The National Bureau of Economic Research signifies June 2009 as the end of the Great Recession. This indicates that the United States’ economy has been on the mend for nearly three years. While this assessment is factually correct due to the stimulus and monetary easing efforts which have driven GDP growth, the question arises: what kind of recovery are we truly experiencing?
According to the recent CNBC All-American Survey, 36 percent of Americans believe that the economy will improve in the coming year. This reflects a 9 percent increase compared to the November 2011 survey results. However, despite this increase, it also means that 64 percent of Americans remain skeptical about any economic improvement in the next year.
It’s evident that the population has recognized significant issues within the economy. Across the country, many are coming to terms with the reality that an economy cannot perpetually rely on borrowing and spending to thrive. Ultimately, debts must be settled through either default or inflation.
This week, we shared insights regarding the challenging situation Japan currently faces. With a staggering debt-to-GDP ratio of 200 percent, its first annual trade deficit in over three decades, and a probable reliance on debt monetization to bridge the budget gap, the outlook remains dire. Continue reading
Just this past Sunday in Long Beach, California, an unprecedented event occurred—it rained for two consecutive weekends. Residents can attest that this is quite unusual.
No complaints here. The unexpected rain revealed a hole in the sole of our shoe. The point is, such seemingly impossible occurrences happen more often than one might think.
For instance, last August, the world witnessed a bizarre situation—during the summer twilight, both mass inflation and deflation were anticipated simultaneously. This became evident when gold peaked at $1,820 per ounce while 10-Year Treasury yields fell to 1.98 percent. Had we not observed this extreme and illogical price divergence, we would have deemed it impossible. Yet, it transpired.
The events of last summer taught us a crucial lesson about the ramifications of the Federal Reserve’s decision to inject vast amounts of money into existence to purchase government debt. Initially, gold prices surged while bond yields plummeted. However, the eventual outcome of these controversial monetary strategies remains uncertain. Continue reading
Iran Declares “Gold Is Money”
By Louis James, Casey Research
Economic turmoil often indicates that the existing system is faltering and requires reevaluation. When it comes to monetary frameworks, questioning their pivotal principles can foster skepticism about the longevity of the chosen medium of exchange. The recent global economic tumult has prompted many to reconsider the role of gold and even explore its potential resurgence.
A month ago, a rumor surfaced that India might use gold to settle payments for oil purchases from sanctions-hit Iran, shaking up the markets. This was significant both in principle and scale, considering that India is one of Iran’s largest oil importers, responsible for around 22 percent of its total exports, valued at approximately US$12 billion annually. Following India are China at 13 percent and Japan at about 10 percent. All three nations are grappling with the challenges of importing Iranian oil due to sanctions linked to concerns over Iran’s nuclear agenda. Continue reading
Next month will mark a century since the Titanic tragically sank into the chilling waters of the North Atlantic. To honor this occasion, the April edition of National Geographic features a cover story about the iconic ship and its untimely fate.
Here at Economic Prism, we consistently seek metaphors that can elucidate the complexities of our world, particularly in the post-2008 dollar standard era of U.S. consumer capitalism. The Titanic’s demise serves as a rich source of allegories. As noted by National Geographic:
“Alongside human lives, the Titanic took down with it an illusion of order, a belief in technological advancement, and an optimistic outlook for the future, all soon overshadowed by the fears reminiscent of our modern times.”
James Cameron, the esteemed writer, director, and producer of the Titanic film, stated: “The Titanic disaster symbolized the bursting of a bubble. There existed such a profound sense of abundance in the early 20th century.” Continue reading
In conclusion, the intersections of economic challenges, historical events, and evolving monetary policies offer us valuable lessons. As we navigate complicated financial landscapes, it is essential to remain vigilant and critical of the systems we depend upon. Understanding past reflections can guide us toward a more stable future.
