A One-Word Answer
Can all the socioeconomic variables in all their complexities be accurately accounted for to engineer a viable macro-economic policy? No.

I would like suggest that due to its complexity and immeasurable quantitative data points, the science of economics has failed. (To be sure, the economic models that we have labored under have also failed us in the past. I am out of fingers and toes trying to enumerate the number of booms, panics, crashes and failed central banks since 1776.) 

A Picture Of Treasury Yields Is Worth One Word: DEFLATION

As the year 2007 rolled into 2008, the mainstream financial experts were certain of one thing (if you don't count death and taxes): Inflation would take the U.S. economy by storm and trigger an across-the-board flight out of the rate-sensitive bond market. The very opposite -- DEFLATION -- has occurred.

Deflation, Fiat Money, and Market Destruction
Yes, the Fed Chairman DID Say This in Public

Do Home Prices Look INFLATIONARY To You?
Core C.P.I. is at 2.3%, overall C.P.I. at 5.0%, and the Fed funds rate at 2% -- is THAT inflation?

EURUSD: U.S. Interest Rates Unchanged. Now What?
With the Fed's decision out of the way, what will determine the next move in the EURUSD?

Now that the Federal Reserve left U.S. interest rates unchanged and the U.S. dollar lost on the news, the question is: Was that all of the "pressure" the USD would see, or is there more to come? Here's a chart Elliott Wave International's Currency Specialty Service showed right before the Fed's announcement on June 25...

Is Gold REALLY a Safe Haven in Recessions?
With claims like these, we at EWI always do the same thing: We look at the data.

"Gold always goes up in recessions and depressions." Is it true? Should you own gold because you think the economy is tanking? Whenever we hear some claim like this, we always do the same thing: We look at the data. The results speak for themselves...

Walmart Capitulates -- The Rich Win
Attention Brutus, please observe aisle seven...

Stock markets closed lower today, Wednesday, October 3, 2007

Inflation to the Left of Me, Deflation to the Right -- And Stuck in the Middle Is YOU
Lend me your ear! Heh heh...

In 1974, Stealers Wheel recorded the memorable bubblegum song "Stuck in the Middle With You." In 1992, Quentin Tarentino used the song during the famous "ear scene" in his first feature film, "Reservoir Dogs." You might ask: "What's this got to do with monetary valuation?" Well, just lend me your ear for a moment…

Wild On The Edges
Where the action is

Edges are where the social and biological action is; they’re the first places shaped by change. On the edges of seacoasts, forests, riverbanks, and -- real-estate bubbles – gulls scream, chipmunks gambol, poison ivy grows, dreamers gamble, and predators wait. Edges are where most of the feeding happens. So what does this have to do with commodities?

Deflation is a Process, Not an Event
And doesn't move in a straight line...

People tend to associate predictions with events, not processes. Because our culture-at-large encourages brief attention spans, it's confusing to be carried along in a long, unfolding process. If it happens slowly, it is much easier to deny. That is, unless you have lost your job, or house, or both.