Comments on: The Three Factors Choking the U.S. Recovery http://moneymorning.com/2009/10/24/u-s-recovery-report/ Global Investment News Mon, 13 Feb 2012 18:41:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: starkeep http://moneymorning.com/2009/10/24/u-s-recovery-report/comment-page-1/#comment-8592 starkeep Thu, 10 Dec 2009 16:34:58 +0000 http://www.moneymorning.com/?p=9456#comment-8592 a lot of people say the dollar isnt worth much but when it comes to buying home forclosures i am shocked at what a a few dollars will buy. Housing is at a very low point now. a lot of people say the dollar isnt worth much but when it comes to buying home forclosures i am shocked at what a a few dollars will buy. Housing is at a very low point now.

]]> By: Robin http://moneymorning.com/2009/10/24/u-s-recovery-report/comment-page-1/#comment-8006 Robin Wed, 11 Nov 2009 05:21:50 +0000 http://www.moneymorning.com/?p=9456#comment-8006 hi. Has the author of this article went back to previous market crashes and recession/depression and studied how 1) Stock markets are leading indicators, not lagging indicators, and how 2) Unemployment gets better months after a stock market bottom? I find that the statement "erase of those gains" extremely controversial, especially when in the later part of the article, the author acknowledges the 100% increase in money supply. At 0% interest rate, does it not make sense for the banks to throw money into assets like the stock market? I find the total erase of gains and testing of March lows in 2009 a low probability event, which thinking about it, requires the institutional investors to give up all their gains. Personally, I believe a huge bubble is forming. A reversal of trend has already been confirmed since March 2009. I believe that the presence of incredibility of this New Bull rally as presented in this article is excatly the type of reasons to buy the stock market, as an example of one asset class which is forming a bubble. A falling US dollar, i would also argue, would provide the support and "fundamental" for the bubbles building up in stocks markets aronud the world, and also in commodities in general. :-) Robin Singapore hi. Has the author of this article went back to previous market crashes and recession/depression and studied how
1) Stock markets are leading indicators, not lagging indicators, and how
2) Unemployment gets better months after a stock market bottom?

I find that the statement "erase of those gains" extremely controversial, especially when in the later part of the article, the author acknowledges the 100% increase in money supply. At 0% interest rate, does it not make sense for the banks to throw money into assets like the stock market? I find the total erase of gains and testing of March lows in 2009 a low probability event, which thinking about it, requires the institutional investors to give up all their gains.

Personally, I believe a huge bubble is forming. A reversal of trend has already been confirmed since March 2009. I believe that the presence of incredibility of this New Bull rally as presented in this article is excatly the type of reasons to buy the stock market, as an example of one asset class which is forming a bubble.

A falling US dollar, i would also argue, would provide the support and "fundamental" for the bubbles building up in stocks markets aronud the world, and also in commodities in general.

:-)
Robin
Singapore

]]> By: JOE POWELL http://moneymorning.com/2009/10/24/u-s-recovery-report/comment-page-1/#comment-8007 JOE POWELL Tue, 10 Nov 2009 12:02:40 +0000 http://www.moneymorning.com/?p=9456#comment-8007 Could we have an UPDATE to this story? It is now November 10, and most of the statistics are out of date, because things are changing so fast, BUT only getting worse! Thanks. Could we have an UPDATE to this story? It is now November 10, and most of the statistics are out of date, because things are changing so fast, BUT only getting worse! Thanks.

]]> By: Dave http://moneymorning.com/2009/10/24/u-s-recovery-report/comment-page-1/#comment-8005 Dave Tue, 03 Nov 2009 13:04:06 +0000 http://www.moneymorning.com/?p=9456#comment-8005 Doesn't it make sense to turn over the ability to print money to the United States Government instead of the privately owned Federal Reserve? We are paying something like $38 Million dollars an hour in interest to a private company that is printing money out of nothing. I think if more people understood that the FED is a private company, we would be able to eliminate this very expensive middle man. Doesn't it make sense to turn over the ability to print money to the United States Government instead of the privately owned Federal Reserve? We are paying something like $38 Million dollars an hour in interest to a private company that is printing money out of nothing. I think if more people understood that the FED is a private company, we would be able to eliminate this very expensive middle man.

