UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Sept. 22 @ 2:00 pm ET - FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Fri. Oct. 1 @ 8:30 am ET - Core PCE Price Index m/m Data
* Fri. Oct. 8 @ 8:30 am ET - Employment Data
* Wed. Oct. 13 @ 8:30 am ET - CPI m/m & Core CPI m/m Data
* Wed. Oct. 13 @ 2:00 pm ET - FOMC Meeting Minutes
* Thurs. Oct. 14 @ 8:30 am ET - PPI m/m & Core PPI m/m Data
* Fri. Oct. 15 @ 8:30 am ET - Retail Sales & Core Retail Sales Data
* Fri. Oct. 15 @ 10:00 am ET - Prelim. UoM Consumer Sentiment
* Fri. Oct. 15 @ 10:00 am ET - Prelim. UoM Inflation Expectations
* Wed. Oct. 20 @ 2:00 pm ET - Beige Book Report
*** CLICK HERE for link to Economic Calendars for all upcoming events.
Tuesday, July 19, 2011
Rules and Red Tape
It seems that with the growth of any entity comes the establishment and growth of rules, as well. This phenomenon certainly applies to countries and their protectionist rules and red tape that have been implemented over the years in relation to trade between countries. As economic conditions falter and growth slows in countries, some rules get re-written and other new rules get added. This, of course, causes delays in the clearance of products across borders and costs money to the affected companies. Since these costs affect a company's bottom line, they end up being passed on to consumers.
At some point, consumers become vigilant in their budget and spending priorities. Today, the retail sales report showed a slowdown in year-on-year sales from 5.4% to 3.8%. Perhaps the growing costs of cross-border red tape is reflected in and partly responsible for the slowdown in retail spending. This would, of course, add pressure to the woes of the slowing economic growth, higher unemployment, as well as higher inflation currently surfacing in the United States. As a result, it appears as though a reduction in consumer spending would not necessarily equate with a reduction in the price of goods (or services) unless cross-border rules/restrictions and red tape are sufficiently relaxed.
It remains to be seen as to whether or not such a measure would actually materialize at some point, or whether taxes and interest rates will be raised to cover the shortfall on GDP revenues. Personally, I don't see this happening...only higher costs and higher taxes...so I doubt whether my theory would ever be tested.