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Daniel Lacalle

Daniel Lacalle



Articles by Daniel Lacalle

Why Europe’s Highly Regulated Power Market Is So Bad for Growth

2 days ago

In Europe, there is no competitive market for electrical power. And since power is an important factor of production, it also means the overall marketplace is wasteful, inefficient, and sluggish.  Original Article: “Why Europe’s Highly Regulated Power Market Is So Bad for Growth” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by …

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Cuba: The Dictatorship and the “Blockade” Lie

3 days ago

Cuba is a dictatorship that uses terror and propaganda to repress its people. It locks citizens up, strips them of the most basic human rights, silences them, and confronts families using extortion and threats. The regime’s constant practices of illegal detention, the personal ruin of political dissidents, and limitation of fundamental rights have nothing to do with any blockade or embargo …

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This Is a Weak Jobs Recovery

3 days ago

The United States’s jobs recovery is extremely poor, especially if we consider the size of the monetary and fiscal stimulus and the spectacular upgrade to GDP estimates. Original Article: “This Is a Weak Jobs Recovery” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.

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We Can Have Low Interest Rates Or Robust Growth. But Not Both.

7 days ago

Central banks should know by now that you cannot have negative interest rates with low bond yields and strong growth. One or the other. Central banks have chosen low bond yields at any cost, despite all the evidence of stagnation ahead. This creates enormous problems and perverse incentives. It is not a surprise that markets have bounced aggressively, …

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Why Europe’s Highly Regulated Power Market Is So Bad for Growth

19 days ago

Despite an endless chain of monetary and fiscal stimuli, the eurozone consistently disappoints in growth and job creation. One of the reasons is demographics. No monetary and public spending stimulus can offset the impact on consumption and economic growth of an aging population, as Japan can also confirm. However, there is an especially important factor that tends to …

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This Is a Weak Jobs Recovery

22 days ago

The United States’s jobs recovery is extremely poor, especially if we consider the size of the monetary and fiscal stimulus and the spectacular upgrade to GDP estimates. After a massive consensus increase in GDP recovery estimates to 6.5 percent in 2021, no one should be cheering a 5.9 percent unemployment rate, 58 percent employment-to-population ratio, …

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The Stimulus Boom Is Already Over. Now Comes Stagnation.

June 28, 2021

The United States retail sales and jobless claims weakness, significantly below estimates, coincides with the largest fiscal and monetary stimulus in history. Something is not right when these figures come significantly below estimates in an environment of massive upgrades to gross domestic product (GDP). Why? The diminishing returns of stimulus plans are very evident. Artificially boosting GDP with large …

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The G7’s Reckless Commitment To Mounting Debt

June 14, 2021

Historically, meetings of the largest economies in the world have been essential to reach essential agreements that would incentivize prosperity and growth. This was not the case this time. The G7 meeting agreements were light on detailed economic decisions, except on the most damaging of them all. A minimum global corporate tax. Why not an agreement …

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Biden’s Budget Plan: Weaker Growth and Fewer Jobs

June 9, 2021

The first thing any economist should do when reading a budget proposal is to analyze the basic macro assumptions and the results presented by the administration. When both are poor, the budget should be criticized. This is the case of the Biden Budget Plan. Same growth, a lot more debt and less employment. According to the …

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“Supply Bottlenecks” as an Excuse for Inflation

June 8, 2021

One of the arguments most used by central banks regarding the increase in inflation is that it is because of bottlenecks and that the recovery in demand has created tensions in the supply chain. However, the evidence shows us that most commodities have risen in tandem in an environment of a wide level of spare capacity and …

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More Evidence the American Economic “Recovery” Will Disappoint

June 2, 2021

Two things should concern us. First, the weakness of the recovery in the middle of the largest fiscal and monetary stimulus seen in decades, and second, the short and diminishing effect of these programs. Original Article: “More Evidence the American Economic “Recovery” Will Disappoint” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated …

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More Evidence the American Economic “Recovery” Will Disappoint

May 27, 2021

The University of Michigan consumer confidence index fell to 82.8 in May, from 88.3 in April. More importantly, the current conditions index slumped to 90.8, from 97.2 and the expectations index declined to 77.6, from 82.7. Hard data also questions the strength of the recovery. April retail sales were flat, with clothing down 5.1 percent, general merchandise …

