Every year, the Congressional Budget Office (CBO) adds to its short-term budget forecasts (10 years and 25 years) a long-term (75-year) outlook.The 2013 Long-term Budget Outlook was published earlier this week. The CBO, of course, admits that “the uncertainty of budget projections increases the farther the projections extend into the future.” Some would argue that …
Our “Crash Alert” flag warns of a crash in U.S. stocks. Readers are advised to proceed with caution. But since the start of September, the news for stocks has not been bad. If you want to buy stocks, the financial press and Wall Street can give you plenty of reasons to do so. There is …
The Federal Reserve has grown the monetary base from $827 billion to $3.1 trillion in five years. At the same time banks have stuck $2 trillion more than required in reserves at the Fed. This money lays around fallow, earning just 25 basis points from the central bank. A blossoming to its full potential would …
Government can control many things, but it can’t control our minds and, therefore, our economic decisions. This has been a major source of frustration for the last two presidents. In 2001, President Bush demanded that Americans immediately go out and spend, racking up more debt in the hopes of inspiring economic recovery. President Obama has …
In the ancient world, when people got themselves into debt, they were often forced to sell their daughters into prostitution and their sons into slavery. More about that in a minute… First, a quick look at the financial markets. Looks like gold might have put in a bottom. We figured it would be around $1,100 …
In the 15th century, the highest standard of living in the world belonged to China. Places like Nanjing had reached the pinnacle of civilization with incredibly modern infrastructure, robust economies, substantial international trade, great health care, and a rising middle class. Across the globe, Europeans were living out short, mud-filled, brutish lives in squalid poverty, …
I am often asked, “How can anyone not see the problems of growing debt in the U.S.? Why can’t we get a consensus to change?” Part of the problem is that too many in power just don’t see the impending crisis that you and I see, or at least they don’t see the need to …
In 1894, a scraggly band of misfits made their way from Ohio to Washington, D.C. They had a plan to present to the political class, one that they said would bring an end to the economic depression that had been sparked by the Panic of 1893 and guarantee a future of endless prosperity for all. …
Memories are short, and 2008 is ancient history. Consumers can’t suppress their urge to consume. Lenders can’t suppress their urge to lend. We’ve learned nothing from the last boom-bust. We are repeating it, piling error upon error. “People will spend more of their equity,” Chris Christopher, an economist at IHS Global Insight in Lexington, Mass., …