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Daniel Lacalle

Daniel Lacalle



Articles by Daniel Lacalle

Subzero Rates Are Coming to the US and the UK

7 days ago

Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists, who all start from a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save too much and therefore saving must be penalized to …

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Compared to Europe and China, America Is Still a Safe Bet

25 days ago

There’s a lot of excessive optimism about the economy during the next four years in America. However, the US still comes out on top when compared to Europe and China. Original Article: “Compared to Europe and China, America Is Still a Safe Bet” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by …

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Compared to Europe and China, America Is Still a Safe Bet

29 days ago

Many financial experts have rushed to make what has been regarded as “Biden trade” calls based on the projections by the Associated Press, NBC News, and other news outlets of a Joe Biden presidency. The “Biden trade” is a synonym of a recommendation to invest in assets that may benefit from a Democratic presidency judging by …

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Why Mainstream Economic Forecasts Are So Often Wrong

January 15, 2021

Thanks to politics, confirmation bias, and bad monetary economics, central banks have a lousy record when it comes to economic forecasts. Original Article: “Why Mainstream Economic Forecasts Are So Often Wrong” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.  

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This Time Is Not Different: More Debt, Less Growth

January 11, 2021

I remember that in 2009 three messages were constantly repeated: “In this crisis measures are different, because governments are investing in the recovery by increasing public spending,” “the funds from stimulus plans will strengthen the recovery “and “central banks help a stronger recovery by lowering rates and increasing liquidity.” Then, 2010 arrived and the Eurozone entered …

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Why Mainstream Economic Forecasts Are So Often Wrong

January 8, 2021

Every end of the year, by the end of the year, we receive numerous estimates of global GDP growth and inflation for the following year. Historically, almost in all cases, expectations of inflation and growth are too optimistic in December for the following year. If we look at the track record of central banks, it …

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The ECB’s Latest Big Mistake

December 31, 2020

One of the great mistakes among economists is to receive the measures of central banks as if they were the revealed truth. It is surprising and concerning that it is considered mandatory to defend each one of the actions of central banks. That, of course, in public. In private, many colleagues shake their heads in disbelief …

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New Lockdowns and More Regulations Are Disastrous for US Jobs

December 10, 2020

United States jobless claims have picked up, since the elections and the second wave of coronavirus have slowed down the economic recovery. Uncertainty about tax increases and changes in labor laws, including an increase in the minimum wage, add to the fear of new lockdowns, as employers see the devastating effects of these lockdowns in European employment. …

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There Is No Chinese Economic Miracle

December 7, 2020

In most economies, inventories are valued at market prices, while in China they are valued by the authorities and adjusted later. This is just one of many ways China manipulates GDP data. Original Article: “There Is No Chinese Economic Miracle”. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.

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The “Great Reset” and Plans for a Global War on Savings

December 7, 2020

Global debt is expected to soar to a record $277 trillion by the end of the year, according to the Institute of International Finance. Developed markets’ total debt—government, corporate, and households—jumped to 432 percent of GDP in the third quarter. Emerging market debt-to-GDP hit nearly 250 percent in the third quarter, with China reaching 335 …

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There Is No Chinese Economic Miracle

December 4, 2020

Listen to the Audio Mises Wire version of this article. The year 2020 will be an extremely tough year for the European economy. Added to an unprecedented drop is a strong impact in the fourth quarter due to the new lockdowns. Morgan Stanley estimates that the eurozone’s GDP will fall by 2.2 percent in the fourth quarter, a …

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While Household Income Falls, Central Bankers Are Pushing for Higher Prices

November 16, 2020

Central banks continue to be obsessed with inflation. Current monetary policy is like the behaviour of a reckless driver running at 200 miles per hour, looking at the rear-view mirror and thinking “we have not crashed yet, let’s accelerate”. Central banks believe that there is no risk in current monetary policy based on two wrong …

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American Voters: Don’t Look to Europe as a Model

October 31, 2020

The United States election campaign is focused primarily on how much the next president will spend and the measures to combat coronavirus. Both issues should point to one conclusion: unlike what candidate Biden wants to do, the next United States president should not copy the European Union. As we face a second wave of coronavirus outbreak in …

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Furloughed Jobs Disguise the Eurozone Employment Crisis

October 20, 2020

The United States jobs recovery slowed down slightly in September, but the employment recovery is still faster than in most comparable economies. The jobs report showed a healthy 661,000 gain in nonfarm payrolls last month. Much of the difference with consensus came from shifts in government payrolls, which fell 216,000 in September. However, private payrolls …

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The Recovery Is Stalling. We Need Pro-Market Reforms Now.

October 20, 2020

Politicians have ignored the threat to small businesses that are failing not because their owners used the wrong strategies, but have been destroyed by the misguided and ineffective forced shutdown. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “The Recovery Is Stalling. We Need Pro-Market Reforms Now.​”.

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The Recovery Is Stalling. We Need Pro-Market Reforms Now.

