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About 60% of the population in Guinea, Sierra Leone, and Liberia, countries worst affected by the Ebola virus are facing food shortages. Markets are closed in these countries reducing access to food. The virus is affecting West Africa in other ways. Ample food supplies with lower prices of corn, wheat and rice on world markets, as a result of supplies from Brazil, India and Thailand, is not reaching Africa because of restricted access because of Ebola. Clogged ports, and conflicts adding to this reduced access. In East Africa the FAO estimates 20 millon people face food shortages up from 15 million estimate earlier. The rise in value of the dollar in relation to African currencies is increasing prices of food. Food price inflation is leading to a situation where an household with many children in a relatively better off country like Uganda being able to afford only one meal a day. The result will be increase in malnutrition in Africa if solutions are not found to get access to large food supplies outside Africa with lower prices. ...

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IMF research by Ocampo and Erten shows that when adjusted for inflation since the 1970's, the prices of metals have remained about the same, food prices down 58%, and energy prices up 163%.

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In 2025 about $75,000 is considered income yearly for 2 adults and 2 children as the bottom rung of the middle class in America. About half the 70 million children in America, 35 million children are in conditions that involve need for food assistance and other aid, where the sense of income security, healthy food security, that was seen in the 1950's to 1990's the post war industrialization period is now missing in the closing days of the deindustrialization period of America in 2020-2025. WSJ's Dan Frosch provides this report from Binghamton, Broom county in upstate New York. At one time this area was part of the industrialization age in post war America. IBM offices were located here in Endicott. These office buildings of IBM are now being demolished. Instead of industry the economy depends on the University of Binghamton and the university attracts out of state students who bring in new investments in housing. Lower income yet middle class families face higher divorce rates with more single mothers struggling on incomes where they are on the border line for food assistance, and as wages creep up lose food and other aid. At income levels of $39,000 these families struggle to feed children. The poverty rate which declined during covid assistance period was already up in 2023 as government aid phased out under Biden and is now up further. A quarter of children in a once proud industrial region of America in upstate New York near Syracuse, now face poverty conditions. Life is a constant struggle to pay the rent, falling behind on utility or other bills and not having enough for food and other basic needs even at $39,000 year because of the inflation and cost of living having jumped in the last 5 years.   ...

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Project 2025, originating at the Heritage Foundation, most dangerous idea similar to abolishing Social Security is to consider abolishing the US Federal Reserve. Why? Because the Fed was established to avoid banking panics and setup a sound banking system, a sound economic system. It suggests unravelling solutions that were developed after one hundred years of experience gained by US that has made the period since 1950 the least crisis prone compared to prior to Fed's formation in 1913.  Mr. Trump himself said in 2022 that the Heritage Foundation will "lay the groundwork and detail the plans" for what our movement will do, according to the WSJ report." It has become a matter of huge controversy with plans for outright attacks on the civil service, a blueprint of plans to shut down important government agencies such as the Education Department, Department of Homeland Security, and affect the functioning of the government of the United States in accordance with the Constitution.  The most radical is to change the financial system of the US that evolved from the Great Depression and previous economic crises since 1900 that led to the formation of the US Federal Reserve as the central bank that monitors aspects of the economy such as inflation and unemployment. Project 2025 says consider abolishing the US Federal Reserve and replace it with 'free banking' that does not control interest rates or the supply of money. These are untested ideas but more significant is the fact that it is the US Fed that under different presidents has taken the lead in managing the economy when a crisis happened. President Woodrow Wilson signed into law the founding of the US Fed, and its regional Fed system with a. supervisory board in Washington on Dec 23, 1913. Before the Fed the US currency was printed by individual banks and inflation or the economy could not be controlled. This led to banking panics the last in 2007, with great loss to the working people and families of America. It is unthinkable today that individual banks not the central bank the US Fed would issue US currency dollar banknotes. Yet it is just this kind of radical Barry Goldwater type of idea that is being put forward in Project 2025 that is written for a future administration running the country. ...

