Mish's Global Economic Trend Analysis |
- China's PPI Drops 44th Month, Chinese Trade Slumps on Waning Demand, Deflationary Pressures
- Merkel's Cream Puff "Tougher" Stance
- Reader Asks "Without a Job, Who Can Afford to Buy What Robots Make?"
China's PPI Drops 44th Month, Chinese Trade Slumps on Waning Demand, Deflationary Pressures Posted: 09 Nov 2015 08:37 PM PST China's PPI Drops 44th Month China's CPI is up a modest 1.3 percent year over year but Producer Prices Fall for 44th Month. China's CPI Slows Amid Deflationary Pressures The Wall Street Journal reports China's Inflation Slows in October. China's consumer inflation dipped further last month due to lower food prices, adding to what economists say are signs of slack demand and slowing in the world's second-largest economy.Trade Slumps on Waning Demand Chinese imports and exports hit the skids as Trade Slumps on Waning Demand China's trade with the rest of the world fell sharply in October from a year earlier, with imports of raw materials particularly hard hit as slowing Chinese investment feeds through into weaker demand in the world's biggest trader of goods.No Decoupling I have stated this several times before but it's worth noting again: The widely believed notion that China would decouple from the global markets in 2007 and 2008 was as silly then as the notion the US can do the same today. Mike "Mish" Shedlock |
Merkel's Cream Puff "Tougher" Stance Posted: 09 Nov 2015 02:40 PM PST The Financial Times reports Merkel Takes Less 'Welcome' Tone on Refugees as Pressure Builds. Refugees securing asylum in Germany should expect long delays before they can bring over their families, Chancellor Angela Merkel warned on Monday in a departure from the "welcome" policy critics have blamed for triggering a huge influx of migrants.Bring the Wife and Kids Somehow, "no change" is a tougher stance. But let's work this symbolic change to the end meaning: If you are going to come, bring the wife and kids in the first place. Mike "Mish" Shedlock |
Reader Asks "Without a Job, Who Can Afford to Buy What Robots Make?" Posted: 09 Nov 2015 04:43 AM PST In response to Robots Will Change World Beyond Recognition reader "DB" has a couple of questions:
Those are key questions that should be on everyone's mind. But recall there were two viewpoints written in my post. Bank of America paints one picture and McKinsey another.
Pater Tenebrarum at the Acting Man blog pinged me with his thoughts (similar to ideas I have expressed before). I'm convinced McKinsey is right, for the simple reason that this is precisely the history of economic progress: the more productive production processes have become due to automation, the more the division of labor has increased, and the more new jobs and industries have come into being, and the more incomes, leisure time and life expectancy have increased as well. Just watch this fascinating video and think about it for a moment: Would we be better off or worse off if this machine didn't exist?Emphasis his, video follows. Link if video does not play: WFL M60 MillTurn Complete Crankshaft Machining - MARTECH Machinery, NJ - USA One could have presented a thousand videos if not ten thousand videos asking the same question Pater posed: "Would we be better off or worse off if this machine didn't exist?" The problem is not technology. Rather, the problem is the Fed's response to technology. Reader Brad agrees. Brad writes ... Your conclusion was perfect: "Regardless of which viewpoint you think more likely, it should be perfectly clear that robots are a huge deflationary force."Central Bank Insistence on Inflation in a Deflationary World Central bank insistence, especially the Fed's insistence, on 2% inflation in a technologically deflationary world is precisely the driver of income inequality that the Fed and others complain about. The solution is not higher minimum wages, but rather deflation that let's people buy more with their money. It's not about how much one makes but how far it goes that matters. And the Fed is hell-bent on making sure the money you make goes less far each year. Fed policy benefits the banks, the government taxing bodies, and the already wealthy with first access to money. Will this eventually lead to a war between the have and have-nots? Actually, an economic war is already underway. How violent the war gets remains to be seen. Mike "Mish" Shedlock |
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