January 26, 2018


With the GDP report we hear lot´s of celebratory comments. A typical one: The U.S. appears to have entered a stage of stronger economic growth, years into a historically modest expansion. Unfortunately, that´s not true. Just look at the chart. The “uptake” in 2014 was much stronger, but fizzled. This time, it´s weaker. Will it be more long lasting? The Fed seems to think that if you “drive slowly, you´ll grow longer”! In several other instances, even those characterized by deep depressions, the economy recovered. That simply has not happened this time. Observation: It is said that this expansion is… Read More


"Drive slowly, grow longer"

Maybe Janet Yellen set it off with her comment in December “The global economy is doing well. We’re in a synchronized expansion. This is the first time in many years that we’ve seen this.” It was picked up in Davos: DAVOS, Switzerland—The world is enjoying its broadest, strongest growth in years, and everyone has an explanation, from the U.S. tax cut to the recovery in oil prices. Let´s check. World industrial production may be a good proxy for overall world economic activity. The chart indicates that it is not only the advanced economies such as the US, EZ or UK… Read More