Comments on: Why the Obama Stimulus Has Us on a Collision Course with Inflation

By: Al

Al — Sun, 09 Aug 2009 14:23:19 +0000

If the market wishes to see "main street" return as investors, then the "market" and "government" both need to be purged of the "Bad Apples". While everyone would like to be able to "retire", secure in the knowledge that prudent investments will surely provide the money needed to do so, one must know that the risks of the market are always present and one may lose a portion or all of investments made there. That is known as "risk". However there should not be a means for causing or allowing to happen any of the abnormal and illegal acts which have recently fleeced the millions of investors (worldwide) who were recently "taken" by the "movers and shakers" of Wall Street. While it is nearly impossible to clearly link the complicated interaction of our government officials and the improper workings of the "investment world" and correctly place blame where it rightfully belongs and summarily implement "punitive" action,..... well, if there is no examination into the "people" and their various motives for causing these "bubbles" and their eventual "bursting" and our imagination is allowed to fill in the blanks and we are satisfied that no one will ever be rightfully exposed and thusly punished, then how can we be expected, after being virtually "ruined" beyond hope [for financial recovery] to ever again partake in a world filled with shills in both investments and government? ----Now we are 8 months into "Phase Two" of the ruination of Capitalism and the Nation that has relatively well implemented it, by an "out of control goverment" and it appears that the "people" who object to it are willing to "wait" for the opportunity to "vote them out of office". Given what has happened in 8 months, 40 more months will be waaaaaay too late. Confidence,----anyone?

By: David A

David A — Sun, 09 Aug 2009 13:59:40 +0000

I've made plenty of money in the rising market. So I'd like to think that the rescession is just about over. But I think that talk is very early. There is still a lot of adjustment left to experience in real estate values. And there seem to be an awful lot of potential foreclosures hanging out there weighing down the economy.

But the real problem is that the decades long acceleration of consumer debt that was supporting the economy appears to be over. Greenspan, et al succeeded in holding down inflation alright. But they also held down consumer incomes. If we are going to recover into the brilliant future we'd all like, something has to be done about consumer's incomes. You cannot expect consumers to fuel a wonderful recovery out of thin air.

I certainly hope that the era of deficit financing consumption is over. And with banks still realizing the losses from this party, it seems very unlikely that they are going to be willing or able to flood the consumer market with easy credit any time soon. (Although the repetition of past error in the pursuit of profit is certainly possible.)

With consumer income stagnant I just don't see where the cash for a new boom is going to come from.

I don't want inflation either. But maybe enough inflation to get to full employment is the answer. If we could get back to the 3% unemployment rate of the early 50s, market pressures would increase consumer's incomes enough to get us there.

I don't know the answer. But it has to involve getting income into the hands of consumers. Debt has taken us about as far as it can.

We have to give up this insane idea that you can systematically starve consumers incomes and expect the consumer economy to thrive on debt.

By: Dr. Sebastian Ofumbia Uremadu, Associate Professor in Banking & Finance, MOUAU, NIGERIA

Tue, 04 Aug 2009 17:59:47 +0000

Even though inflation is always anywhere a monetary phenomenon, the US economy has been able to contain its inflartion rating since the present recession(2007-date) simply because, it has always managed its monetary policy very well. This is unlike in Nigeria where inflation rate has been in two digit figure and the spread between lending and borrowing rates has been very wide. The Americans value mass production to reap from economies of scale, hence it has been able to to control its inflationary trend to a digit figure-in most cases, between 1%-1.5%. In Nigeria, despiteefforts to inject liquidity into the financial system, it has been a different story, inflation always rises to a two digit figure. The American central bankers nd western economic managers indeed have knack for controlling inflation and should be commended. In short, what you call inflation i US IS NO INFLATION IN Nigeria. Thank you. Dr SO Uremadu is Nigeria's financial economcs' seer.

By: Gary

Gary — Mon, 03 Aug 2009 14:53:04 +0000

I am amazed that you continue to post the sales of homes as a positive thing. The "11%" increase does not honestly reflect the overall market with respect to the rate of foreclosures in the same period. How about being honest and telling your readers about the 19+million empty homes across the country. Or how about telling your readers that the 11 % is less than the foreclosures in the State of California alone. Come on guys, you do a great job so quit playing to the administration by whitewashing the numbers. It's worse than you are reporting and that makes you as much of the problem instead of the solution.

By: Geo. Therasse

Geo. Therasse — Mon, 03 Aug 2009 14:44:18 +0000

I believe when the country get more news on the health care debockle there will be an uprising lake never seen before. The senators feel like they are far superior to the voters. They are also the most arrogant bunch of creeps that we should be saddled with the same health insurance as the Illegals while they get their coverage at our expense. " love my country but I fear my government" This should be included in our National Anthem.