October 14, 2020

The Economic Sentiment Index of the European Commission for August shows that the recovery of the European economy is slowing down. Not only has the pace of recovery slowed significantly, but the data for Spain reflected evidence of being the only economy in the euro area where the index fell compared to July. If we look …

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If the US Adopts Eurozone Policies, the Jobs Recovery Will Suffer

October 5, 2020

The best social policy is one that supports job creation and rising wages. Entitlements do not make a society more prosperous, and ultimately drive it to stagnation. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “If the US Adopts Eurozone Policies, the Jobs Recovery Will Suffer​”.

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If the US Adopts Eurozone Policies, the Jobs Recovery Will Suffer

September 28, 2020

The employment recovery in the United States is as impressive as the collapse due to the lockdowns. In April I wrote a column stating that “The U.S. Labor Market Can Heal Quickly,” and the improvement has been positive. Very few would have expected the unemployment rate to be at 8.4 percent in August after soaring to almost 15 …

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The US Dollar Collapse Is Greatly Exaggerated

September 14, 2020

The US Dollar Index has lost 10 percent from its March highs and many press comments have started to speculate about the likely collapse of the US dollar as world reserve currency due to this weakness. These wild speculations need to be debunked. The US dollar year-to-date (August 2020) has strengthened relative to 96 out of …

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Bankruptcies Rise Despite Trillions in New Liquidity

September 7, 2020

Misguided lockdowns have destroyed the global economy and the impact is likely to last for years. The fallacy of the “lives or the economy” argument is evident now that we see that countries like Taiwan, South Korea, Austria, Sweden, and Holland have been able to preserve the business fabric and the economy while doing a much …

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The Global Jobless Recovery

September 2, 2020

So far, the United States is leading Europe in employment improvement, but the full recovery is extremely far away. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “The Global Jobless Recovery​”

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Massive Stimulus Won’t Prevent a Eurozone Slowdown

August 28, 2020

The European Central Bank balance sheet has risen to 53.9 percent of GDP in July 2020. This compares to the 32 percent of the Federal Reserve and 33 percent of the Bank of England. This means a €1.78 trillion increase year to date. Furthermore, excess liquidity has soared to €2.9 trillion, a €1.2 trillion increase since January. Added to this unprecedented monetary stimulus, the eurozone has …

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The Global Jobless Recovery

August 22, 2020

The United States added 1.76 million Jobs in July 2020, compared to a consensus estimate of 1.48 million. Unemployment fell to 10.2 percent versus the 10.6 percent expected. It is true that the rate of job creation is slowing down and labor force participation rate remains at 61.4 percent, but we need to compare the figures …

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Why the US Economy Is Stronger Than the Eurozone’s

August 14, 2020

Debt and recession in the United States are big problems. But in both cases, metrics show a better situation in the US than in the eurozone. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “Why the US Economy Is Stronger Than the Eurozone’s”.

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Why the US Economy Is Stronger Than the Eurozone’s

August 6, 2020

The United States is showing resiliency and strength compared with other leading economies worldwide. The impact of the covid-19 forced shutdown crisis is lower in the United States than in Japan, Germany, France, the average of the European Union 27, and the euro area countries. The recovery is also stronger and more sustainable. This does not mean that the …

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Trump’s Spending Is Delaying a Recovery. Biden Would Be Even Worse.

August 6, 2020

Debt matters, even if interest rates are low. Increasing debt and spending means lower growth and weaker real wages in the future. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “Trump’s Spending Is Delaying a Recovery. Biden Would Be Even Worse.​​”

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Trump’s Spending Is Delaying a Recovery. Biden Would Be Even Worse.

July 31, 2020

The dramatic economic decline due to the COVID-19 crisis and the unprecedented recovery spending plans approved by President Trump will drive the fiscal 2020 United States budget deficit to a record $3.8 trillion, or 18.7 percent of US gross domestic product, according to the Committee for a Responsible Federal Budget (CRFB). According to the same estimates, the …

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The World Is Drowning in Debt

July 21, 2020

According to the International Monetary Fund (IMF), global fiscal support in response to the crisis will be more than $9 trillion, approximately 12 percent of world GDP. This premature, clearly rushed, probably excessive, and often misguided chain of so-called stimulus plans will distort public finances in a way which we have not seen since World War …

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Europe’s Bailouts Risk a Full-Blown Financial Crisis

July 6, 2020

The measures implemented by governments in the eurozone have one common denominator: a massive increase in debt from governments and the private sector. Loans lead the stimulus packages from Germany to Spain. The objective is to give firms and families some leverage to pass the bad months of COVID lockdowns and allow the economy to …

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Why the Central Bank “Bailout of Everything” Will Be a Disaster

June 24, 2020

Despite massive government and central bank stimuli, the global economy is seeing a concerning rise in defaults and delinquencies. The main central banks’ balance sheets (those of the Federal Reserve, Bank of Japan, European Central Bank, Bank of England, and People’s Bank Of China) have soared to a combined $20 trillion, while the fiscal easing …

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