Submitted by Gail Tverberg via Our Finite World blog,
Our economy is a mystery to almost everyone, including economists. Let me explain the way I see the situation:
(1) The big thing that pulls the economy forward is the time-shifting nature of debt and debt-like instruments.
Several weeks ago, when we showed dramatic scenes from a Venezuela looting in which countless people were wounded after 5,000 looters stormed a supermarket, looking for food...
¡VENEZUELA TIENE HAMBRE! #Video Saquean Mercado Mayorista Maracay #11May pic.twitter.com/DGRZ1bgkgI vía @venezolanodecen #CNERevocatorioYA
— El llanero (@llaneroVen) May 11, 2016
Submitted by Michael Snyder via The End of The American Dream blog,
Last month we showed just how severe the collapse in Venezuela had become, as starving Venezuelans took to looting supermarkets and other food dispensaries in search of whatever food could be found.
Inflation is out of control. Now, we mostly agree that the Fed's official inflation numbers are just - ridiculous. But the real inflation, is even harder to quantify, and more subtle - as we explain in Splitting Pennies - Understanding Forex. What drives inflation is NOT Adam Smith's "Supply and Demand" - an interesting idea but completely static, and completely irrelevant for practical applications - and certainly not useful for business, or economic forcasting. Inflation is a simple function of monetary policy, multiplied by FX.