In recent news, various important developments have occurred:
- Trump faces indictment on criminal charges in New York.
- Finland receives approval to join NATO.
- Eurozone inflation decreases markedly in March, although core inflation continues to rise.
- Is the Federal Reserve overreaching in its approach?
- China’s manufacturing activity expands at a slower pace in March.
- Consumer activity in China hits its highest level in over a decade this March.
- Bank borrowing from the Fed declines, signaling an easing banking crisis.
- US mortgage rates decrease for the third consecutive week.
- US Q4 GDP growth revised down slightly to +2.6%.
- US jobless claims continue to rise year-over-year:
Various reliable indicators have raised alarms about a potential recession in the US in recent months. However, the economy has shown a surprising resilience against these pessimistic forecasts.
A range of significant updates includes:
- The President of Taiwan’s US visit might incite a strong response from China, as noted by analysts.
- A Wall Street Journal reporter was arrested in Russia on spy charges.
- A GOP bill in the House aims to substantially increase US oil production.
- Following the collapse of SVB, small banks are losing deposits to larger institutions.
- Inflation in Spain drops to a 19-month low.
- AI begins to influence white-collar jobs.
- Research suggests that ChatGPT could assist in portfolio management.
- Pending home sales in the US rise for the third month in a row in February:
Despite numerous warning signs, the US economy is expected to see moderate growth in the upcoming “advance” GDP report for the first quarter, according to a set of nowcasts compiled by CapitalSpectator.com.
Key updates include:
- The President of Taiwan is visiting the US, which could provoke a reaction from China.
- The Fed’s Barr emphasizes the need for stronger banking regulations post-SVB collapse.
- BlackRock warns that expectations for Fed rate cuts this year might be misplaced.
- The US Consumer Confidence Index increases slightly in March, remaining in a stable range.
- In a significant milestone, US electricity generated from renewables surpasses that from coal for the first time.
- Amazon is reportedly considering acquiring the AMC movie theater chain.
- The US trade deficit in goods widened slightly in February.
- US home prices are continuing to decelerate in January, easing to a +2.5% annual pace:
The ongoing discussion about previously undervalued equities turning around is a common narrative, but these expected changes often face delays. For instance, projections stating that foreign, small-cap, and value stocks are on the verge of outperforming their broader US, large-cap, and growth counterparts are encountering new challenges this year.
* The collapse of SVB is viewed as a “textbook case of mismanagement,” according to a Fed official.
* Analysts suggest that recent banking turmoil is primarily due to a “sentiment contagion,” as noted.
* The US and Japan announced a trade agreement regarding electric vehicle battery minerals.
* The bond market continues to issue warnings about economic conditions.
* Semiconductor companies may face a choice between operations in the US and China.
* The wind-power sector anticipates robust growth this year following a slowdown in 2022.
* China is increasing emergency loans to nations facing financial difficulty.
* A report indicates that modest growth is resuming in Texas manufacturing, according to the Dallas Fed Manufacturing Index.
* Regional bank stocks have rallied, suggesting that the banking crisis may be stabilizing:
Last week saw almost all major asset classes report gains, based on a selection of proxy ETFs. However, real estate shares both in the US and globally were notable exceptions, as seen through trading data from Friday’s close (March 24).
Recent events in global affairs include:
- Israel is experiencing turmoil as mass protests erupt over plans for judicial reform.
- China’s managed economy continues to delay a potential ‘Lehman moment’.
- The Chinese central government is borrowing at the fastest pace ever.
- Concerns regarding US recession risk have escalated due to banking stress, as noted by the Fed’s Kashkari.
- US authorities are considering extending emergency lending measures for banks.
- First Citizens Bank has agreed to acquire assets from the failed Silicon Valley Bank.
- Analysts predict that copper prices are set for further increases this year, as reported.
- US business activity has demonstrated a strong rebound in March, marking the highest pace in a year:
Lawrence H. White
Summary via publisher (Cambridge U. Press)
The current rise in inflation rates for currencies such as the dollar, pound, and euro has reignited discussions surrounding alternative forms of currency, particularly gold and Bitcoin. Although Bitcoin has been widely discussed in the recent past, there is often a lack of understanding regarding how both it and gold could function as monetary standards. In “Better Money,” a pioneering economist explores and evaluates these standards, emphasizing their characteristics without exaggeration. White employs straightforward supply-and-demand analysis to explain how these standards operate, their comparative advantages, and their resilience to shocks, enabling informed comparisons. The book addresses common misconceptions about gold standards and Bitcoin, utilizing historical evidence to review the history of money, focusing on market versus governmental provision. Renowned for his insights on alternative monetary systems, White presents a measured discussion on which standard is likely to serve as the superior form of money.
