Pimco often gets out of US treasury because their fund chases the highest yield not because they are pessimistic on the U.S.
And here you see the alleged harbinger of doom actually praising the Federal Reserve's quantitative easing program.
horse crap
It’s simply inflation. It makes things look better for a short time before the real effects kick in.
117,000 of the 216,000 workers gains were from the Birth and Death Model.
The BLS projects a gain of ~100,000 per month and we import 125,000 new legal workers per month. That’s 225,000 net new jober per month to tread water.
The short-term easy way out for bond investors is for the U.S. Taxpayer to suck it up and keep paying taxes and the Treasury keep rolling it’s bonds over.
I don’t think the “powers that be” in investing are admitting to themselves just what the U.S. losing first place means to the portfolios they manage and their own portfolios.
And GE is all bubbly over MaObama’s “Green” Renewable Energy plan because they are making Billions on it and not paying any taxes.
Pimco is like JP Morgan, they are in bed with the administration and are getting rich and powerful on the backs of average hard working people. They are also getting massive kickbacks from their covert involvement in the Bond Market. Like the Federal Reserve, they are the epitome of “Smoke and Mirrors”.
Rock and a hard place.
Retail price inflation cannot gain a foothold in the broader economy with stagnant to falling incomes and massive unemployment. We’ve seen it in the necessities, those basics that people literally must buy. Nowhere else for any length of time.
As for these other nonessential items? Those manufacturers, importers and distributors who have felt compelled to give in to upward pricing pressure in nonessentials have experienced a loss of sales. There is no support because there is no market for a given discretionary purchase at a higher price, due to the aforementioned income and employment situation.
An improved employment picture will make retail price inflation more of a possibility across the broader economy. Should this occur, it will kill the nascent recovery that is being fuelled by quantitative easing, sending us right back to square one.
We’re looking at a “lost” decade or two a la Japan, at best.
“Employment Gains Show QE2 Is Working”
Working to do what? Destroy the country? I agree then.
“Employment Gains Show QE2 Is Working”
or ...
“Just keep dancin there medicine man - it’s bound to rain eventually.”
QE2 is working?
Well, that’s relative to how short your perspective is.
Juicing up the economy for the moment? Yes. Enough to start getting some positive private sector employment started? Yes. Enough to grease the skids on Wall Street with growing (actual or inflated?) profits? Yes.
And, enough to build some big inflationary pressures into the economy? Yes. Big enough that they are already showing - big time - in basic food stuffs and basic consumables, before QE2 even ends? Yes. Big enough that the consumer “basket” of goods is rising rapidly while wages are flat? Yes. Which is going to very soon erupt in wage pressures? Yes. Which is going to add to domestic production costs? Yes. Which is going to slow employment growth again? Yes. Which will take some of the grease out of Wall Street? Yes.
So, it’s really a matter of perspective - short term or long range.
The only cure for an inflated currency bubble is to start deflating the bubble and wait until you’re done. Blowing up another cheap money-led bubble is not a cure but a curse that will make the final deflation worse.
Feel the economy at about the end of the first quarter, next year, and see what it’s like then.