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Investors Won’t Buy the “Transitory” Inflation Line

May 25, 2021

Governments always justify printing more money with the excuse that there is no inflation. When inflation rises, they say it is transitory. And when inflation soars, governments blame businesses and shop owners, presenting themselves as the solution with “price controls.” Original Article: “Investors Won’t Buy the “Transitory” Inflation Line​” This Audio Mises Wire is generously …

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Three Reasons Why the Biden Tax Increase Makes No Sense

May 14, 2021

Biden’s tax increase plan does not make sense from a growth, revenue, or deficit perspective, and it does virtually nothing to address the real problem: ballooning spending on programs like Social Security. Original Article: “Three Reasons Why the Biden Tax Increase Makes No Sense​” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated …

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The US Recovery Is Weak, Especially Given the Size of the “Stimulus”

May 6, 2021

It seems that governments want to convince us that they have saved the world when the reality is that the misguided lockdowns were the cause of the economic debacle and lifting them is the main cause of the recovery.  Original Article: “The US Recovery Is Weak, Especially Given the Size of the “Stimulus”​​ This Audio …

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Three Reasons Why the Biden Tax Increase Makes No Sense

May 6, 2021

Anyone who believes the “rich” and large corporations will pay for $28 trillion in debt or the $2 trillion in new deficit has a real problem with math. Biden’s announcement of a massive tax increase on businesses and wealthier segments of the population simply makes no sense. The tax hikes will have a significant impact on economic growth, investment, …

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A Jobless Recovery Is Coming to Europe

April 27, 2021

The destruction of the free market, competition, and innovation may seem appealing to some now, but the likely outcome of poor employment, negative real wage growth, and stagnation should be a real cause of concern. Original Article: “A Jobless Recovery Is Coming to Europe” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated …

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The US Recovery Is Weak, Especially Given the Size of the “Stimulus”

April 24, 2021

The United States: Hardly A Recovery There is an overly optimistic consensus view about the speed and strength of the United States’ recovery that is contradicted by facts. It is true that the United States recovery is stronger than the European or Japanese one, but the macrodata shows that the euphoric messages about aggregate GDP growth are …

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A Jobless Recovery Is Coming to Europe

April 21, 2021

The International Monetary Fund has published its April outlook for the global economy. It has been hailed by most commentators due to the strong upgrade in GDP recovery. The report states that “global growth is projected at 6% in 2021, moderating to 4.4% in 2022. The upward revision reflects additional fiscal support in a few large economies, …

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Lockdowns and Easy Money Bring a Weak Recovery for Europe

April 1, 2021

If we looked at most investment bank outlook reports for 2021, one of the main consensus themes was a strong conviction on a rapid and robust eurozone recovery. They were wrong. This week, Capital Economics joined other analysts and downgraded the eurozone growth, highlighting “We now think that the eurozone economy will recover more slowly than we …

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Yield Curve Control: Bubbles and Stagnation

March 31, 2021

Central banks do not manage risk, they disguise it. You know you live in a bubble when a small bounce in sovereign bond yields generates an immediate panic reaction from central banks trying to prevent those yields from rising further. It is particularly more evident when the alleged soar in yields comes after years of …

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The Everything Bubble: How A Debt-Driven Economy Creates More Frequent Crises

March 22, 2021

The pace of global recoveries since 1975 has been slower and weaker, consistently every time, according to the Organisation for Economic Co-operation and Development (OECD). Recoveries take longer and happen slower. At the same time, periods of crisis are less aggressive albeit more frequent than prior to 1975. Another interesting evidence of the crises and …

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How a Small Rise in Bond Yields May Create a Financial Crisis

March 18, 2021

How can a small rise in bond yields scare policymakers so much? Ned Davis Research estimates that a 2% yield in the US 10-year bond could lead the Nasdaq to fall 20%, and with it the entire stock market globally. A 2% yield can cause such disruption? How did we get to such a situation? …

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MMT Is Fake Economics

March 15, 2021

In this era of monetary fiction, one tends to read all types of undocumented and misguided views on monetary policy. However, if there is one that really is infuriating is the MMT (modern monetary theory) science fiction. One of its main principles is based on a fallacy. “A country with monetary sovereignty can issue all the …

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Subzero Rates Are Coming to the US and the UK

February 17, 2021

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

January 31, 2021

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

January 27, 2021

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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