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 ...
Yeah... Someone’s cooking the numbers on that household balance sheet ‘cause is doesn’t match reality.
I agree. Not just the balance sheet, but the true value.
You are not listening, are you?
You can pile charts and numbers from Dept Labor, Commerce and whatever to show the recovery.
Where did the money come from? You can print fiat money like we are doing now, and make the claim of recovery.
Continue your thinking we are on a recovery then.
I always find these charts and arguments fascinating. Not even to say they are incorrect.
Allow me to pose a question(maybe unanswerable):
Can you have a good economy and high unemployment and record recipients of food stamps simultaneously?
The investors are down the shore.Was to look at an upgrade-extra bedroom on Saturday.It sold that morning cash.
And you obviously have no idea what to do from a monetary perspective in a deflationary cycle.
This is laughable. Things are stagnant at best. We have record numbers of umemployment, people on food stamps, and 8.5 million less people working than we did before Obama took office.
I've posted a thousand times here that the unwinding of the Fed's balance sheet when monetary velocity improves will be challenging and the timing will be critical. the fed has done the proper thing with QE given the deflationary spiral we have been in. When it flips though they have to unwind it properly.
I assume the zero percent growth last quarter has been sufficiently explained by the thousands of economic bloggers so I'm not going to rehash something so obvious.
BTW the GDP chart I posted is real not nominal. It’s chained to 2005 $.
I've just been told I have no “monetary perspective in a deflationary cycle”.
Yipeeee, the recovery henceforth is real.
And for the record, I wish there was a recovery. I like good economy too.
What Would Milton Friedman Say about Fed Policy Under Bernanke?
Similarly, were Friedman alive today, he would balk at the notion that the Fed is out of ammunition. He would remind us that in the early-to-mid-1930s, when the economic environment was far worse and short-term interest rates were near the zero bound, monetary policy easily generated a recovery. Therefore, the Fed could do likewise today.
Friedman would likely make the case today for more aggressive monetary action. It is time for “Helicopter Ben” to earn his nickname.
In order to generate phony economic growth and to “pay” our country’s debts in the most dishonest manner possible, the Federal Reserve is 100% committed to the destruction of the dollar. Anyone with wealth in the U.S. dollar should be concerned that economic leadership is firmly in the hands of irresponsible bureaucrats who are committed to an ivory tower version of reality that bears no resemblance to the world as it really is.
The reason I had the (!!!) is because the absolute cover Obama gets from the incurious media.
Nobody challenged those numbers, nobody asking embarrasing questions, etc. etc.
But you already know that.
Three items. One, don't assume anything. Makes an ass out of...Two, I can explain probably better the "zero" growth last quarter than most every blog you read. Three, you are, in my view attempting to be condescending. Not good when you have basically agreed with what I posted. Shows arrogance without intelligence.
So, give me your best analysis of a very subjective statement that I made: "...it's not looking too good." [see my last post]
Thanks for the clarification on the real GDP data.
5.56mm
Where is this market?
Bucks county Pa but Diane Sawyer did a special 2 days ago showing a shortage of houses.Some homes were selling above asking price.My daughter look at a house that went on the market today.She went at 5PM.It already has 2 bids on it.
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