Long-term Realities Trump Volatility


Will the U.S. government get its budget deficit under control? A great deal depends upon what the stock market does — a market that may be entering a “boar market” phase where unpredictability is the tusked creature’s game. Stock market action over the last six weeks has been predictably bullish because of the consistent investment activity of trend following systems following the March technical reversal.

Market Rally Will Boost Economy Until Debt Crisis Arrives


A massive amount of quantitative easing (money supply inflation) is underway in the U.S. and around the world. The Bank of England, for example, has committed 75 billion pounds ($111 billion U.S.) to purchase government bonds and corporate paper.

Asset Inflation as Economic Stimulus: The Fed Strategy


All right, not everything in today’s Farrell commentary is erudite or even proportional. Nevertheless, he does make some valuable points. It is apparent that America is setting up various disgruntled interests in the world to make war with us. The U.S. decision to monetize debts in the face of a deepening recession is problematic. Quantitative easing (as it is called) will expose our international friends, competitors and enemies to economic complications as our U.S.

Low Interest Rates Should Favor Meritorious Money Use


The globally coordinated interest rate cut today shows the desperation of central bankers in trying to calm market psychology. The rhetoric about inflationary prospects moderating is delusional. While commodity prices are coming down in the short term they will likely reverse in the mid-term, as fundamentals point higher. Furthermore, government bailouts and backstops will lead to higher inflation as will entitlement programs and the alleged need for large military expenditures.

How Much Inflation Is There, Really?

Why is U.S. monetary policy continually burdened by economic fallacies? Supposedly, ‘real inflation’, is not a threat as long as wage inflation does not create an inflationary spiral (feedback loop). Nonsense. Irwin Kellner, Marketwatch Chief Economist, correctly argues that it is later than most people think because U.S. inflation has found drivers independent of U.S. wages.

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