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China Prepares Wealth Redistribution and “Regulation of High Incomes”

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In an attack on wealth and income that may sound familiar to Americans, China's Communist Party government has set out a plan to redistribute wealth and regulate "high incomes." Tom Mitchell and Sun Yu report fro the Financial Times: President Xi Jinping has called for stronger “regulation of high incomes” in the latest sign that a 10-month campaign targeting China’s largest technology companies is rapidly expanding to encompass broader social goals. State media reported that a meeting of the Chinese Communist party’s Central Financial and Economic Affairs Commission on Tuesday, chaired by … [Read more...]

Will Inflation Fears Impact Biden’s Budget Plan?

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There isn't much as dangerous for politicians as rising prices on constituents. With relentless inflation hitting Americans hard, some politicians are growing wary of record spending. Colby Smith and Lauren Fedor report for the Financial Times: The $3.5tn price tag on the Biden administration’s budget plan has ignited fresh debate in Washington about the potential inflationary effects of increased public spending at a time when US consumer prices are rising rapidly. The US Senate on Wednesday passed a budget resolution that will form the basis of a sweeping bill that would make big … [Read more...]

INFLATION FOREVER: Researchers Suggest the Cure-All Is More Inflation

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Former Fed employees have performed research that suggests the answer to all America's economic woes is simply higher inflation. They suggest the Fed should raise its target rate by 50% from 2% to 3% for the next 15 years or so after COVID-19 has been handled. Other economists are even suggesting the rate should be raised forever. Howard Scheider reports at Reuters: The Federal Reserve may be wrestling with an inflation problem, but two former senior staffers at the U.S. central bank argue that continued higher prices in the future may be what is needed to shift the whole economy to a … [Read more...]

Consumer Sentiment PLUNGES to Lowest Levels Since Obama Era

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Consumer sentiment has fallen to the lowest level in almost a decade. Not since Barack Obama's first term have the American people been so pessimistic about their economy. Bloomberg's Jordan Yahoo reports: U.S. consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases. The University of Michigan’s preliminary sentiment index fell by 11 points to 70.2, the lowest since December 2011, data released Friday showed. The figure fell well short of all estimates in … [Read more...]

Worries Over Delta Variant Hit IEA Oil Demand Forecast

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The International Energy Agency is lowering its forecast of oil demand citing the possibility countries will implement new lockdowns in response to the spread of the COVID-19's Delta variant. Neil Hume reports in the Financial Times: The International Energy Agency has “sharply” lowered its oil demand forecasts for the rest of the year after several major energy-consuming countries imposed fresh curbs to stop the spread of the Delta coronavirus variant. In its monthly market report, the Paris-based organisation said growth would be 500,000 barrels per day lower in the second half of 2021 … [Read more...]

HACK HEIST! Crypto Owners Hit With One of the Biggest Thefts EVER!

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Owners of cryptocurrency have been frequent targets of cyber theft. Some of the most infamous cases of crypto-looting were Coincheck in 2018 and Mt. Gox in 2014. Now, a new heist can be added to the list. Hackers have stolen over $600 million in crypto from the Poly Network. Anna Hirtenstein reports for The Wall Street Journal: Hackers stole cryptocurrencies worth more than $600 million from Poly Network, a decentralized finance, or DeFi, platform, in one of the largest crypto heists of recent years. Poly Network, which uses digital assets for lending and other financial transactions, … [Read more...]

NO BIG DEAL? Infrastructure Bill Could Be a Dud

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With a life spread out over ten years, and a $550 price tag that pales in comparison to the spending spree politicians have been on for the last two years, the infrastructure bill passed by the Senate may not be that impactful. Paul Kiernan writes in The Wall Street Journal: WASHINGTON—The bipartisan infrastructure bill is unlikely to have a big impact on growth in the next few years, economists say. Longer term, though, investments in highways, ports and broadband could make the economy more efficient and productive. The short-term boost to growth will be relatively limited for two … [Read more...]

Democrats Want Joe Biden to Forgive Student Loans. ALONE.

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The Wall Street Journal reports that Democrats want Joe Biden to forgive students loans, but that they don't want to have to vote on it. The Journal's editorial board writes: Forbearance was supposed to expire at the end of September, but Education Secretary Miguel Cardona says a four-month extension is necessary to give borrowers “the time they need to plan for a restart.” Pardon? They have the next two months to plan. Most don’t need that. The unemployment rate among bachelor’s degree recipients was 3.1% in July. Borrowers haven’t had to show they’ve been hurt by the pandemic to receive … [Read more...]

PROJECT HAMILTON: The Fed’s Little-Known Plan for Digitizing the Dollar

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The Fed, along with researchers at MIT, is attempting to understand what it would take to create a US-backed digital currency. Gillian Tett reports in the Financial Times: Last year the Boston Fed asked researchers at MIT to embark on a project to build and test “with boldness [and] ingenuity” the computing systems needed to support a US-backed digital currency. That is scheduled to deliver two policy papers next month: one covering the CBDC coding challenges; the second on economic and design choices, such as what putative digital dollars might mean for commercial banks. To … [Read more...]

RENTS SOAR: Prices Way Up for City Dwellers

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As inflation hits U.S. markets in many forms, one emerging area of price increases is for rents in big cities. Renters are coming back to the market that was devastated during 2020's pandemic scare. Bloomberg's Prashant Gopal reports: The biggest wave of tenants in U.S. history has arrived, and landlords are responding with the largest-ever rent increases. In the second quarter, the number of occupied units jumped by about half a million, the biggest annual increase in data going back to 1993, according to industry consultant RealPage Inc. Rents on newly signed leases soared 14.6% in June … [Read more...]