QE2 was the $600 billion sequel to the first big run that the Fed had taken at jolting the economy back to life. When added to QE1, $2.3 trillion was pumped into the economy; a completely unprecedented effort.
Inflation and deflation are monetary phenomena. As far as inflation goes, these price movements are noise. However, for those who think price is what matters, food prices are headed down.
It takes a rare confluence of circumstances to produce low growth and high inflation. But the Fed did it! That confluence is not an every day occurrence. Or even every business cycle occurrence. The Fed has to work really hard to get that kind of mojo going.
Despite surging troops into the landlocked, south-central Asian country, ala the Iraqi surge of 2007, we’ve seen no drop in violence and no sign that the responsible civilian government there will govern responsibly.
There may be some in the U.S. military who believe that the United States might prevail in Afghanistan, but they are few in number. The champion of this view, Gen. David Petraeus, has been relieved of his command of forces in Afghanistan and promoted (or kicked upstairs) to become director of the CIA.
Watching oil recently decline from $114/barrel to $90/barrel (down 21%), is a positive. Lower wages, lower revenue, oil costs (first rising then falling), all add to the deflation case.
Before I outline some of your many options, let me add something important: The proverbial "big picture," as you put it, is not enough. To help you make really good investing decisions, you need to see the forest and the trees.
In a Bloomberg video David Rosenberg, chief economist at Gluskin Sheff & Associates, says there is a 99 precent chance of another recession by 2012. Rosenberg also talks about the outlook for the U.S. economy.
Recall that Treasury Secretary Paulson's failed policy was based on the construct that size matters. The EU's silly attempt of talking down problems in Greece was based on the same principle.
Unlike super-deflationist Robert Prechter, I expect gold to hold its value over the mid-term (another swoon is always possible) as the Fed fights massive deflationary forces of excess leverage, excess debt, boomer demographics, global wage arbitrage, cutbacks in state and local governments, and most importantly - consumer attitudes towards debt.
Obfuscating on how intelligence was developed and on the specifics of how an operation was carried out is an essential part of covert operations. The precise process must be distorted to confuse opponents regarding how things actually played out.
I discussed collapsing demand on May 6th. If you want to stick it to speculators, the best way to do it is to wait until sentiment is extreme, then hike margins right before bearish supply data. That is precisely what has happened.
Thanks to that three-eyed snake, the 111th Congress, the country has written checks that can’t be cashed by law. In order to remedy the problem, the GOP majority in the House will have to raise the debt ceiling.
There is no doubt that a 401(k) company match is one of the best deals out there. Never, ever walk away from it.
Mr. Bernanke had no defense of the sinking dollar, or the inflation it brings, or the drop in middle-class living standards it causes.
Have you noticed among the Obama-supporting elite a desperate agony upon realizing that he is not quite the messiah he made himself out to be and as which they willingly embraced him?
QE2 seems a poor match with the incoming Congress -- and with the heads of many of the world's other leading economic powers. Can the Fed persist in a policy that has stirred such scathing criticism?
The period between late 1929 and the beginning of the 1940s is, of course, known as the Great Depression. But in a real sense, it could be called the Great Depressions.
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