise in the stock market contribute to the inflation that results in higher economic output (GDP)? The Willshire 5000 index market cap increased by +$14,810B over the year to date. US GDP was $29,017B over the year to Q2. The stock market index is a capital value, and GDP an annual amount. To stop inflation, interest rates need to target the stock market.
Tuesday 15 Oct 2024
The US price of eggs (blue) have shot up again. It keeps going back above average wage (red). Bacon (green) has stayed with wages. Medical care (purple) and average house price (turquoise) have increased more than wages.
Monday 14 Oct 2024
The S&P 500 stock market index (blue) corresponds with the US current account deficit (red), which suggests foreign capital inflow contributed to the stock market rise. During recessions (grey bands) the current account shrinks.
The stock market is a capital value, and the current account deficit an annual amount. The current deficit was $266.8B in Q2, which is $1067B over a year. The WiIlshire 5000 market cap increased by +$14,810B over the year to date. If all the foreign inflow went into the stock market, it accounted for 7.2% of the rise.
That is despite US economic output (GDP) as fraction of world GDP having declined from 40% in 1960 to 26% in 2023:
Sunday 13 Oct 2024
"WATCH: SpaceX Starship launch tower successfully catches Super Heavy booster for the first time" - X was Twitter.
"What Hurricane Milton did to a Duke Energy solar farm in Florida" - X was Twitter.
Saturday 12 Oct 2024
"It is our understanding that these robots were not operating entirely autonomously," a Morgan Stanley report said. - X was Twitter. The human robots look more like a potential nightmare.
"Visualizing the Sugar Content of Popular U.S. Drinks" - X was Twitter.
Friday 11 Oct 2024
"Ranked: The Largest Producers of Wind Power, by Country" - X was Twitter. For all the coverage China's coal power station gets, they also have the most wind power by far. The 442GW of installed wind power at 20% utilization can deliver 774TWh of energy compared to 9220TWh electricity used in 2023.
"With less than 30 days until the election, the Biden-Harris Department of Justice is filing an unprecedented lawsuit against me and the Commonwealth of Virginia, for appropriately enforcing a 2006 law to remove noncitizens from the voter rolls" - X was Twitter. Politicians are only interested in winning elections. After elections there is no motivation to do anything.
"Net immigration had the LARGEST increase under Pres. Biden. The US took in over 10 MILLION immigrants and saw a significant increase in unauthorized immigration from 2021 to 2024" - X was Twitter.
Thursday 10 Oct 2024
Photos: Hurricane Milton brings devastation across Florida - NPR. Humans should have adapted their lifestyle to the climate, including structures that are hurricane resistant a few hundred years ago, instead of relying on support from public funds or insurance.
Wednesday 9 Oct 2024
"Socialists are really a strange species, they are so detached from reality that they repeat the same mistakes over and over again" - X was Twitter.
"Rio Tinto to buy Arcadium Lithium for $6.7bn" - X was Twitter. Isn't Rio Tinto already too big?
eBay announces ban on private sales of electric bicycles - Electrek. Roads are anyway unsafe for cycling, except for dedicated bicycle lanes.
US average wage relative to total US debt per capita as nominal inflation rate (blue) is 16.5% of what it was in 1964. How is it even possible for people to borrow so much, and not spend it, so as to cause inflation? The increased debt does create inflation once, but because it goes into unproductive assets, there is no further income or spending. The drawback is that the debt accumulates without a way to pay it back.
With interest rates declining people can afford to sit on more debt, resulting in lower money velocity, and low inflation. It is worth holding the debt, which is invested in asset, because asset prices increase as interest rates decline. It does require for the money to stay with the wealthiest 10%, and out of the hands of the other 90% who like to spend it.
Whatever the real decline in wages, the average debt per person is now a lot higher. Average wage is now $54,600 per year compared to total debt of $296,000 per person. In 1964 the wage was $4500 per year compared to total debt of $4024. Today it takes 6.1x longer just to pay back the debt principal. At a 5% interest rate, the cost is now 27% of the average wage, and at 10% interest it is 54% of the wage. The nation goes broke at high interest rates.
Even without inflation, wages probably would have declined due to lower labour cost in other countries. Japan's economic output relative to US total debt (red) and China's (green) give an indication of when manufacturing shifted to these countries.
All US household and nonprofit organizations debt, to all wages paid, is 2.0x higher than in 1964 (below). Workers also indirectly pay for the other debt – any cost or tax is passed onto until it reaches a party that cannot pass it on further, which are workers with no pricing power.
The velocity of US money flow (below) has declined from 0.773 in 1951 to 0.291 now. That means the average person took 1.3 years to spent their share of the money in circulation in 1951. Now it takes 3.4 years. That is extremely inefficient.
