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Dollar Uber Alles

By | August 4th, 2009|

What happened in Zimbabwe? Zimbabwe had the 30th hyperinflation episode in world history. The first happened during the French Revolution, when inflation topped 50% per month. In late 2008 Zimbabwe’s monthly inflation rate topped out at 79 billion percent. The government had literally printed money to pay its debts. After Mugabe destroyed his economy through confiscation, they didn’t have the tax receipts to pay the [...]

Basket Case

By | August 3rd, 2009|

Is the Dollar done? That’s what some analysts think. After the Chinese publically worried about their Dollar assets and suggested moving to a basket of currencies, some concluded that a commodity-based basked might hold the future of global finance. Higher real rates for the greenback would inevitably follow. But we’ve seen this movie before. It’s a short trailer with no plot. You can’t enact a [...]

Grassy Highways

By | August 2nd, 2009|

Everyone points to the Interstate system as the ideal infrastructure project. Sixty years ago, America was choking on roadway bottlenecks. Dwight Eisenhower once oversaw a coast-to-coast army convoy that took three weeks. As president, his highway initiative cut that time from weeks to days. Now our highways facilitate commerce from around the world to every part of the country. Most places can be accessed in [...]

Back Home Again (Part 2)

By | July 30th, 2009|

It turns out home prices aren’t so far from coming back after all. Yesterday I wrote how housing activity usually picks up before housing prices do. Well yesterday we got housing price data too, and it was pretty encouraging. The Case-Shiller index of home prices reported that prices actually rose, on average, in May versus April. This is the first actual rise in the index [...]

Health Care Express

By | July 29th, 2009|

Now that the House has reached a compromise on health care, we can all breathe easier. That's the theory, anyway. Congress believes that having portable health care that competes with insurance companies will enhance our productivity by freeing up workers who might not change jobs or start new ventures because they might not get health insurance But a major issue is preserving innovation. Our health [...]

Back Home Again

By | July 28th, 2009|

Is the housing market finally turning around? Yesterday the Commerce Department reported that new home sales rose 11 percent to an adjusted annual rate of 384 thousand units per year. With prices still falling, sales have now risen for three months in a row to their highest level since November. Now, November was no great shakes. But now the data is headed up, not down [...]

Revenues? We don’t need no stinkin’ revenues!

By | July 27th, 2009|

Some people you just can't make happy. Like the proverbial rain that falls on a parade, a host of gloom-meisters are out dissing the current earnings season. Sure, earnings are way better than expectations. Sure, Ford, AT&T, and Caterpillar earned way more than anyone expected. Sure they're in economically sensitive industries. But what about sales? You see, most of these bottom-line gains have come from [...]

My Other Car is Also

By | July 24th, 2009|

These days, car trouble is a global business. VW is looking to buy Porsche. The Chairman of VW is actually part of the Porsche family. A few months ago it looked like Porsche was going to buy VW, but when that deal fell apart, the head of Porsche and his deputy quit. So now it looks like VW will be the buyer. Hey, VW has [...]

Obi-Wan Speaks

By | July 23rd, 2009|

From the halls of Congress to the pages of the Wall Street Journal, we're getting an earful. Fed chairman Ben Bernanke spoke to Congress yesterday about how the Fed intends to remove the piles of cash they've been throwing at our economic problems. The short answer is, they'll raise rates. But not any time soon. The larger question he's facing is why we need an [...]