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Treasury Secretary Janet Yellen is the only Treasury Secretary who also served as the chairperson of the US central bank the Federal Reserve 2014-2018, and the only woman in these roles. Here she says she toured the country in 2022 a year after joining the Biden administration as head of the finance ministry. What she has seen are the early results of president Biden's  two trillion dollar bills, the Inflation Reduction Act of 2022 and the Science and CHIPS Act 2021, which give manufacturing and new infrastructure building a critical role in a new revitalized America. All across this vast country aging infrastructure is being rebuilt and new infrastructure is changing the landscape. Yellen says the US economy is resilient and growing amidst a global economic slowdown and higher interest rates. The labor market is strong and household balance sheets are healthy, consumer spending robust, says Yellen. It provides the basis for American global economic leadership in the years ahead. ...

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In three months since August 2011, the Indian rupee has fallen from 45 rupees to the dollar to 52 rupees. Analysts at HSBC see a decline in the value of the rupee to 58 rupees to the dollar. Foreign investment in India declined from $6.5 billon in June 2011, to 616 million in September 2011. The Indian economy is expected to see a sharp slowdown with growth estimated at 7.2% in the current fiscal year down from 8.5% in the prior year. Inflation is at over 10% for the last 12 months. The sharp drop in the value of the rupee is expected to worsen inflation. India's imports exceed exports by $80 billion. Any increase in exports in a slowing global economy will be offset by higher cost of imports. India pays for oil and other commodity imports in dollars, and subsidizes fuel and fertilizers, which would lead to a worsening of the large fiscal deficit. It is in this environment that the Congress led government decided to open up the retail sector by allowing 100% ownership in single brand retailing, and 51% in multibrand retailing. Foreign retailers will be allowed to setup stores in cities with more than one million people, of which there are 53 cities in India. Other restrictions are 50% of the required over $100 million investment has to be in back end infrastructure, and 30% of goods sold must be bought from small companies, according to Commerce minister, Anand Sharma. Each of India's 28 states would compete to individually permit retailers to open stores in their state. The investment in the retail sector will come over a number of years....

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Domestic tourist trips up 19% over 2019 in China as China opens up to tourism are leading to only a 1% increase in total tourist spending, as tourists are just plain thrifty. Food inflation that is 10-15% in the US is about a catastrophic 40% in Europe with creeping higher margins of grocery stores. Compare that with China where inflation is less than 1%. WSJ looks at Zibo a city in China that was like hundreds of smaller industrial cities in China until a government publicity campaign got about 4.7 million people to visit it for its barbecue pancakes. The prices were relatively inexpensive with two people eating for $20. Yet this type of tourism is not boosting the Chinese economy when exports are slowing and the construction sector is in poor shape financially. 

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WSJ's Christopher Mims shows the failure of tech startups in low margin industries in which the startups added little real innovation. What he does not say is that these so called "tech startups" have caused a massive capital misallocation and poor productivity of capital for trillions of dollars of American savings. This  happened when the productivity of capital for infrastructure and manufacturing industries in which the US has fallen behind is increasing. It has also caused "crowding out" of essential government investments in infrastructure and manufacturing in the US. In food delivery, used car delivery, online streaming and a whole range of business startups sales are falling as consumers hit by high inflation are budgeting carefully for all expenses. Many are disappearing after years of losses leaving a trail of destruction that includes the unrealized infrastructure and manufacturing that America's communities so badly need.  ...

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At a time of high inflation and food scarcity, the chancellor Rishi Sunak's wife's non-dom status breaches no law but sends a divisive social message, says this opinion in The Guardian. This is also because taxes are the only way for governments- whether Tory or Labor it is the same for all- to fund social benefits, social infrastructure and physical infrastructure, on which the real quality of all of our lives ultimately depends.

 

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Krugman points out the risks for the U.S. economy as the U.S. loses export competitiveness with the euro reaching parity with the dollar. The huge shift from $1.50 to the dollar at one point to parity gives Europe a sudden strong boost. Europe needs the boost to escape a deflationary trap, and there is little that can be done for capital flows and exchange rates, says Krugman. He points out that many Federal Reserve governors were clueless of the impact this could have on U.S. growth, sanguinely assuming the U.S. would boost growth in 2015. Better says Krugman for the Fed to be very careful about raising rates at a time when wage growth is sluggish, and inflation low.

