Washington politicians, Treasury officials and Federal Reserve bankers ought to think twice about further leveraging the U.S. Economy. Bailouts and Government subsidies are not the solution to building a robust free market economy (nor to winning elections). What do we have to show for the massive debt issuance that takes place each year? Moral hazard … Continue reading Diminishing Public Debt Returns
Tag: Nominal GDP
Last month we wrote that peak inflation as measured by the CPI was not in sight. We saw further evidence in today's reported 7.5% CPI figure. Producers have yet to fully push through price increases for goods and services for calendar year 2022 across categories. In addition, we keep harping on the BLS' owners' equivalent … Continue reading Consumer Prices Have Upside Risk From Here
The Atlanta Fed's real GDP estimate of 3.7% is well below inflation as measured by the Fed (CPI of 5.4%) and well below any real world price inflation measure. We do not subscribe to the Fed's theory that price inflation is transitory. Our view is that price inflation will grow from here. If real GDP … Continue reading It Is Beginning To Look Like Stagflation
Whether one measures EV/Revenue multiples, EV/EBITDA multiples, Stock Market P/E multiples or various other measures there is no doubt the market is frothy and that certain sectors are firmly in bubble territory. Two trends are troublesome. The first is that the Market Cap to GDP ratio (measured by the Wilshire 5000 index to Nominal GDP) … Continue reading Stocks Are at A High. Labor Participation Is at A Low.