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Daniel Lacalle

Daniel Lacalle



Articles by Daniel Lacalle

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

12 days ago

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

28 days ago

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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Why the European Recovery Plan Will Likely Fail

June 16, 2020

The €750 billion stimulus plan announced by the European Commission has been greeted by many macroeconomic analysts and investment banks with euphoria. However, we must be cautious. Why? Many would argue that a swift and decisive response to the crisis with an injection of liquidity that avoids a financial collapse and a strong fiscal impulse …

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An L-Shaped Recovery Is Not an Anomaly, It Is the Norm.

June 2, 2020

The massive bailout of indebted sectors that already had overcapacity and were in process of obsolescence may also drive the largest wave of malinvestment in decades. If the previous recoveries came with poor wage and capital expenditure growth and high debt, the next one will likely be even worse. This Audio Mises Wire is generously …

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An L-Shaped Recovery Is Not an Anomaly, It Is the Norm.

May 30, 2020

Many analysts and economists are trying to predict the shape of the economic recovery post-COVID-19. To understand how the recovery may look, we need to look at past recoveries and at the history of pandemics. Starting with the pandemic, we know a few things. First, there has never been a vaccine for any of the …

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The ECB Has Been Hiding Risk. They Won’t Be Able to Do It Much Longer.

May 18, 2020

Despite the unprecedented increase in the European Central Bank’s asset purchase program, the spread of southern European sovereign bonds versus German ones is rising.   White: Italy 10-Year vs. German 10-Year | Orange: Spain 10-Year vs. German 10-Year | Yellow: Portugal 10-Year vs. German 10-Year The ECB balance sheet has soared to more than 42 percent of …

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Three Reasons Why the Eurozone Recovery Will Be Poor

May 11, 2020

The eurozone economy is expected to collapse in 2020. In countries such as Spain and Italy, the decline, more than 9 percent, will likely be much larger than in emerging market economies. However, the key is to understand how and when the eurozone economies will recover. There are three reasons why we should be concerned: The …

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How Governments Broke the Oil Market

May 5, 2020

The Organization of the Petroleum Exporting Countries (OPEC) and its partners have been cutting production since September 2016. Between September and November 2016 they cut production by more than 1.7 million barrels a day, a historical cut that was wrongly prolonged throughout the expansionary phase of the global economy. In December 2018 they cut production …

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Central Banks and the Next Crisis: From Deflation to Stagflation

April 23, 2020

When governments and central banks announce massive stimulus packages at the very beginning of a crisis, they bet on a speedy recovery and a return to normal as if nothing had happened. This is far from the case. This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros. Original Article: “Central …

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Central Banks and the Next Crisis: From Deflation to Stagflation

April 22, 2020

All over the world, governments and central banks are addressing the pandemic crisis with three main sets of measures: Massive liquidity injections and rate cuts to support markets and credit.Unprecedented fiscal programs aimed at providing loans and grants for the real economy.Large public spending programs, fundamentally in current spending and relief measures.However, they may cause deeper …

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The US Labor Market Will Heal Faster Than the European One

April 16, 2020

The jobless claims figures of the past two weeks have been unprecedented and alarming. However, knowing that the data will continue to be concerning, we need to analyze how quickly the economy can can heal and go back to the previous path of record job creation. The United States economy starts from a comparatively stronger base. …

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Why the World Has a Dollar Shortage, Despite Massive Fed Action

March 31, 2020

How can the Fed launch an “unlimited” monetary stimulus with congress approving a $2 trillion package and the dollar index remain strong? The answer lies in the rising global dollar shortage, and should be a lesson for monetary alchemists around the world. The $2 trillion stimulus package agreed by Congress is around 10% of GDP …

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Governments Can’t Fix This Economic Crisis They Caused

March 27, 2020

Before analyzing the emergency plans that the global economy needs, we must remember that, as in the past, the prudence and responsibility of the civil society and businesses will help us to get out of this crisis . In the face of an unprecedented crisis, we have to be realistic, responsible and cautious. This is …

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