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President Mauricio Macri of Argentina loses badly in a nationwide primary in Argentina. Peso and stocks dropped after the defeat and a sense that Macri's policies have not worked. The economy declined 5.8% in the first quarter of 2019 from a year earlier, with some recovery in recent months.  Following the defeat by Peronist party candidate Alberto Hernandez, Macri announced measures to help Argentine workers and middle class. He raised the minimum wage, increased public sector salaries, and put a freeze on fuel prices.  The Peronist party's Alberto Hernandez now looks likely to succeed Macri. Inflation is at 56% in June. Hernandez is a former cabinet chief under Christina Kirchner and Nestor Kirchner, former presidents. Christina Kirchner is running as Hernadez's running mate for vice president.  Under Christina Kirchner the government ran large deficits and defaulted on the national debt. Drop in commodities prices hurt Argentina and it also hurt Brazil during that period, worsening state finances. Macri provided an alternative but his market friendly policies have failed to help ordinary Argentines through errors in policy making and much of the early enthusiasm is lost. High inflation hurt ordinary Argentines the most. In the past week the Argentina stock market has lost about a third of its value and the peso has dropped by about 22% to 59 pesos to the dollar. Argentina is unique in the way it has swung back and forth for four decades.between market friendly administrations that did well initially and then failed dismally, and socialist Peronist party administrations with the same pattern. High inflation and dropping currency reserves were typical in downturns.  Brazil has suffered from crumbling state finances and collapse in essential services such as sanitation and health. Showing a deterioration of finances across Latin America. ...

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The title should be- "Eos Electric Battery Plant Pittsburgh region reviving old Westinghouse Plant Turtle Creek." The old Westinghouse Plant closed leading to deindustrialization. $386 million from the Inflation Reduction Act of president Biden is used to reindustrialize around zinc-halide Electric batteries that are produced by Eos with federal government support at this location, once a old Westinghouse plant that was closed. This report in Politico shows the investments in clean energy in the Pittsburgh region. Its not about helping Harris it is about reindustrialization of America, and competing with Chinese made electric batteries with newer technologies using Made in the USA.

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U.S. gasoline prices were below $2.06, adjusted for inflation, during 1986-2003, dropping to a low of $1.51 in 1998. U.S. gasoline prices at the pump dropped below $2.00 in Jan. 2015. Buyer behaviour responded quickly to the change for automobiles, with sport utility (SUV) sales rising to 34% market share in the U.S. in mid-Nov. 2014, according to Edmunds.com.

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Wages have gone up less in Europe than in the US. In the last 3 months of 2021 wages were up 1.2 % and inflation was up 4.7% for a fall in real wages of 3.1%, which has accelerated since then with the war in Ukraine and shortages of energy and food supplies. A YouGov poll shows that 15% of Germans cannot afford basic necessities and 53% are concerned about rising prices. Because basic things like food and energy where prices have gone up the most also take up large portions of the budget for lower income households. In Germany some unions are giving one off payments for energy bills and other costs to workers till negotiations lead to a settlement on increasing wages. The situation is similar in Greece, Italy and France. In Greece the government has given $3 billion for subsidies on gas and electric bills. Elections are now focusing on cost of living as in France where the second and third place winners in the first round Le Pen and Melenchon together took about half of the vote. ...

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Local government debt is estimated to be 27% of GDP using estimates by Dragonomics and the China's National Audit Office. Prof. Shih of Northwestern University, an expert on this subject, estimates this to be $2.6 trillion or 42% of GDP. The total government debt is at 82% of GDP using the 27% estimate for local government debt. Using the higher 42% figure for local government debt of Chinese banks gives total government debt of 97% of GDP. Considering the nature of China's financial system in which state run banks and state run enterprises are a dominant feature, local government debt is likely to become the responsbility of China's central government. This also affects China's efforts to tackle inflation because higher interest rates would increase the cost of servicing this debt. As a result the government is unlikely to meet its inflation target of 4% in 2011. Large foreign exchange reserves of $3 trillion, the low interest rates, and high growth rates are expected to help China cope with this looming debt problem. Another round of capital injection to recapitalize banks is expected in 2012-2013 with the transition to a new leadership in China....

