Business

In what should be a relatively quiet, mid-summer week if only on the global economic schedule even as domestic and global political tensions continue to set the general risk tone on any given day, the focus over the next few days will be on US retail sales on Tuesday and Industria Production on Thursday, as well as on monetary meeting minutes from the Fed and the ECB. Here, focus is on the inflation outlook and discussion of transitory vs persistent factors.

Last week, we said:

It is commonly accepted to say the dollar is “printed”, but we can see from this line of thinking it is really borrowed. There is a real borrower on the other side of the transaction, and that borrower has powerful motivations to keep paying to service the debt.

Bitcoin has no backing. Bitcoin is created out of thin air, the way people say of the dollar. The quantity of bitcoins created may be strictly limited by Satoshi’s design.

Authored by Charles Hugh Smith via OfTwoMinds blog,

If we stop counting zombies, we're already in recession.

How shocked would you be if it was announced that the U.S. had just entered a recession, that is, a period in which gross domestic product (GDP) declines (when adjusted for inflation) for two or more quarters?

• Korea tensions ease slightly as U.S. officials play down war risks (Reuters)
• Pence Plays Down Trump Threat on Venezuela (WSJ)
• Trump Pressed to Reject White Nationalist Groups (WSJ)
• White House Says Trump Abhors Neo-Nazis (BBG)
• Charlottesville, and the World, Take Stock of Violent Episode (NYT)
• Car Attack Suspect Had Shown Troubling Behavior (NYT)
• U.S. Default? Unlikely, But Bond Traders Are Taking No Chances (BBG)
• Voters sense betrayal in Britain's Brexit heartlands (Reuters)

Confirming the credit impulse peak is passed (June's surprise beats), China's July macro-economic data is ugly. Retail Sales, Industrial Production, and Fixed Asset Investment all fell and missed notably. For now the reaction is absolutely nothing...

National Bureau of Statistics reports some ugly data for July: