Australia Is "Going Down Under": "The Bubble Is About To Burst", RBS Warns

Thanks to a variety of idiosyncratic political crises and country-specific stumbling blocks, Brazil, Turkey, Malaysia, and to a lesser extent Russia, have received the lion’s share of coverage when it comes to assessing the EM damage wrought by the comically bad combination of slumping commodities prices, depressed Chinese demand, slowing global trade, and a “surprise” yuan devaluation.  Put simply, the intractable political stalemate in...

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Central Banks Don't Dictate Interest Rates

According to mainstream thinking, the central bank is the key factor in determining interest rates. By setting short-term interest rates the central bank, it is argued, through expectations about the future course of its interest rate policy influences the entire interest rate structure. (According to expectations theory (ET), the long-term rate is an average of the current and expected short-term interest rates.) Note that interest rates in...

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Aussie Property Market Collapse Looms As Chinese Flee Amid Capital Controls

Given the recent admission by the Australian Central Bank that property prices "have gone crazy," it appears new Chinese 'regulations' may just kill Australia's golden goose of 'weath creation' as Aussie's largest trade partner sees its economy collapse. While the Aussies themselves proclaimed a "war on cash," it appears, as AFR reports, thatChinese purchases of Australian property have dropped significantly in the past month,...

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Markets Brace Themselves for First Rate Hike Since 2006

The first line of The Economist's article puts it this way: "The last time the Federal Reserve raised its benchmark interest rate, there was no one to tweet about it." That's because there was no such thing as Twitter in June 2006, when the Fed raised the Federal Funds Target rate from 5 percent to 5.25 percent. MySpace was still popular then, too, and YouTube was only 18 months old. But, since then, the Fed has only decreased the...

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Canada's Real Estate Bubble Turns Bust

A report from the Financial Post shows that Calgary in Alberta Canada now has 1.7 million square feet of empty office space, the most in North America with another 5.2 million under construction! After years of booming construction, the natural resource rich country is starting to feel the pinch. CALGARY – The number of half-empty office buildings in Alberta is projected to spike, as Colliers International predicts an “ill-timed”...

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What’s Coming Unglued Now in Canada?

Canada lumbered through the first half of 2015 in a “technical recession,” Statistics Canada confirmed this week, as GDP shrank in both quarters. Among the culprits: the swooning energy sector and an investment slump. Now everybody is lining up behind the hope that a sudden acceleration will put the economy back on track in the third quarter, despite oil that has re-crashed and despite the ongoing collapse – and that’s what it is – of the...

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Why Economics Matters

This article is a selection from a June 19 presentation at a lunchtime meeting of the Grassroot Institute in Honolulu at the Pacific Club. The talk was part of the Mises Institute’s Private Seminar series for lay audiences. To schedule your own Private Seminar with a Mises Institute speaker, please contact Kristy Holmes at the Mises Institute. First let me say that what we today...

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