Posted on 03/22/2013 6:34:04 AM PDT by Sir Napsalot
A lot of ink has been spilled over the past three years fretting about the fragility of the economy. But the reality is largely the opposite. The economy has proved to be very resilient. We have weathered external demand shocks, external financial crises, and even fiscal contraction, and all the while economic activity continued to grind higher. Looking back, it seems that the biggest risk the economy faced was the Fed's start/stop approach to quantitative easing. That problem appears solved with open-ended QE linked to economic guideposts.
At the risk of sounding overly optimistic, I am going to go out on a limb: The recovery is here to stay. Not "stay" as in "permanent." I am not predicting the end of the business cycle. But "stay" until some point after the Federal Reserve begins to raise interest rates, which I don't expect until 2015. This doesn't mean you need to be happy about the pace of growth. But it does mean that a US recession in the next three years should be pretty far down on your list of concerns.
Consider a handful of recent data. Last year's slowdown in manufacturing activity has proved temporary:
Remember, this was the data that ECRI claimed was a smoking gun in their hypothesis that the US economy slipped into recession in the middle of last year. Retail sales continued to gain in February despite the end of the payroll tax break:
Sure, you might complain about weak consumer confidence, but I think it best to pay more attention to what household do.
(Please read more at link)
(Excerpt) Read more at economistsview.typepad.com ...
Also read the response from Edward Lambert at link.
"Recession is when your neighbor loses his job, depression is when you lose your job, and recovery is when Carter loses his." - Ronald Reagan.
"Recession is when your neighbor loses his job, depression is when you lose your job, and recovery is when Obama loses his." - Me.
I thought all the charts were predicting the opposite. Anyone’s thoughts on this?
Just so long as we continue with QE-infinity, we will be fine.
Just so long as we pump $85B of fake money into the system every month, we will be fine.
If the day ever comes when we stop propping up the edifice, then the "recovery" will end.
Kind of stating the obvious, eh?
Everything I’ve read says the economy is dead, moribund. The U6 data gets worse and worse; screw the U3 data.
The stock market is another balloon beginning to over-expand/over-value and will burst again. Almost everywhere I drive, there are more and more “closed - out of business” signs on stores and businesses; “for lease”, “for sale”, “for rent”.
I don’t see anything new opening-up. This article’s blowing air up the Nation’s skirts. I don’t believe it for a minute. JMO.
Charts like this can be found all over describing conditions during the Great Depression. Prosperity was just around the corner and New Deal supporters had the facts and charts to prove it!
... just as “real” as an aquarium sitting in your family room is a “real” tropical lake.
In 2008, federal deficit spending (excluding interest and other borrowing, just budgeted deficit spending) was under 4%. Today, it is 9% of the gross domestic product of the US. Does the GDP grow by 9% a year? No? Has it even grown by 5% a year?
Without that extra deficit spending, the US economy would have retracted year after year since Obama took office. And any economics professor who excludes deficit spending from the calculations of a ‘recovery’ is purposefully lying, covering up facts to prop up their claims.
It’s about as real as the president. A recovery manufactured through the printing of money is no recovery at all. It’s a temporary hold-over, that leaves you in a worse state afterwards. Just ask Zimbabwe.
That is probably more disheartening to those who want to destory America than it is to those of us who love it.
Also the financial crisis in Asia Duy used in this article, “The Fed eased into the crisis, mitigating its impact”, all that margin had been used up.
We had Schumer’s and Pelosi’s daily decry Bush's ‘Jobless Recovery’ to propel Dems control into Congress, except now the ‘recovery numbers’ under Obama were far worse than Bush's 8 years.
And the economics professor wants public to turn “Sunny & Happy Face” that “(quote) a US recession in the next three years should be pretty far down on your list of concerns (unquote)”.
The take home lesson from reading this article is that 'Don't trust you facts and gut feelings. Nothing to worry about, move along."
Charts like this can be found all over describing conditions during the Great Depression. Prosperity was just around the corner and New Deal supporters had the facts and charts to prove it!
Yep. I have noticed the marixist game plan now is to take any tiny shred of good economic news and pump it up into a big deal. Meanwhile the economy just gets more and more distorted. This won’t end well.
The Ministry of Propaganda has spoken.
Those look just like a guns and ammo boom!
When the economy DOESN'T need $85 billion a month to prop it up, then we might talk about a recovery. Just imagine if QE stopped today. What would be the result? Why would the economy collapse if we are on solid footing now? Why must we retain zero to low interest rates forever? What will happen when interest rates get to 4%?
If any of these questions get you to reality, then maybe you will see how absurd it is to say we are recovering.
A few more,.....How many people were working in 2008? How many now? Why did the last unemployment rate lower to 7.7%? Were part of the new employees due to ObamaCare causing people to work less than 30 hours a week? Does a rising stock market mean the economy is getting better, or that business is making more doing less? Can you claim recovery with 43 million on food stamps?
The data has shown that a recovery has been truly ongoing since early 2012. Most people here don’t want to see it because they think Obama will get the credit. Facts are that the recovery, such that it is, is extremely weak by historical standards and that is because of Obama’s policies. They are restricting the growth we would otherwise be seeing. 1-2% GDP is a recovery but it’s a poor one. I’ve posted the industrial production chart a number of times along with the facts on housing. That we are at 917K housing starts (SAAR for February) when 2009-2011 were around 600K is a heck of an improvement. Home inventories are way down even compared to historical levels. We are not out of the woods and any sort of external shock could tip us over the edge. But it is undeniable if you look at the data that the economy is in recovery.
It’s only here until the government runs out of money. Then the whole house of cards comes down.
So is Santa Claus and the Easter Bunny.
Maybe, but it works. Kudos.
What you said is true on the surface. BUT.
Where did the 'money' come from? What was the % of 'Wealth' households saw declining?
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