Hi again Guys! I'm back from Canada, which shows that people can indeed survive the harsh weather there (we got to -30 at one point... during the day). I wanted to have a little post on two big events that may happen this year or the next. I mainly chose these two because of my interest in them but they would, if they conclude, have quite an impact on you guys as well. Since they are very close to us in time (one or two years... or less), you guys will be able to see how my p

Hey People! I have a nice new topic for all my favorite people (and all the others too)! This is very relevant to your good friend Maduro (the clown currently running Venezuela). The price of crude oil decreased substantially lately (it is the lowest it has been in many years). Oil tends to be less expensive when there is stability in producing nations, mainly the middle-east, and when the world economies slow down. We have seen the exact opposite lately... there are violent

Hi Guys! Today's post is from a politically incorrect subject, which are the ones I really enjoy if you remember well. Let's put our emotions aside and try to figure out the Economics of War: who would win from a third world war? I am indeed referring to the tensions between the USA and Russia, with Europe being dragged along for the ride. It would seem that these two old rivals (research the Cold War a bit if you don't know what I'm referring to) are going at it again. SO, w

Have you heard that the US government has fined Bank of America 17 billion dollars in relation to the financial crisis of 2007? Anyone knows why they have to pay all that money? What in the world did they do wrong? Is it just revenge that taxpayers are trying to get or is there a more solid argument behind all this? The accusations, and they are sadly very true it seems, is that part of Bank of America's operations were lying to their clients. They were selling financial prod

I have a bit of a special topic for this time around: Economic Warfare! No I am not going to talk about the sanctions on Russia and their potential Economic impacts (and the potential retaliations Russia might get under way) and No I am not going to talk about Argentina's default (which has now happened), which I already predicted for you guys that just had a semester with me (and a few semesters before that as well, Argentina is a very interesting Economic experiment at the

Hi Guys! The United States of America recently became the biggest producer of crude oil in the world, even higher than Saudi Arabia! Does it mean that they won't have to import gasoline anymore? Specialists are now talking about the USA having surpluses of crude oil, what a change! Be careful: producing enough crude oil does not in any way guarantee that you have enough gasoline. In fact, the USA had access to plenty of crude oil for the longest time but they were still impor

Hello Guys! Have you heard that China might be bigger (economically) than the USA already or is going to be later this year? China's GDP in PPP terms is expected to pass the USA's GDP this year, if it has not done so already!!!! You may hear things like: A new world power; American descent and Chinese ascent; Power has shifted from east to west; Chinese production higher than American one; etc... These headlines sell well but they are, as most things in these media, nothing e

As I mentioned in my Macro class last week, and last semester as well, the debt-ceiling problem of the USA is coming back fast. Their deadline is the 7th of February. Now, for those that would like to make a big safe bet, here's what would be the best for you (I don't expect it to happen but I'll have a lot of fun if it does): the government of the USA is due to vote on an increase in the debt-ceiling, which will let the government borrow more money (as if they didn't have en

Hi again Guys. I heard earlier this week that the gaming industry is bigger than the movie and the music industries combined!!!! Grand Theft Auto 5 for example sold worth $800'000'000 in ONE DAY! Which, by the way, is more than the Avatar movie has made in its lifetime (since 2009). So... what can you guys tell us about this growing industry? A bit of history and economic analysis perhaps? Where does it come from and how did it get soooooo big? ********** A person answered: H

A fairly important politician (I think he's republican) said that the USA would absolutely not default on their debts (the debt ceiling is coming on this week), which gave some confidence to the markets. It would have been much better for currency speculators if the government would not have agreed to raise the ceiling, which would have sent the markets in panic mode. I am fairly convinced that the Fed (Central Bank of the USA) would have disregarded the debt ceiling and/or w

Hi Guys! I came upon an interview showing some more consequences of the government of the USA shutting down. Scientific Research and Development in the USA will also be slowed substantially in some fields. NASA has pretty much shut down as well as other projects dependent on government financing, such as brain research (the brain map), Antarctic research, epidemic monitoring, and more... Can you guys guess what impact this may have on the Economy? GDP will be affected right n

Have you guys heard about the very good catches of Lobsters fishermen saw on the Atlantic side of the USA (mostly from Maine it seems)? You would think this is great but it's threatening smaller fishermen to close down and go bankrupt... anyone can guess why? It is due to the very low price of Lobsters fishermen now have to accept. Since the supply of Lobsters increased a whole lot, and that it was not due to lower costs of production (thanks to technology for example) and no

Here's a Free Markets case study for you guys: What can we learn about the experience of GMOs and of Fracking in the USA? GMOs (Genetically Modified Organisms) and Fracking (gas and extraction by exerting high pressures underground) have been open to free markets in the USA. The main problems with GMO seeds is that they are engineered to be infertile and they are very invasive... Farmers have to purchase these seeds year after year without any hope of getting any from their c

In the USA, the government is about to shut down and the economy is about to go bankrupt... do you guys know why? Also, what impact would these have on the AE function and on GDP? The government of the USA shut down because they would not agree on a budget. The budget includes spending on many different programmes, including defence, education, national assets (such as parks and the statue of liberty), as well as healthcare. Although the new healthcare bill was passed success

Hi Guys! Anyone knows what is the deal with the debt ceiling that the USA is going to hit soon? It is probably one of the reasons the Fed decided NOT to stop their printing of money (which we discussed in an earlier post). I predict that the USD will loose some strength when we hit that ceiling, but don't despair it should go back up soon after (now that the war was probably avoided). Congress is due to vote on it around the third week of October if I remember well, which mea

Do you guys know why the world is so worried about the Fed (central bank of the USA) reducing their printing of money? They are currently "printing" around 85'000'000'000 USD a MONTH (which is more than the total economy of Peru every two months and a half, around five times Peru per year)!!!! The Fed started printing all this money (it's not really printing, as my previous students SHOULD remember) to help boost the then-depressed USA economy (we call this monetary policy).

Did you guys hear that Mc-Jobs (jobs mainly in fast-food restaurants) in the USA are facing some interesting challenges right now? Anyone knows what this is about (I do of course ^_¨)? ********** A person answered: Does it have to do with a publication of the Merriam Webster Dictionary that said exactly that the definition of Mc-Job was: "low-paying and dead-end work". But with the economic downturn in USA, a fast food career just started to become appealing for many?? ******