Better Buckle Up..Detour Ahead for the Economy…

  Let me begin by saying I’m not a Doom and Gloomer. However, I think we have to look at the present situation as it is, not as we wish it to be. Recently, many of the metrics which gauge the health of the economy are turning down and lets face it, with employment stubbornly high for the past three years, who though there was a recovery to begin with? Instead, what we got were, massaged figures from the government and incessant number of cheer leaders on CNBC, who constantly are putting lip Stick on a pig. As a matter of fact, they put so much lipstick on this pig you can’t tell its a pig anymore, its more like a huge red Faced Blob.

 

  Which now brings us to the point that all the Cheer leading is now being shown for the lie that it is when we see the Company’s like UPS who reported today. Going forward the news was not good. I use UPS as one of the Metrics to watch as this is a good indication of overall commerce. We also had the Richmond Fed report out today. It fell off a cliff. New Home sales missed by the most in 20 months. Again, if you just looked at one item, you could say, its no big deal, but when you put a number of them together, they start to paint a compelling picture of an economy going in to a recession ….again. As I stated earlier, It never felt like we emerged from the last one, hence, I think this dip is going to be much tougher, as we are starting from a lower point to begin with.

 

  As the economy slows, we are now hearing the constant chant for the government to step in and do something. What they really want, is for Mr. Bernanke to step in and Crank Up the Printing Press Again. We have seen this all before with QE-1, QE-2, operation Twist and Operation Twist -2. Yes…. these are a bunch of acronyms that will make your eyes glaze over, however, the real point of this is,….. we have had no recovery since 2008 and all of it has been stimulated by the printing of money which then has the adverse effect of increasing energy and food cost. There is a cause and affect and none of it good on the everyday consumer.

 

  Okay..so where do we go from here? Well…I don’t have a crystal ball nor does anyone else. However, based upon what the Fed has done in the past, look for some intervention in the market. The Fed and Mr. Bernanke know that QE- (Insert Number)Printing, is a Band Aid with limited results most of them bad. Expect more BS, and nothing substantial. The fact of the matter is, there is not much more the fed can do but print money and I expect at the end of the day, this is what they will do. I think I can say this with certainty, this will probably not be much fun…..

Rpalick

 

 

 

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