Argetina's apparent money velocity was 4.0x in 2017, which means money changed hands every quarter. When money loses value at a high rate, you want to spend it quickly.
Tuesday 8 Oct 2024
The Boring Company’s Vegas Loop is a comedy of trespassing errors - Engadget.
"JUST IN: Warren Buffett Indicator hit 197%, the highest level in history, surpassing the Dot-Com Bubble and the Global Financial Crisis." - X was Twitter.
"JUST IN: Hang Seng Index falls by 9.41%, its largest loss in 16 years and 2nd largest loss this century" - X was Twitter.
Six days ago: Hang Seng Index climbs 1,310 points, sixth consecutive days of gains - The Standard.
Monday 7 Oct 2024
The S&P 500 PE ratio is 30.02 on this magnificent chart: Longtermtrends. A -50% fall would bring it back to the long term average. The interest rate decline from 1980 to 2010 led to a higher PE ratio, because stocks were priced for "growth", which is basically inflation caused by asset appreciation. The present high valuation requires more inflation. Stock markets don't really need a reason to fall. Once it starts falling, shareholders pile out to prevent further losses.
The sectors with the highest valuations are Real Estate (39.4x) and Information Technology (38.0x), and the lowest Energy (12.7x): World PE ratio.
Repeating what appears to be a self-perpetuating bubble. US corporate profits (blue) is still climbing, and so is the net worth of the wealthiest 10% (green). Asset appreciation leads to more money in circulation, more corporate profits, which increases asset prices, etc. Increased wealth due to inflation does not involve production. Therefore workers have to pay for the wealth created through wages that do not keep up with inflation.
"Stock Comparison: Magnificent 7 vs. 2000s Tech Bubble" - X was Twitter.
"Kamala supporters filming running over a Trump sign get quite a surprise" - X was Twitter.
Not only is the US restricting imports, they are impeding exports: "Thank you for considering McMaster-Carr for your purchase. However, we will not accept orders from your facility due to the cost of complying with US export regulations."
Sunday 6 Oct 2024
"NASA released the clearest view of Mars ever" - Nature is Amazing, X was Twitter. These are the rocks with which houses will built on Mars.
What Is Dark Matter? - Extremetech.
Saturday 5 Oct 2024
"How rich people pay no taxes" - Seek Wiser, X was Twitter.
Friday 4 Oct 2024
"The EU agrees to impose tariffs of up to 45% on imports of electric vehicles from China" - OilPrice, X was Twitter. Governments keep repeating the same failed policies. Interest rates were lowered from 1980 to 2010 despite it repeatedly failing to create economic growth. Green energy has resulted in higher temperatures, so they push for more green energy. Same with import restrictions and subsidies.
The economic output (GDP) of France (blue) and the US (red) relative to US total debt as nominal inflation have a similar decline. France's figure could be more volatile due to the exchange rate. Economies were impacted by a shift of manufacturing to Japan and China, and the government response.
The economic output of Mexico (blue) and Argentina (red) have declined over 40 years relative to US total debt. Mexico at -0.69% per year, and Argentina at -2.3% per year. The population of Mexico is 131M and Argentina 46M. Argentina has had currency destruction, which must have made it more difficult to keep track of its gross domestic product.
Thursday 3 Oct 2024
The price/earnings of Walmart (WMT) is at 42 (Finance Charts). The market is expecting more "growth", which is basically inflation caused by more money creation. It has made higher peaks over the last 6 years, but was much lower before that.
The index of US oil and gas extraction (red) has shot up. Did it have a negative impact on other industries? The fraction of gross domestic product (GDP) of oil and gas extraction (blue) has declined since 2009:
Wednesday 2 Oct 2024
Relative to the 1990s, the iron ore price (red) has outperformed copper (orange), oil (brown), and US total debt per capita as nominal inflation rate (green). Copper and steel can be recycled, whilst oil is burnt up.
Tuesday 1 Oct 2024
From 27 Sep: American Households' Average Monthly Expenses: $6,440 - The Ascent. Average monthly expenses increased 5.9% over a year, which looks like a realistic figure for inflation based on money = debt growth. Average annual income after taxes increased 5.6%.
According to the charts below, the US Household Consumption Expenditures on Housing relative to total wages (blue) have not increased since 2009. Mortgage Debt Service Payments as a Percent of Disposable Personal Income (green) have declined. Personal current taxes have increased (red). People love inflation and taxation. This is why they keep voting for the same politicians.
US wage growth (blue) did not do too badly against money = debt per capita as nominal inflation (red) after interest rates reached rock bottom in 2009. It was the lowered interest rates the preceding decades that was the problem.
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