The USA increased oil production by more than 1 million barrels@ day in the last 12 months. Further the USA is on track to increase oil production by 1 million barrels@ day for each of the next two years.
Increased oil production plus low natural gas prices plus increased hydrocarbon related investments have resulted in real GDP growth of about 2% in the last three years.
That in turn has increased revenues to government coffers to the tune of about 100 billion annually.
95% of the FED’s QE’s have remained on the books the remainder has gone into the stock markets to make the rich richer and increase federal revenues by 100 billion plus annually for the last couple of years.
Inflation remains low because the velocity of money M2V continues to fall sharply.(this is a broad measure of borrowing and reinvestment. The big run up in the 90’s was related to the .com boom and stock issuance.)
http://col.stb.s-msn.com/i/47/C222433E7510FFF130CE2B98405E79.JPG
even while M2 continues to rise. (which is the total stock of money—ie fed printing.)http://static.cdn-seekingalpha.com/uploads/2012/7/31/saupload_FRED_graph_M2.png
All that means is that corporations have about 2 trillion dollars in bank accounts that they’re not investing because of the hopeless confusion caused by obamacare and dodd frank.
The exception is the oil patch where investment in the USA is taking on world changing proportions and under girding the US economy.
Whenever obamacare and dodd frank and the Sarbanes–Oxley Act of 2002 are repealed—inflation will heat up greatly. However, the fed will have numerous tools on hand to fight inflation.
Add suspension of Davis-Bacon until budget is balanced as well.
