Commodity Trade Mantra

Posts Tagged ‘Investment Spending’

Finally The Fed Admits It Has No Clue on Inflation & Investment Spending

The most interesting comment by Fed Chair Janet Yellen was her admission that she and her prestigious voting members don’t have a clue why inflation and capital investment spending have not returned to loftier levels. Then how do they yet expect a significant 250 basis point credit tightening over the next couple of years in an economy muddling along just above “stall” speed?

Why ‘Stimulus’ Doesn’t Guarantee an Economic Recovery

The theory is that the additional spending will cause businesses to boost production to meet this demand. Producers will add jobs, triggering increases in consumer spending that will ripple through the economy and fuel a stronger overall recovery. Unfortunately, such government pump-priming hasn’t worked in the past & there’s no reason to believe it will work now.

The End of the Bubble Finance Era

During the expansion phase of central bank enabled bubble finance, optimism reigns and bulls and speculators insist that “this time is different.” Yet the laws of sound finance and market economics never change. It often just takes an extended time for all the excesses to work their way through the system and finally reach the blow-off stage.

Four Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End

The remarkable run up of asset prices in the last few years is beginning to run out of steam. Once interest rates begin to rise — and rise they must, whether as a result of Fed policy or not — the end of the asset price inflation will be at hand. The result will be another financial crisis and accompanying recession.

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