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Electric vehicles (EV's) get a tax credit under the Biden Climate Bill also called the Inflation Reduction Act of 2022. To qualify for the tax credit of upto $7500 buyers of EV's have to meet income and other requirements. Only cars with final assembly in the US qualify for the tax credit which should help boost American EV manufacturing capabilities and technology. This removes the problem of automobile job losses for factories shipped overseas.  EV's must not be priced above $25,000 for 2 year used cars, and $55,000 for new cars. SUV's can go upto $80,000. Income limits (as AGI) are $300,000 for joint filers, 150,000 for single filers for new cars. For old cars it is $150,000 for joint filers and $75,000 for single filers.

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With crushing one million percent inflation, workers at state enterprises are now meeting Mr. Guiado as he works to setup a new government that can tackle the economic problems facing the country. 

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Kenneth Rogoff, Harvard University economist, author of the well researched book on the 2008 financial crisis, "This Time Is Different," gives his thoughts on the economic prospects for the U.S under the new Trump administration. He says 4% GDP growth and 3% inflation is possible temporarily for a while with stimulus policies, less regulation, and increased private investment. After 8 years of not investing in much needed infrastructure because of concerns about the deficit, the timing is right for such investments, especially as the economic effects of the crisis of 2008 gradually fade.  This is about taking advantage of ultra low interest rates to invest in infrastructure. He says it helps that Trump policies are pro-business. He sees drawbacks as the stimulus program adds a 25% increase with extra debt, adding $5 trillion over 10 years, but adds that for many years Nobel prize winning economist Krugman and others have said that there is good reason to increase borrowing to invest, and this is now being tried. Inflation remains an uncertainty- if there are large quantities of underutilized and unemployed resources it would raise prices less than its effect to increase output. The reverse would apply if the U.S. economy is closer to full capacity. One factor that would help- increasing confidence for business and increasing investment. Against this what he calls optimistic view or spin, is the idea of mistakes under a Trump administration, errors made and a degree of incompetence which he says is a real possibility. Overall his view is that some risks are appropriate now, and from his deep study of financial crises sees the slow growth of the last 8 years a result of a financial crisis that now begins to fade, creating the possibility of higher growth under prudent policies.  ...

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Mexico's unemployment rate fell to 3.3% in June 2017, the lowest level since 2006, as the outlook for the Mexican economy improves. The problem for Mexico is that most of the new jobs created have low wages and wages have not kept up with inflation. Inflation is at 6.3%. Low labor skills means many people take jobs at low wages.