]]> By: flow5 http://moneymorning.com/2009/10/24/u-s-recovery-report/comment-page-1/#comment-8004 flow5 Sun, 25 Oct 2009 01:02:13 +0000 http://www.moneymorning.com/?p=9456#comment-8004 Inflation? More like stagflation, business stagnation (negative real-gdp), accompanied by inflation, e.g., increases in gasoline, groceries, etc. (especially considering the protracted decline in the exchange value of the U.S. dollar). The FED can control inflation, but that's all. It's a myth (in spite of its dual mandate), that the FED can achieve "full employment" (or even remotely influence job production). That's our legislator's mandate (via taxation, spending, entitlements, incentives, etc.). However, budget deficit financing has lost its validity, as a fiscal device, to rescue the economy from a depression, or even to prevent recessions. Furthermore, the higher interest rates will put a damper on the economy, which may be sufficient to significantly lower government revenue and add to the deficits. The rising yield curve and the abnormally low-level-yielding, short-term, riskless, government securities, suggests that the long-term trend of short-term rates will also be up. Further adding to our deficit financing woes, is now the requisite volume of foreign financing (which includes the threat of repatriation), now about c. 46 percent of total net debt (as well as the increasing burden of interest charges). Monetary flows (MVt), or the rate-of-change in our means-of-payment money, times its rate of turnover determines aggregate demand. Note that this product is not the same as that inflammatory figure presented by the author. Aggregate demand determines nominal gdp (which includes new, or real, investment, i.e., permanent job creation). This is not the same as short-term “shovel ready” projects. Nominal gdp is comprised of the rate-of-change in real-growth combined with the rate-of-change in inflation. Monetary lags for real growth & inflation are historically fixed in length. However the lag for nominal gdp varies widely. Where are we now? Real-growth has started to contract again (we are nowhere near rebounding from the 10/2008 peak). Only direct controls can cope with our problems. This Country will be forced to resort to a “command” economy to cope with the debt problems. GM, Chrysler, AIG, etc., are the tip of the iceberg). And the administration will be forced to resort to “capital account controls” because of the falling dollar. Inflation? More like stagflation, business stagnation (negative real-gdp), accompanied by inflation, e.g., increases in gasoline, groceries, etc. (especially considering the protracted decline in the exchange value of the U.S. dollar).
The FED can control inflation, but that's all. It's a myth (in spite of its dual mandate), that the FED can achieve "full employment" (or even remotely influence job production). That's our legislator's mandate (via taxation, spending, entitlements, incentives, etc.).
However, budget deficit financing has lost its validity, as a fiscal device, to rescue the economy from a depression, or even to prevent recessions. Furthermore, the higher interest rates will put a damper on the economy, which may be sufficient to significantly lower government revenue and add to the deficits.
The rising yield curve and the abnormally low-level-yielding, short-term, riskless, government securities, suggests that the long-term trend of short-term rates will also be up. Further adding to our deficit financing woes, is now the requisite volume of foreign financing (which includes the threat of repatriation), now about c. 46 percent of total net debt (as well as the increasing burden of interest charges).
Monetary flows (MVt), or the rate-of-change in our means-of-payment money, times its rate of turnover determines aggregate demand. Note that this product is not the same as that inflammatory figure presented by the author. Aggregate demand determines nominal gdp (which includes new, or real, investment, i.e., permanent job creation). This is not the same as short-term “shovel ready” projects.
Nominal gdp is comprised of the rate-of-change in real-growth combined with the rate-of-change in inflation. Monetary lags for real growth & inflation are historically fixed in length. However the lag for nominal gdp varies widely.
Where are we now? Real-growth has started to contract again (we are nowhere near rebounding from the 10/2008 peak).
Only direct controls can cope with our problems. This Country will be forced to resort to a “command” economy to cope with the debt problems. GM, Chrysler, AIG, etc., are the tip of the iceberg). And the administration will be forced to resort to “capital account controls” because of the falling dollar.

]]>