News Story of the Day: Interest rates are climbing, and the Federal Reserve will likely raise rates two more times this year. This means, borrowing will become a lot more expensive, both for you and the government.
Just take a look at the bond market.
The yield on the 10-year U.S. Treasury note is trading around three percent. Bond yields typically move inversely to bond prices. Should demand for bonds drop, prices fall in response and yields advance. Unfortunately for bond issuers, they have to pay higher interest rates to encourage investors to purchase the bonds.
Considering the government is $22 trillion in the hole, how could the U.S. government encourage anyone to buy what they’re selling? Well, Washington think it can, which is why it is auctioning billions of dollars in two-, five-, and seven-year notes.
Chart of the Day: The mainstream media is in shambles right now: ratings are down, reputations are down, and the fake news is real. Is it any surprise, considering that just six companies own most of the media landscape? There needs to be more competition.
Illustration of the Day: With President Trump expected to impose more tariffs soon, here is a quick reminder:
Quote of the Day: This is probably the most shocking thing coming out of The New York Times in 2018: Walter Block being published in the newspaper! The same newspaper that said Block thought slavery wasn’t that bad.
The opinion piece concentrated on Trump’s tariffs. Here is an excerpt:
As an economist who shares President Trump’s belief that we should be cutting taxes and shrinking government, I might be expected to be enthralled by his policies. But that is not the sentiment I and many other libertarians feel when it comes to his decision to impose tariffs on steel, aluminum and a host of other products made overseas, particularly in China.
On Wednesday, Mr. Trump and the president of the European Commission, Jean-Claude Juncker, said they had reached an agreement to step back from a trade war and to discuss ways to lower tariffs and other trade barriers, and possibly increase European imports of American soybeans. But the outcome of those talks is far from certain, and trade tensions between the United States and China remain very high.
What is driving the president’s apparent eagerness to impose tariffs is a simple and wrongheaded idea that plays to a large part of his base: A trade war will spur job growth in America. He is trying to use tariffs to give a leg up to American industries against countries that manufacture the same products that we do — whether steel, aluminum or cars — but more efficiently. And who could be against that if it creates more jobs?
In reality, however, creating jobs alone does not make for a strong economy. What we really want is to increase production. And to achieve that, we need to allocate labor as efficiently as possible. One way to do that is to ensure that if other countries can make certain goods more efficiently than we can, we trade with them for these items, rather than manufacture them ourselves. The result is cheaper goods, which is to our advantage.
But tariffs do nothing to improve this efficient allocation of labor. They also do not increase or decrease employment. They just shift jobs around, and almost always in a manner that hurts the economy.
As an illustration, assume Mr. Trump is the governor of New York. He is devoted to making the Empire State “great again.” Right now, both New Yorkers and Iowans raise pigs — but Iowa produces far more than New York. So Governor Trump sets up a protective tariff against the importation of Iowa-raised pork. Will this make New York great again?
Tweet of the Day: Venezuela believes it has solved hyperinflation: erasing a couple of zeroes. Yeah, that will bring a lot of prosperity to the Latin American nation. Peter Schiff thinks so, too!
With the inflation problem solved by Venezuela President Nicolas Maduro, people there will soon be able to buy food and toilet paper again in no time and a socialist utopia will undoubtedly be realized. https://t.co/wAJUVmASv4
— Peter Schiff (@PeterSchiff) July 27, 2018
Video of the Day: If you thought social justice warriors were awful in the United States, then be sure to come to Canada to find some of the craziest SJWs in the world. Just take a look at this teacher who hassled a reporter for asking people about their thoughts on the Danforth shooting:
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