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Lulu Garcia-Navarro interviews Homeland Security head Alejandro Mayorkas and asks him direct questions about the border with Mexico, published Feb 2, 2024 in NYT. Why the surge in migrants asks Navarro. Mayorkas is himself a Cuban born immigrant. Republicans in the House are impeaching Mayorkas. Navarro asks can you clearly say what has gotten us to this place and what went wrong? Clearly something had happened in Latin America. Central America drove migrants north after conflicts in Salvador, in Nicaragua and drought affecting Guatemala's agriculture for over 2 decades under different administrations. Mayorkas says in response to the question that the world is experiencing the largest level of human displacement that it has seen since World War II. He says the entire hemisphere is experiencing the enormous displacement in Venezuela as its economy collapsed. During the nineteenth century after president Monroe put forward the Monroe Doctrine that created a uniquely American sphere that asked European powers to stay away from the Americas north and south, any attempt by European powers was seen as an hostile act. It was American opposition to European colonialism. By the time of the Eisenhower and Kennedy administrations this policy was not followed with the intervention of the Soviet Union in Cuba leading to a a wave of refugees from Cuba in the sixties. In the last decade the situation in Venezuela has worsened to the point that 8 million people have left Venezuela for neighboring nations, 2 million to Colombia alone, destabilizing the southern hemisphere. Venezuelans many from the educated middle class form the bulk of the surge in migrants across the US border with Mexico in 2022 and 2023. The problems were actually exacerbated under the Republican administration as the Venezuelan inflation spiralled after 2016 skyrocketing into hyper inflation by 2018 leading to the flow of immigrants outward that reached 8 million. This kind of hyperinflation the worst in the history of Latin America need not have happened with better managing of the crisis at that time. Mayorkas says the problem is that America's system of asylum is broken and both parties need to fix it. This is proposed by Tillis-Graham and Lankford all Republicans in the US Senate with president Biden's support. When he joined the Department of Homeland Security in 2009 Mayorkas says, US Border Patrol chief told him the real problem was that from the moment a migrant claims asylum at the border under US law and the adjudication of that claim it takes several years. This is the root of the problem the law can be fixed with the will of enlightened persons in both parties by simply passing a new law. Immigrants from Latin America are just as likely to vote Republican as Democratic and this may be particularly true for Venezuela's middle class that left the country as the economy collapsed with policies that led to inflation not seen in this hemisphere.  The other alternative is for the US and both parties to agree to what would be today's version of the Monroe doctrine- then opposing European colonialism, now opposing the breakup from within of Democratic countries in Latin America leading to waves of migration north of the border and causing upheavals all over the western hemisphere. Much less a policy of such resolution both parties have failed to fix basic policies of asylum and parole that today are being addressed by legislation being put together by Senator Lankford of Oklahoma, Lindsay Graham of South Carolina, Senator Tillis of North Carolina, three core states that are Republican since the Civil War, with the help of the White House and Senator Schumer. Yet in the House of Representatives Speaker Mike Johnson calls it dead on arrival simply refusing to break the status quo. ...

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Marina Corina Machado shown with her son and daughter in Caracas on Sunday. The Venezuelan leader wins a primary that was held throughout the country with the help of civilians groups. About 2.3 million Venezuelans turned out to vote in a country of 28 million people where many have emigrated overseas or are refugees in neighboring countries with increasing scarcities, high inflation and difficult economic conditions which could have been prevented. The UN reports 7 million refugees or migrated or about 25% of the population.

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Greg Ip of the WSJ looks at the impact on the economy worldwide from the effects of variants of Covid-19 in 2022. He cites IMF estimates that global output will be 3% lower in 2022 than it had projected in 2019, with Western Europe and Latin America taking larger hits. US growth is distorted and disrupted with the effects of absence of workers from illness (5 million American workers not working in December 2021 because they were sick, or caring for someone sick or afraid of spreading it), supply shocks from supply chains, 7% inflation. The boost to productivity from digitization conceals the impact of an overworked and fatigue prone remote working workforce, says Greg Ip.

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Pedro Sanchez is seen as pulling off a surprise in the recent Spanish snap election by increasing his Socialist workers party votes to 31.5% soon after losses in local elections. The Guardian looks at Pedro Sanchez and his career in leading the Socialist Workers Party since 2014. He is prime minister since 2018 and formed a coalition with Podemos which resulted in policies that gave Spaniards a welcome respite from inflation and the cost of living which is down to 1.9% in Spain. Spaniards were provided with monetary support and free public transportation during the pandemic years lessening the effects of that period and the cost of living crisis in Europe.

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As the ECB reduces its monthly purchases under its QE program to 60 billion euros from 80 billion euros starting in April 2017, the initial market reaction was that quantitative easing was going out. This says Barley is not the case, and markets are overreacting. The ECB is now ready to buy bonds yielding less than the deposit rate. The ECB promised to extend purchases to Dec. 2017 or further. Look deeper says Barley and ECB forecasts headline inflation at 1.7% in 2019, less than 2% target. So continued QE made sense but at a lower pace. In the end it is the flow that matters not the stock of purchases, says Barley.

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With inflation cooling to 3.3% in May report the US Fed sees only one rate cut for 2024. The Labor Department report on inflation consumer price index showed it was essentially flat from last month at 3.3% over the month prior year.