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On January 26, 1841, two years into the First Opium War between China’s Qing Dynasty and the British Empire, Commodore Sir Gordon Bremer hoisted the British flag above Possession Point in Hong Kong. At the time the island’s population numbered less than 10,000. Most were illiterate fishermen. Hong Kong was also devoid of any meaningful natural resources except for well-placed geography. So when the war ended in 1842 and British diplomats formally annexed Hong Kong into their empire, they turned it into a free port almost immediately. This means that no taxes were charged on goods traded in Hong Kong—an...

The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution.

Central banks cannot haul economies out of stagnation on their own, the OECD has warned. Catherine Mann, chief economist at the Paris-based think-tank, said countries were now “overloaded on monetary policy” as she described the use of negative interest rates as “a reaction of central banks trying to meet the objective of raising inflation and fostering growth alone”. Ms Mann said banks faced being “squeezed” by the unintended consequences of sub-zero rates in an environment where demand remained subdued. The OECD has repeatedly warned that fiscal policy and structural reforms are needed to ensure recoveries are self-sustaining. “In the economies...

Less than a decade ago, the world economy sank into the Great Recession: the deepest and most widespread downturn since the Great Depression of the 1920s and '30s. Since the stock market crashed in 2008, recovery has been long and slow, marked by persistent bumps in the road along the way. Nonetheless, an economic recovery has, indeed, taken place. The S&P 500 index rose more than 92% over the past five years until market volatility kicked in during the second half of 2015. So far in 2016, the S&P 500 is down almost 9% since the start of the year....

ECONOMIC alarm bells are ringing: Financial markets have wilted. Forecasters have been slicing their projections for future growth. And some leading wise men — including the megabillionaire George Soros — are predicting a return to disastrous 2008 conditions. That’s almost certainly an overly pessimistic view. But without a doubt, the leading global economies are in a major slowdown. Not evident is whether another recession looms. While current data suggests... Governments alone are not to blame... For a start, global competition and weak productivity growth have held down wages in developed countries. That has depressed consumer spending, as have increased saving...

The world's credit boom is beginning to show dangerous signs of unraveling, ushering in a period of fresh turmoil for the over-indebted global economy, the Bank of International Settlements has warned. The globe's top financial watchdog called time on the world's debt binge, noting that debt issuance and cross border flows in emerging economies slowed for the first time since the aftermath of the global credit crunch at the end of last year. With financial markets thrown into fresh paroxysms in 2016, oscillating between extremes of "hope and fear", the over-leveraged world was finally approaching a day of reckoning, said...

William White, chairman of the Economic and Development Review Committee at the OECD and former chief economist at the Bank for International Settlements (BIS), says the risks posed by global debt levels are greater today than they were in 2007 and that central banking monetary policy has lost its effectiveness. He also explains the crucial differences between modern macroeconomic modeling and complexity theory (or viewing the economy as a complex adaptive system) and the key lessons this has for policymakers, both fiscal and monetary. Here's a portion of his recent interview with Financial Sense airing Friday on the Newshour page:...

Central Banks Have Signed Their Death Warrants During the past year U.S. consumption spending for health care rose by 5%. Spending at restaurants and bars were up by 9%, while spending for gasoline and other energy products was down by 22%. This was Mr. Market at work--millions of households reallocating their spending in response to relative price changes. It had nothing to do with a macroeconomic abstraction called "weak demand". Actually, the medical care component of the CPI rose 3.3% last year. Housing and shelter were up by 3.2%, while gasoline prices were down by 7.3%. It all added up...

If you think the quality of the economic debate around Brexit is poor, spare a thought for the hapless American voter, who is being subjected to one of the most bizarre displays of fantasy economics I’ve ever come across. Ted Cruz wants to return to the gold standard... Against this nonsense, Donald Trump... ...the damage deporting 11 million immigrants... ...protectionist tariffs. As for the Democrats, Bernie Sanders claim that his policies would lead to a 5.3pc growth rate is so obviously off the wall that... It’s all quite scary. The only consolation in this descent into economic madness is that...

