Poor demand is exacerbating the risk that ultralow consumer prices will tilt into outright deflation, a policy conundrum for the European Central Bank. The bank’s president, Mario Draghi, and his colleagues on the governing council have already cut interest rates to rock bottom, and the only major tool left at their disposal would appear to be so-called quantitative easing, or bond-buying on a large scale.
That conundrum remains a problem for Mr. Obama and congressional Democrats, who are a minority in the House and will also be a minority in the Senate when the new Congress convenes next year. Soon, however, it will be the defining challenge for the Democratic nominee to succeed Mr. Obama, whether it is Hillary Rodham Clinton or someone else. Even if the economy keeps growing — as many economists expect — prosperity could continue to elude many Americans, given forces predating the Great Recession that are depressing wage growth and widening income inequality.
But Ms. Yellen and a majority of Fed policy makers, pointing to evidence that inflation remains well under the central bank’s 2 percent target, do not appear to be unduly alarmed and probably still prefer to leave interest rates as low as possible until the trend is better established.
Economists long argued that, just as buggy-makers gave way to car factories, technology would create as many jobs as it destroyed. Now many are not so sure.
Oil price fall threatens $1tn of projects (Scott T.)
Goldman has examined 400 oil and gasfields around the world, many of which are still awaiting a final investment decision. Its analysis, based on a $70 oil price, shows that fields representing 2.3m b/d of output by 2020 and awaiting a green light have now become uneconomic. That figure rises to 7.5m b/d of production by 2025. The analysis excludes US shale.
The Hidden Costs Of Cheap Oil (Evan K.)
If you live in a country that exports a lot of oil (not just Saudi Arabia, but Mexico, Canada and Norway, too), you will not. The declining price of oil is supposed to have a balanced ledger of winners and losers. But we may be on our way to finding out that in the long run we will have a much larger list of losers than winners. And, the list will lengthen if the price continues to fall, and especially if it stays down for a long time. (Low prices are not necessarily an indication of future abundance. Remember that oil reached $35 a barrel at the end of 2008 before returning to record average daily prices in 2011, 2012 and 2013).
The prospect of abandoning the pipeline is something its Canadian builders and their supporters in Congress say they won’t even entertain. Keystone is a decades-long investment that backers of the project say will not be changed by what they portray as a temporary glut in the oil market.
Budde had started his research while managing social impact pension funds for the New York-based TIAA-CREF, which now manages about $800 billion, primarily for academic institutions and hospitals. He and his wife — who met at Bowdoin College — moved to Maine about a year ago.
May, a Rockport native, previously worked at U.S. Bancorp Piper Jaffray as a managing director and research analyst. He now serves on the Maine Organic Farmers and Gardeners Association board of directors and the steering committee of the local food investment group, Slow Money Maine.
Gold & Silver
Provided daily by the Peak Prosperity Gold & Silver Group
Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."