Did you know that there are some U.S. states that have already officially fallen into recession? Economic activity all over the planet is in the process of slowing down, and there are some areas of the country that are really starting to feel the pain. In particular, any state that is heavily dependent on the energy industry is hurting right now. During the years immediately following the last recession, the energy industry was the primary engine for the growth of good paying jobs in America, but now that process is completely reversing. All over the U.S. energy companies are...

So the S&P 500 is out of correction for now and the coast is clear. NOT! This is exactly what we've been predicting would happen – after reaching new lows, stocks would have to bounce before they inevitably resume their longer-term trend, which is down. But stocks haven't been the only victims of late. Just a couple weeks ago the January nonfarm payroll report came in at 151,000 jobs. So much for the expected 190,000! And of the ones reported, they were mostly low-wage jobs. Pile that on top of the disappointing Christmas and retail sales in December. Not to...

Here's a story you'll be hearing about a lot this year. Chinese companies have been buying up foreign businesses -- including American ones -- at a record rate, and it's freaking out lawmakers. There is General Electric's sale of its appliance business to Qingdao-based Haier, Zoomlion's bid for the heavy-lifting-equipment maker Terex Corporation, and ChemChina's record-breaking deal for the Swiss seeds and pesticides group Syngenta, valued at $48 billion. Most recently, a unit of the Chinese conglomerate HNA Group on Wednesday said it would buy the technology distributor Ingram Micro for $6 billion. And the most contentious deal so far...

Fannie Mae, the state-sponsored U.S. mortgage backer, is at risk of needing a government bailout that could shake confidence in the housing finance market, senior officials have warned. Fannie Mae's chief executive and its regulator are sounding the alarm on a decline in the institution's capital cushion, which is on course to vanish in 2018, when it would have to ask the US Treasury for emergency funds. Their warnings highlight Washington's inaction on housing policy and its failure to reform the institution, which guarantees nearly $3 trillion of securities and enables 30-year fixed rate loans, following the last financial crisis....

The global economy seems trapped in a "death spiral" that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned.

The United States is facing economic disaster on a scale few nations have ever experienced. Most people are unaware of the easily observable signs of this crisis, where it came from and how to stop it. While we persist in our superpower mentality, we have quietly become a second-class country in many respects.

A measure of international trade often seen as a bellwether for the global economy has crashed to its lowest level ever, fueling fears we could be heading for another 2008-style crash. Back in November, the Baltic Dry Index dropped below 500 for the first time in recorded history, and it has kept falling ever since. On Wednesday morning it fell to a low of 369. To put that into perspective, the index was as high as 1,222 in August, and it has fallen 84% from a recent peak of 2,330 in late 2013. The Baltic Dry Index measures how much...

<p>As Wilbur Ross so eloquently noted, for Puerto Rico "it's the end of the beginning... and the beginning of the end," as he explained "Puerto Rico is the US version of Greece." However, as JPMorgan explains, for some states the pain is really just beginning as Municipal bond risk will only become more important over time, as assets of some severely underfunded plans are gradually depleted.</p>

U.S. orders for long-lasting goods such as heavy machinery or airplanes fell in September for the second month in a row, offering little evidence that manufacturers are ready to rebound after a prolonged bout of softness. Durable-goods orders fell a fell a seasonally adjusted 1.2% in September following an even sharper 3% decline in the prior month, the Commerce Department said Tuesday. Previously the government had said orders dropped 2.3% in August.

It’s an ill financial wind that blows no one some good. A very nice and very rich old lady once explained to me that, in her view, the golden age of the American economy happened in the first years of the Reagan administration. This puzzled me: The United States had dipped into recession in 1980, and Paul Volcker was standing on the economic brakes to wring the Carter-era inflation out of the economy, jacking the federal-funds target rate up to damned near 20 percent. People were paying 18.5 percent on their mortgages. But, of course, usurious interest rates are pretty...

I’ve long-stated that the government of the United States is completely insolvent. And that is 100% true statement. The government’s own numbers show that official liabilities, including debt held by the public and federal retirement benefits, total $20.7 trillion. Yet the government’s assets, including the value of the entire federal highway system, the national parks, cash balances, etc. totals just over $3 trillion. In total, their ‘net worth’ is NEGATIVE $17.7 TRILLION… a level that completely dwarfs the housing crisis. If you include the government’s own estimates of the Social Security shortfall, this number declines to NEGATIVE $60 TRILLION. And...